What will it take to lower the cost of insulin in the United States?


Reducing the cost of insulin – and other high-priced medications – in the United States will require a concerted effort involving multiple changes to the current convoluted drug pricing system, Mayo Clinic hematologist S. Vincent Rajkumar, MD, argues in a new commentary.

The High Cost of Insulin in the United States: An Urgent Call to Action was published in the January 2020 issue of the Mayo Clinic Proceedings by Dr. Rajkumar, professor of medicine at the Mayo Clinic, Rochester, Minn., who specializes in treating myeloma and, more recently, has become an expert in drug pricing.

He also presented the information in a YouTube video.

As has been widely reported and examined by Congress in the past few years, the cost of insulin in the United States has risen at a far higher rate than inflation. For example, the list price of a single vial of Humalog jumped from $21 in 1999 to $275 in 2019, a far higher price than anywhere else in the world.

Stories of one in four patients having to ration their insulin use because of cost, and of some dying, have fueled protests, leading to legislative efforts and to a few initiatives by some of the manufacturers to address the cost problem.

Collective advocacy

Much of the blame has been placed on the manufacturers for charging such high prices and on the pharmacy benefit managers (PBMs) – also known as “middlemen” – for incentivizing higher-priced products on formularies through rebates. Those are major factors, Dr. Rajkumar argues, but they are not the only ones.

“There is no one reason why this is happening, and no one solution. It’s very complicated. It’s multiple factors all playing together. The only way to tackle it is to really understand it 360,” he said in an interview.

This is true of drug prices overall in the United States, but insulin is a special case. The current analog formulations have not changed in more than 20 years, yet only in the past 5 years have a handful of biosimilar and generic versions started to appear from the same manufacturers as the branded products.

“Insulin is a window into what’s wrong with the pharma industry. ... It’s the best example of how the system is broken,” Dr. Rajkumar stressed.

Physicians can help ease the problem, he said, by becoming educated about drug prices, taking cost into account when prescribing, and routinely discussing prescription drug affordability with patients.

Resources such as www.goodrx.com and www.blinkhealth.com provide information about drug prices and pharmacies that offer drugs at the lowest prices.

“Doctors need to not be suspicious of biosimilars and generics,” he emphasized.

Physicians can also advocate for policies that will lower insulin prices, and their institutions can establish preferences for lower-cost biosimilars in formularies.

“Our individual and collective advocacy gives voice to the needs of our patients,” Dr. Rajkumar emphasized.

‘Everyone in the supply chain benefits’

In his commentary, Dr. Rajkumar lists six major reasons for the high cost of insulin:

1. People with type 1 diabetes are a “vulnerable population” who will die without insulin and are therefore willing to pay a high price to stay alive.

2. Just three manufacturers – Eli Lilly, Novo Nordisk, and Sanofi-Aventis – control nearly the entire insulin market in the United States, with no regulations to cap or control the prices they can charge.

3. The manufacturers continually file new patents for existing insulin products – 70 in the case of Lantus, for example – that provide additional years of monopoly protection from competition.

4. Although the Food and Drug Administration has been receptive to approving insulin biosimilars, it still requires manufacturers to go through a long and cumbersome process to obtain licensure, sometimes taking as long as 10 years.

5.PBMs, paid by insurance companies to negotiate prices with retail pharmacies and pharmaceutical companies (through rebates), stand to benefit from higher, not lower, list prices.

6. Pharmaceutical companies have vast lobbying power.

In regard to the fifth point, about PBMs, Dr. Rajkumar said, “It’s not just the PBMs – it’s the whole supply chain. It’s hard to put a finger on the source of the problem. There’s no transparency in any of the arrangements for you to know why only certain drugs are on a given formulary of an insurance company or PBM. But we do know that, in general, the whole supply chain benefits from the higher list price. Everyone.”

‘Authorized generic’ insulins

That is why Dr. Rajkumar is not convinced that Eli Lilly’s recent launch of half-priced “authorized generic” insulins – first the Lispro injection in March 2019, and then two combination pen products in January 2020 – or Novo Nordisk’s My$99Insulin program and “follow-on” authorized generic versions of Novolog and NovoLog Mix, launched Jan. 2, 2020, will have a huge impact.

“It’s common sense. If Apple made the same iPhone for two different prices, who would pay the full price? It gives you a window into asking what is wrong with the system that allows that? To pay for the higher-priced product, somebody is being paid,” he said.

Indeed, in December 2019, the offices of Sen. Elizabeth Warren (D-MA) and Sen. Richard Blumenthal (D-CT) issued a report from a survey of 400 pharmacies nationwide that found that 83% of the less expensive authorized generic Insulin Lispro was not in stock.

More than two-thirds of pharmacies reported they could not order the product.

“Eli Lilly has failed to take consequential steps – such as simply lowering the list price of Humalog, as it has in foreign markets – to provide lower-cost access to this important diabetes drug,” according to the senators’ report, which concludes by urging Eli Lilly to lower the list price of its insulin and calling for Congress to take steps to enact systemic change to reduce drug prices nationwide.

Asked for comment, Dani Barnhizer, Eli Lilly’s manager of global diabetes communications, said, “Like Senators Warren and Blumenthal, Lilly would like to see even broader use of Insulin Lispro injection because it’s a real solution that can lower copays for people living with diabetes.”

“But the Senators’ paper failed to identify the system challenges that have inhibited access to this lower list price product,” Ms. Barnhizer said. “Payers determine an individual’s premiums and copays, which are subsidized by rebates that pharmaceutical companies pay. And many payers prioritize these rebates to lower premiums instead of offering low copays for chronic medications such as insulin.

“It’s why only one in four people using Medicare Part D, and one in five with commercial plans, have coverage for Insulin Lispro injection. That will not change until payers prioritize providing consistent, affordable insulin copays,” she added.

However, Ms. Barnhizer also noted, “It is not unusual for pharmacies to not stock a medicine. Any pharmacy can place an order for Insulin Lispro injection, with delivery in 1-2 days. All major U.S. wholesalers are now distributing Insulin Lispro injection.”

She also said that people who earn 400% or less of the federal poverty level may be eligible for free insulin, and that Lilly can provide free insulin to anyone in emergency situations. (Novo Nordisk offers that as well.)

Asked why Lilly does not simply lower the price of all their insulins, Ms. Barnhizer responded: “Cutting the list prices would significantly disrupt access to branded insulins, which thousands of insured patients depend on. Launching lower-priced insulin options is a less disruptive approach to help reduce the amount people pay at the pharmacy for people who need the help.”

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