When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting’s co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. They wanted everyone who needed their medication to be able to afford it.
Today, Banting and colleagues would be spinning in their graves: Their drug, which many of the 30 million Americans with diabetes rely on, has become the poster child for pharmaceutical price gouging.
The cost of the four most popular types of insulin has tripled over the past decade, and the out-of-pocket prescription costs patients now face have doubled. By 2016, the average price of insulin rose to $450 per month — and costs continue to rise, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses.
Members of Congress have been pressuring drug companies and pharmacy benefit managers to bring insulin costs under control. And on Wednesday, one health care company showed that it’s attempting to respond to the problem.
The insurance behemoth Cigna, and its pharmacy benefit arm Express Scripts, announced a new program that’ll cap the 30-day cost of insulin at $25. That’s a 40 percent reduction from the $41.50-per-month fee people with Express Scripts benefits were paying in 2018.
The program is expected to launch later this year for insurance plans that work with Express Scripts benefits. By next year, all diabetes patients on Cigna plans will be able to join, according to the Washington Post. It could affect as many as 700,000 patients who rely on Cigna or Express Scripts for insulin coverage, and will apply even before they’ve met their deductible.
But there are several catches here. In order for Cigna patients to participate, their employers will have to opt into the change in plan, Stat reported. And Cigna is just one of many insurance companies out there, covering less than 1 percent of the 23 million living with diabetes in America.
“Any measure that helps only a portion of the population through opaque deals between the players responsible for this crisis is not a solution,” Elizabeth Pfiester, the founder and executive director of the patient group T1International, told Vox. “We need long-term assurance that manufacturers will be held accountable and prices will be affordable — not another Band-Aid.”
Most patients with diabetes are still going to be vulnerable to the whims of drug company pricing, since companies can still set prices at whatever level they wish. And no drug is better for understanding how that happened than insulin.
How the companies justify their price increases
With Type 1 diabetes, which affects about 5 percent of people with diabetes in the US, the immune system attacks the insulin-producing cells in the pancreas, leaving the body with little or none of the hormone. With Type 2 diabetes, the pancreas still makes insulin, but the body has grown resistant to its effects. In both cases, patients rely on insulin medication to keep energy from food flowing into their bodies.
But the US is a global outlier on money spent on the drug, representing only 15 percent of the global insulin market and generating almost half of the pharmaceutical industry’s insulin revenue. According to a recent study in JAMA Internal Medicine, in the 1990s Medicaid paid between $2.36 and $4.43 per unit of insulin; by 2014, those prices more than tripled, depending on the formulation.
The doctors and researchers who study insulin say it is yet another example — along with EpiPens and decades-old generic drugs — of companies raising the cost of their products because of the lax regulatory environment around drug pricing. “They are doing it because they can,” Jing Luo, a researcher at Brigham and Women’s Hospital, told Vox in 2017, “and it’s scary because it happens in all kinds of different drugs and drug classes.”
In countries with single-payer health systems, governments exert much more influence over the entire health care process.
In England, for example, the government has an agency that negotiates directly with pharmaceutical companies. The government sets a maximum price it will pay for a drug, and if companies don’t agree, they simply lose out on the entire market. This puts drugmakers at a disadvantage, driving down the price of drugs.
The US doesn’t do that. Instead, America has long taken a free market approach to pharmaceuticals.
Drug companies haggle separately over drug prices with a variety of private insurers across the country. Meanwhile, Medicare, the government health program for those over 65, which is also the nation’s largest buyer of drugs, is actually barred from negotiating drug prices.
That gives pharma more leverage, and it leads to the kind of price surges we’ve seen with EpiPens, recent opioid antidotes — and insulin.
Insulin manufacturers like Eli Lilly, which has raised prices every year since 2014, say the increases are just the price tag that comes with innovation — creating more effective insulin formulations for patients.
According to a 2017 Lancet paper on insulin price increases, “Older insulins have been successively replaced with newer, incrementally improved products covered by numerous additional patents.” The result is that more than 90 percent of privately insured patients with Type 2 diabetes in America are prescribed the latest and costliest versions of insulin.
But it’s not clear that these newer formulations are significant improvements on older ones, the researchers wrote: “The data are not definitive on whether insulin analogues being used today are safer or more effective for most patients with type 2 diabetes than human insulins used widely in the 1990s, for which the main patents have expired.”
Luo, the Lancet paper’s lead author, doesn’t find the “cost of innovation” argument very convincing. In his research, he’s come across many examples of the same insulin products that have been continuously available for years without improvements, yet their price tags have gone up at a much higher rate than inflation.
“The list price of these products are already out of reach for most Americans living with diabetes — in some cases, over $300 a vial,” he said. “It is also strange to see Humulin still priced at over $150 a vial considering this product was first sold in the US in 1982.”
Drugmakers do this because they can
So insulin’s drug pricing problem is much bigger than anything Cigna alone can fix. But more changes in the market may be on the horizon.
The three major insulin makers — Eli Lilly, Novo Nordisk, and Sanofi — will testify before the House Energy and Commerce’s oversight subcommittee next week, focusing more attention on the issue. Lawmakers, including Chair Chuck Grassley (R-IA) and Ron Wyden (D-OR), have also been investigating the problem and sending letters to drug companies asking them to account for their outrageous price hikes.
But while the pressure around insulin may be mounting, we’re also seeing the terrible impact of rising insulin prices on patients: people being forced to taper off insulin so they can pay their medical bills — and winding up with kidney failure, blindness, or even death.
One clear solution to the problem would be to bring a generic version of insulin to the market. There are currently no true generic options available — though there are several rebranded and biosimilar insulins — in part because companies have made those incremental improvements to insulin products, which has allowed them to keep their formulations under patent, and because older insulin formulations have fallen out of fashion.
But history has shown that when cheaper generic options are introduced to the market, overall drug prices come down. “There are no generic competitors for any of Eli Lilly’s insulin,” Luo said. A century after insulin was discovered, it’s about time we had one.