By: Daniela Farzadfar, PharmD Candidate c/o 2020
Over 30 million Americans are currently living with diabetes. According to the American Diabetes Association (ADA), in 2017, the total cost of diagnosed diabetes in the United States was 327 billion dollars with 237 billion dollars alone attributed to direct medical costs.1 Among these direct medical costs is the cost of insulin, which has continued to increase over the last decade.
Insulin is used to help control blood sugar in patients who have Type 1 Diabetes – a disease in which the body cannot make insulin, and Type 2 Diabetes – a disease in which the body does not produce enough insulin or cannot use insulin properly. The amount of insulin a patient requires varies based on factors such as weight and diet.2 Consistent price increases have made insulin unaffordable for many, particularly those who are uninsured and those whose insurance coverage requires substantial cost sharing. According to the Health Care Cost Institute of the University of Chicago, patients with Type 1 Diabetes paid an average of 5,705 dollars per-person for insulin in 2016, almost double the average cost per-person in 2012.3 In addition, according to an official letter from the United States Senate Finance Committee, the price of one vial of insulin lispro (Humalog®), which is manufactured by Eli Lilly and Company, rose from 35 dollars in 2001 to 234 dollars in 2015. In comparison, the cost of Novo Nordisk’s insulin aspart (Novolog®) surged from 289 dollars in 2013 to 540 dollars in 2019, and the cost of Sanofi’s insulin glargine (Lantus®) increased from 244 dollars in 2013 to 431 dollars in 2019.4 Patients whose health and livelihoods rely on insulin administration have to buy insulin regardless of cost, further empowering large pharmaceutical companies who manufacture it.
What role do pharmacy benefit managers (PBMs) play in increasing insulin prices? Pharmacy benefit managers serve as middlemen between health insurance companies and drug manufacturers. They are the professionals who negotiate drug prices on behalf of health insurers and have the ability to demand rebates from drug manufacturers because they have leverage – in exchange for rebates, a PBM may offer to place a drug on a health insurer’s formulary. As a result, the drug manufacturer that offers a lower rebate than a competitor, may not have their product included on a health insurer’s formulary, or, may have their product placed on an insurance tier that is less desirable and requires consumers to pay more when they receive it. A PBM’s role in the establishment of insulin prices can also be seen by looking at insulin manufacturers’, “list prices” and “net prices”. While the “list prices,” or the amount insulin manufacturers charge, have greatly increased over time, the “net prices”, or the amount insulin manufacturers make after fees, discounts, and rebates to wholesalers or PBMs, have risen more modestly. 5,6
Patients living with diabetes are experiencing great adversity as a result of the rising costs of insulin. Due to being unable to afford insulin, many have resorted to rationing their medication, meaning that they purposefully take less insulin than prescribed to make it last longer. Others use insulin from friends and relatives or do not fill their insulin prescriptions at all. Taking less insulin than is physiologically required can ultimately lead to serious health consequences including diabetic ulcers, which can lead to amputations or kidney damage. 5,7
The issue of astronomically priced insulin has drawn national attention leading to Congress’ evaluation of the factors contributing to rising insulin prescription prices, particularly since the United States does not have federal laws in place which regulate the prices of prescription drugs. During the United States Senate Finance Committee hearing which was held in January of 2019, the public health impact of rising insulin prices was discussed at length. Potential solutions that were considered in attempt to reduce costs included restructuring Medicare Part D and re-evaluating the aforementioned PBM rebate system.8 It was also suggested that an effective solution would involve greater competition among those that supply insulin.5,6,8 Insulin manufacturers have tried to address the issue of increasing insulin prices by offering co-pay cards to limit patients’ out-of-pocket expenses and initiating patient-assistance programs which provide free medications to qualifying Americans.5 Eli Lilly and Company also recently released a half-priced, generic version of Humalog® called insulin lispro. A single vial of insulin lispro has a list price of 137.35 dollars.7
While some argue that these changes were made far later than public need required and that the price of even a generic insulin alternative is still exceedingly high, there are signs that more positive changes are in the works to ease the burden of insulin prices for frustrated Americans. The insulin price hikes that have occurred over the years have served as a cautionary tale and helped identify legislative flaws in terms of the lack of prescription drug pricing regulations in the United States.
As future pharmacists, we can do our part to help patients living with diabetes in both community and hospital settings by ensuring that they are adhering to their insulin regimens through counseling or refill reminders. We can also help in the effort to reduce costs by applying discount cards or finding more affordable alternatives for patients based on their insurance plans. The pharmacist is often the last health care professional a patient sees before being left on their own with their prescribed medications. It is, therefore, our responsibility to ensure that patients not only understand how to use their medications but that they actually have access to them in order to optimize health outcomes. This way, we can significantly impact our patients’ lives and simultaneously help address the issue of increasing insulin prescription prices.
- American Diabetes Association. Statistics About Diabetes. American Diabetes Association. https://www.diabetes.org/resources/statistics/statistics-about-diabetes. Accessed 08/30/2019.
- American Society of Health-System Pharmacists. Insulin Injection: MedlinePlus Drug Information. MedlinePlus. https://medlineplus.gov/druginfo/meds/a682611.html. Published 08/15/2017. Accessed 08/30/2019.
- Health Care Cost Institute. Spending on Individuals with Type 1 Diabetes and the Role of Rapidly Increasing Insulin Prices. Health Care Cost Institute. https://www.healthcostinstitute.org/research/publications/entry/spending-on-individuals-with-type-1-diabetes-and-the-role-of-rapidly-increasing-insulin-prices. Published 01/21/2019. Accessed 08/30/2019.
- Senate Committee On Finance. Grassley, Wyden Launch Bipartisan Investigation into Insulin Prices: The United States Senate Committee on Finance. United States Senate Committee On Finance. https://www.finance.senate.gov/chairmans-news/grassley-wyden-launch-bipartisan-investigation-into-insulin-prices. Published 02/22/2019. Accessed 08/30/2019.
- Tsai A. The Rising Cost of Insulin. Diabetes Forecast (American Diabetes Association). http://www.diabetesforecast.org/2016/mar-apr/rising-costs-insulin.html?referrer=http://www.diabetesforecast.org/2016/mar-apr/rising-costs-insulin.html. Published 03/2016. Accessed 08/30/2019.
- Holtz-Eakin D. Testimony Before the Senate Committee on Finance on Drug Pricing. American Action Forum. https://www.americanactionforum.org/testimony/testimony-regarding-drug-pricing-in-america-a-prescription-for-change-part-i/. Published 01/29/2019. Accessed 08/30/2019.
- March R. Generic Insulin Now Available After Nearly One Hundred Years of Regulatory Protection From Competition. FDAReview.org. https://www.fdareview.org/2019/03/25/generic-insulin-now-available-after-nearly-one-hundred-years-of-regulatory-protection-from-competition/. Published 03/25/2019. Accessed 08/30/2019.
- Barrett J. Rising Insulin Costs Addressed at Senate Hearing on Drug Prices. Pharmacy Times. https://www.pharmacytimes.com/resource-centers/diabetes/rising-insulin-costs-addressed-at-senate-hearing-on-drug-prices. Published 01/29/2019. Accessed 08/30/2019.