Monday, 27 May 2019

Why is Insulin So Expensive in America? – A Sweet Life

I was stuck for many years pushing paperwork in a miserable job that I hated. Why did I stay? Because I needed insurance to afford diabetes test strips, a glucose meter, an insulin pump, all the supplies to make it infuse insulin into my body, and insulin. The only insurance option for me with a pre-existing condition was to join a group plan through an employer. So, there I was, somewhat stuck, definitely underpaid, and absolutely miserable. Just to afford to stay alive. That was not all that long ago.

When I was diagnosed with Type1 diabetes in 1972, each bottle of insulin cost $1.49. One dollar and forty-nine cents. I recently found an ad from 1972 with that very price advertised. We didn’t need a prescription. We just needed to show up at the pharmacy and purchase it. By the time I graduated from college a few years later, insulin was still affordable at about $20 a bottle. Over the next few years, the price climbed to $50, then $75, then $80. Insurance wasn’t exactly paying a lot toward covering it, but that didn’t matter – I was able to afford the bill at the pharmacy window. While it was expensive and took a big chunk out of my monthly budget, I was able to afford it… even with a lousy job I hated.

I changed jobs and I got better insurance, but insulin was still a big part of my monthly budget. By 2010, insulin was close to $100 a bottle. Just last month, my local pharmacy informed me that it is now $330 per bottle of Novolog and Humalog. I use anywhere from 3 to 4 bottles of insulin per month. 

Now, because of the ACA, I don’t have to have to have a job to have health insurance coverage. I can buy insurance on the marketplace without being denied for a pre-existing condition. Yet, many people with diabetes still cannot afford to purchase insurance. Still, even with insurance we can pay a fortune for insulin. If an insurance plan has a high deductible, or if a plan has a high co-pay, or if an employer’s plan has a 3-month waiting time before benefits kick in, or if the plan only covers one or two bottles a month, or if a person makes too much to qualify for Medicaid, but not enough to afford monthly insurance premiums, a person with diabetes will pay an outrageous proportion of their income to stay alive. Just to stay alive, using a medication that has existed for nearly 100 years and was supposed to always be affordable and widely available. The researchers who identified insulin as the life-giving hormone that it is, sold their patents for $1 each to guarantee that insulin would be easily available in perpetuity. That has obviously changed.

Why is insulin so expensive? The short answer is… we don’t know

The pharmaceutical manufacturers have pointed their fingers at Pharmacy Benefits Managers (PBMs) and at health insurance companies while claiming that the price the manufacturers charge has little to do with what patients pay at the pharmacy window. Another factor is that many insurance plans and PBMs receive rebates that are based on the reimbursement price and the price along the distribution route. However, the price that the manufacturers charge is the starting point.

We do know that insulin is affordable in other countries. A recent study showed that the share of insulin users in North America is 14% of all insulin users around the world, while the percent of sales in North America is near 50% of total world-wide sales. Insulin users in North America contribute a disproportionate amount to pharmaceutical companies’ bottom lines. Looking a little deeper, we know that insulin in Canada can be purchased for approximately $30 per bottle with no prescription required, while in the US it is $330 for the same exact bottle of insulin. We have no concrete information to explain this discrepancy, but it is highly likely that the manufacturers are still making a profit on insulin in other countries even when selling at a significantly lower price than in the U.S.

Over the last couple of years, several states have passed legislation to require pharmaceutical manufacturers to report the amount they are charging when a bottle of insulin (and other drugs) leaves their facility. These pieces of legislation are commonly known as pharmaceutical transparency bills. It is a