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Why Did Insulin Prices Go Up 2021


Generics And Biosimilars Are Driving Down The Overall Price Of Insulins

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Since 2019, the overall retail price of insulins has declined by about 5%. Most of this decline can be seen as a result of recent approvals of generics and biosimilars.

In 2019, Eli Lilly released the first generic insulin, insulin lispro, the counterpart to the popular rapid-acting insulin Humalog. Since then, the FDA has approved generic versions of Humalog 75/25 , , , and most recently, Lantus .

Retail prices for generic insulin lispro and insulin aspart are currently about half that of Humalog and Novolog, respectively. The same goes for the generic mixed insulins, insulin lispro 75/25 and insulin aspart 70/30, compared to Humalog 75/25 and Novolog 70/30, respectively.

Generics have been instrumental in bringing down costs for some patients. Instead of paying a retail price of over $700 for a package of 5 Humalog KwikPens, for example, patients can now pay closer to $300 for a package of 5 generic insulin lispro KwikPens. However, weve seen that limited insurance coverage can prevent some patients from accessing these savings.


Like generics, follow-on products have also helped to bring down insulin prices overall. Generics contain the exact replicas of the active ingredients in a brand-name medication. But biologic drugs like insulin are nearly impossible to recreate. So sometimes, manufacturers make close copies of them instead, known as follow-ons or biosimilars. Biosimilars tend to be more expensive than generics but less expensive than brands.

Why These 8 Drugs Have Gone Up The Most In Price

  • A U.S. House committee found that the list prices of several drugs, including insulin, continue to rise.
  • But experts say that drug companies arent solely behind high prices.
  • Intermediaries including wholesalers, health insurers, pharmacies and pharmacy benefits managers can also impact the cost of drugs.

Drugmakers use practices that are unsustainable, unjustified and unfair to patients and taxpayers, according to findings from a report released in December by the U.S. House of Representatives Committee on Oversight and Reform.

As a result, millions of Americans have been unable to afford lifesaving medications, the report found.

Around 3 in 10 Americans say that they havent taken their medications as prescribed due to concerns about cost, according to a Kaiser Family Foundation survey from October 2021.

The survey also found that the majority of Americans across all parties say drugmaker profits are a major factor in the high prices of prescription drugs.


But experts say that theres more than just drug companies behind the rising prices. Intermediaries including wholesalers, health insurers, pharmacies, and pharmacy benefits managers can also impact the cost of drugs.

Monthly Insulin Price As High As A Playstation 5

Catie Santos, a 28-year-old from New Orleans, grew up knowing about Type 1 diabetes because her brother was diagnosed with the disease at age 10. On her 23rd birthday, she was horrified to learn she had the same disease.

Since then, she has met people who were diagnosed in their 50s with the disease once known as juvenile diabetes.

The monthly price of her insulin, she said, ran as much as the new Sony PlayStation 5, which can carry a price tag of more than $1,000.

Santos went on her parents insurance, but that assistance ended when she turned 26. You really have to figure out this insurance thing quickly, she said. Ive known diabetics who had to take corporate jobs just to stay alive.


Some have to move back home with their parents to make it financially, she said. She is one of them.

Her most recent scare took place in the wake of Hurricane Ida, which left her family without power for three weeks. She had to cram a months worth of her insulin into the refrigerator of her aunt, who happened to have a generator.

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The high cost of insulin has prompted some Americans to head for Canada or Mexico and still others manage to get the medicine or diabetic supplies through an underground network.

Through social media, she connects people, she said. If I hear people are in need, Ill start a Twitter thread. Were not trying to profit off of people were trying to work the system that profits off of people.


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The Only Thing Thats Changed Is The Price

In 2019, Congress heard testimony from diabetes experts and others regarding the high cost of prescription drugs.

I can help shop for the best price of insulin, connect them with a discount pharmacy, sometimes switch to a less expensive product, said Dr. Kasia J. Lipska, an endocrinologist and assistant professor at Yale School of Medicine. But these are Band-Aid solutions. What we need to do is exert pressure on drug makers to reduce those prices.

Over the past quarter century, the prices of products have increased an average of 75%. Thats a fraction compared to the huge hike for insulin. A vial of Humalog , which cost $21 in 1996, now costs as much as $400 a more than 1,800% increase.

During that time, theres been no innovation to improve Humalog, Lipska said. Its the same exact insulin hormone. The only thing thats changed is the price.


A study she worked on found that 1 in 4 rationed insulin because of the high price.

Executives for the drug makers and the pharmacy benefit managers acknowledged to Congress in 2019 that the cost of insulin had become too expensive.

Kathleen Tregoning, an executive vice president at Sanofi, testified that while the treatment of diabetes has been transformed by medical innovations, the landscape in which patients access medications has also fundamentally changed, and not for the better. We understand the anger of patients who cannot afford the insulin they need due to rising, out-of-pocket costs.

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(Watch) Her Son

WASHINGTON President Trump on Tuesday will announce a prescription plan drastically reducing the cost of insulin for American seniors who rely on Medicare.

The deal struck with the nations insulin manufacturers and health care providers will limit the co-pay for a months supply of insulin to $35 a 66 percent reduction to current costs, White House counselor Kellyanne Conway said.


The initiative will apply to the 1 in 3 Medicare enrollees who have diabetes, which is approximately 3 million people.

The announcement comes on the heels of hearings into the rising cost of insulin in the United States, with one diabetic groom-to-be dying in 2019 after switching to a cheaper version to help pay for his wedding.

Having more predictable out of pocket costs will help seniors adhere to their doctors orders, Conway told reporters on a briefing call.

The initiative will be unveiled during an event in the White House Rose Garden with Trump and the nations health care executives.

The plan, effective from January 2021, will save seniors approximately 56 percent or an average of $446 each year in insulin co-pays, said Seema Verma, administrator of the Centers for Medicare and Medicaid Services.


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The Role Of Pharmacy Benefit Managers

A definition you need to know for this section: insulin WAC is the wholesale acquisition cost, an estimate of the manufacturers list price for a drug to wholesalers or direct purchasers, that does not include discounts or rebates.

Speculated about for some time but difficult to prove because of private contracts is the sheer amount of cash being collected by PBMs. Originally created to help get needed drugs to patients more efficiently, PBMs have unfortunately become a key agitator to high out-of-pocket drug costs.

Page 5 of the report outlines the issue drug manufacturers increased insulin WAC, in part to give them room to offer larger rebates to PBM and health insurers, all in the hopes that their product would receive preferred formulary placement. This pricing strategy translated into higher sales volumes and revenue for manufacturers. In some cases, manufacturers appear to have been concerned that decreasing WAC prices would be viewed negatively by PBMs, since PBMs capture a portion of rebate revenue and are also paid administrative fees based on a percentage of WAC.

From the report, PBMs play a major role in the drug supply and payment chain by negotiating drug rebates and discounts with manufacturers and managing drug benefits for health care payers, including private insurers, employers, and entities that provide coverage under Medicare, Medicaid, and the Childrens Health Insurance Program .


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There have been several initiatives carried out in the commercial sector to address insulin affordability. Last year, for example, the insurer Cigna and its pharmacy benefit management division Express Scripts announced a program designed to cap out-of-pocket costs for diabetic patients at $25 a month.

Moreover, the recent advent of biosimilar insulin products may help reduce out-of-pocket costs, as could the possibility of automatic interchangeability of biosimilar insulin and originator products.

Nevertheless, for a comprehensive approach to improving insulin affordability that reaches a larger number of diabetic patients the federal government would need to get involved, and it has to a certain extent.

Trump Administration has lowered out-of-pocket insulin costs for some

President Trump has made some dubious claims on insulin prices, including one he uttered during a September presidential debate. There, he boasted that he had helped lower the price of insulin to the point that its so cheap, its like water.


Trump also signed an executive order in July that would require federally qualified health centers to share the steep savings they receive through the 340B program with indigent patients, specifically for epinephrine and insulin products. But, this only applies to a very small portion hospitals participating in the 340B program. And, it doesnt resolve the much larger issue that the 340B program discounts arent generally winding up where theyre supposed to.

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Sharp Rise In Cost Of Insulin And Other Drugs

Special report: Insulin users reeling at 550-percent price increase

The 269-page House report is the result of a nearly 3-year investigation that involved a review of more than 1.5 million pages of internal drug company documents and five congressional hearings.

The investigation has provided a rare glimpse into the decision-making of many of the worlds most profitable drug companies, wrote Rep. Carolyn B. Maloney in a preamble to the report.


Three of the drugs included in the report are insulin products, whose high prices have long made this medication unaffordable for many people with diabetes.

The listed price of Humalog has increased 1,219 percent since it was launched, Lantus 715 percent, and NovoLog 627 percent, the report found.

These three companies, according to the report, control approximately 90 percent of the global market for insulin, which was first developed as a drug in the 1920s.

Medicare, the government health insurance program for Americans 65 and older, is currently not allowed to negotiate price discounts with drug companies.

If it were, the program could have saved more than $16.7 billion on insulin products from 2011 through 2017, the report found.


Other prescription medications included in the report that have seen large jumps in list prices include Mallinckrodts H.P. Acthar , Tevas Copaxone , Amgens Enbrel , AbbVies Humira , and Pfizers Lyrica .

Collectively, companies have increased the prices of the 12 drugs included in the report more than 250 times.

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$35 A Month For Insulin

Paris-based Sanofi said it makes its insulin pricing decisions independently from those of its competitors. Sanofi said the net price of its insulins declined by 53% since 2012, arguing the high prices charged to patients reflect decisions made elsewhere in the supply chain.

âOver the same period, the net price for commercial and Medicare Part D plans of Lantus has fallen 44.9%, while average out-of-pocket costs for patients with commercial insurance and Medicare Part D has risen approximately 82%,â Sanofi said.


âFor all the focus on the growth of list prices, today, the average net price of Lantus is below 2006 levels. That is why we support policy reforms to require health plans to share negotiated savings with patients by requiring patient cost sharing be tied to the net prices.â

Indianapolis-based Lilly offered a similar response in a statement.

âLilly, like other companies, monitors competitor list price changes that are available through publicly available services,â the company said. âHowever, any changes we make to our list prices are independent decisions, and to the extent they consider competitors they are informed only through publicly available data.â

Lilly in 2020 had announced that people with commercial insurance and those without insurance would be able to get monthly prescriptions of Lilly insulins for $35.

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The Role Of Insurance Companies

When negotiating with PBMs to create their insurance formularies, i.e. the products that they will provide insurance coverage for, insurance companies also receive portions of the drug rebates. Those rebates often go back to those enrolled under the insurance plans in the form of lower premiums. However, people who require maintenance medications like those for diabetes, asthma, etc. are the bulk of those paying for hefty rebates, while the rebates received by insurance companies themselves get spread amongst the entire population of those enrolled on a health insurance plan.

Over the last several years, further complicating privatized US healthcare, PBMs have merged with health insurance companies, further increasing their leverage, buying power, and ability to control the healthcare market. Express Scripts merged with Cigna, CVS Health with Caremark and Aetna, and Optum Rx became a subsidiary of UnitedHealth Group. These large mergers and acquisitions further complicate an already clunky system built more upon profit than patient care.

From the report, The Internal Revenue Service sought to address this issue in July 2019 when it released guidance that expanded the list of preventive services that an HDHP can cover below the deductible, to include insulin. However, this is a voluntary offering for HDHP plans it is up to the employer to decide if they want to offer this first dollar coverage , which creates an additional cost to the employer.

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The Claim: President Joe Biden Is ‘reversing’ An Executive Order Put Into Place By Donald Trump To Reduce Patient Costs For Insulin And Epinephrine

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For years, members of Congress have pressured drug companies and pharmacy benefit managers to bring under control the rising costs of insulin and epinephrine for millions of Americans with diabetes or allergies.

In July 2020, President Donald Trump signed four executive orders aimed at reining in prescription drug costs. One required that federally qualified health centers, which purchase insulin and epinephrine through what’s called the 340B drug program, pass along any savings they receive from discounted drug prices to medically underserved patients.

The rule blocks health centers from receiving future federal grants unless they charge patients no more than their acquisition price for insulin and EpiPens epinephrine auto-injectors plus a small administration fee.

At the time, the U.S. Department of Health and Human Services said the move would increase access to insulin and EpiPens for the 28 million patients who visit community health centers annually, over 6 million of whom are uninsured.

On the campaign trail last year, Trump made repeated claims that, because of the executive orders, he was succeeding in his promise to lower drug prices.

HHS approved the rule affecting community health centers in December, and it was to go into effect Jan. 22.

A user on Facebook claims President Joe Biden is now “reversing” Trump’s executive order. This is NOT a partisan issue and will harm Americans, reads the Jan. 22 post, which has almost 1,000 shares.

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Overall Insulin Epipen Pricing Isn’t Affected

Nationally, 30 million Americans suffer from diabetes, according to the American Diabetes Association. And nearly one in 50 Americans are at risk for anaphylaxis brought on by certain foods, insect bites, medications and latex, according to a 2013 study by the Asthma and Allergy Foundation of America.

But not all of those patients require insulin or epinephrine. And most who live in extreme poverty, or less than 200% of the federal poverty level an equation that works out to $34,840 for a family of two already receive free or discounted prescription drugs, a national health policy expert said.

Karyn Schwartz, a senior fellow at the Kaiser Family Foundation, a nonpartisan nonprofit that analyzes health policy, said some patients served by the 1,400 federally backed health centers nationally, such as those with high deductibles or those who are uninsured and paying list prices for the drugs, would have benefitted from the new pricing rule.

But it’s hard to say how many, she said. It’s also difficult to speculate about how many new patients would switch care to a community health center to take advantage of the discounted insulin and EpiPen prices, she said.

What This Means For You

You or a loved one might be paying high prices for insulin. Check with your insulin manufacturer to see if you qualify for a patient assistance program. If you aren’t eligible for these programs, talk to your healthcare provider or certified diabetes care and education specialist about other options.

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