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HomeExclusiveWhy Did The Cost Of Insulin Go Up

Why Did The Cost Of Insulin Go Up


What Can We Make Out Of These

VERIFY: Did Biden raise the price of insulin?

All in all, it is true that the Biden administration did freeze a new proposal that would require community health centers to pass along discounts on insulin to their patients.

However, we can also say that the media frenzy over President Biden increasing the cost of insulin by ordering a regulatory freeze on the new regulation does not hold any truth at all. The 60-day delay will not cause the price of insulin to increase and there is also no evidence to suggest that the rule would make insulin prices even cheaper, which are already offered with huge discounts on qualified health facilities.

Big Pharma Hated Trump

Trumps most favored nation law seeks to lower prices in Medicare by linking the costs of certain medicines to cheaper prices in other developed countries. People often complain of buying the same drug in the U.S., when the price in Canada and Mexico are far cheaper. Obviously, the pharmaceutical industry strongly opposed the measure, arguing it would bring foreign price controls to the U.S. healthcare system and limit access. Groups including the Association of Community Cancer Centers and the Pharmaceutical Research and Manufacturers of America sued to block the rule. In December 2020, U.S. District Judge Catherine Blake issued a nationwide injunction on Trumps most favored nation drug pricing rule that would tie Medicare Part B drug prices to those paid in other wealthy countries starting January 1, 2021. The Trump administration also removed the gag clauses that prevented pharmacists from telling patients how to buy less expensive drugs. Apparently, pharmacists could not talk to patients about how to buy drugs.

This initiative could save the over 1.3 million seniors who rely on Medicare Part D plans and use insulin, an average of $446, or 66 percent, a year on their insulin costs. For those whose health, and even lives, depend on insulin, the savings will be nothing short of a godsend.


How Rebates Most Of The Cost Of Your Insulin Work

The math is infuriating, but heres the heavily-simplified basics of how rebates work if you made a product for $5 and wanted to sell it, you may set the price at $10, to create a $5 profit. With that $5 profit, you can invest back in your company to create better products, pay yourself whatever you want to do with your $5.

But lets say you want your product to be in more places and available to more people. You might hire a middle person to place your product in new stores across the country, and theyll charge a fee, which is reasonable.

When you begin, their fee is $1. So that you can keep your $5 profit, you raise your price to $11. Still reasonable. But over time, your middle person makes themselves indispensable and knows it. Youre making way more money because of how many products youre able to sell, so youre not about to drop your middle person.

And oh oops you also signed a contract with your middle person to ensure youll always get your product placed in these nation-wide stores, so youre locked in. And part of that contract was an understanding that you wont lower your price, since that would impact your middle-persons profit.

So now, your product costs $50. Its the same product youve never improved it. Your customers are receiving no more value than when the product cost just $10. Over time, you wanted to make more money from it, so your profit is now $10.


Its still $5 to make your product.

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Pharma: Biden Freezes Trumps Lower Cost Insulin And Epinephrine Rule

Posted on 01/22/2021

Big pharma is smiling big right now. The big three insulin producers are Eli Lilly and Company, Novo Nordisk A/S, and Sanofi S.A., in which they dominate more than 90% of the world insulin market by value. After swearing-in, U.S. President Joe Bidens HHS froze the Trump administrations December 2020 drug policy that mandates community health centers to pass on all their insulin and epinephrine discount savings to patients.

The rule was finalized in late December 2020. The drug rule was put in place to benefit patients who have a hard time paying for expensive insulin and allergy medication. Former President Trump campaigned on lowering the price of important pharmaceutical drugs like insulin, which is used to treat diabetes, and epinephrine. Diabetes afflicts over a quarter of Medicare beneficiaries and drives billions in Medicare spending every year. More than 20 million Americans have diabetes, in which the body fails to properly use sugar from food due to insufficient insulin, a hormone produced in the pancreas.


Fact Check: Is Joe Biden Responsible For The Rising Cost Of Insulin

How Much Does Insulin Cost In Canada

Out of roughly 330 million people living in the U.S., about 34 million are living with diabetes.

For individuals with type 1 diabetes, access to insulin is the difference between life and death.

Recently, many Americans have been expressing their outrage on social media at the rising cost of insulin and wonder who is to blame.

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Walmart To Launch Its Own Line Of Insulin Claiming It Will Cut Costs

Walmart on Tuesday said it will start selling its own private brand of analog insulin with prices that are up to 75% below the cost of competing products. Insulin prices have escalated for years, making them unaffordable for some people with diabetes.


Walmart said the private-brand insulin will cost $72.88 per vial and $85.88 per FlexPen, which the retailer said reflects prices that are between 58% to 75% lower than other insulin products on the market. That will save patients $101 per branded vial and $251 per package of branded FlexPens, according to Walmart.

The rising cost of insulin has drawn criticism from lawmakers and patients alike, with some diabetics saying they’ve had to ration insulin or make other risky decisions because of problems affording it.

Although insulin has been used as medication for roughly a century, no generic versions of the drug are available. Only three manufacturers Eli Lilly, Novo Nordisk and Sanofi control 99% of the market. Walmart said that its private brand insulin will be made by Novo Nordisk.

Tracey D. Brown, chief executive officer of the American Diabetes Association, said in Walmart’s statement that the group welcomed “all affordable solutions” to managing the disease.

“Diabetes often comes with high medical costs, estimated around $9,601 per person per year,” Brown said.


‘its Life Or Death Without My Insulin’: Central Ohio Man Explains The Drastic Cost Of Insulin

COLUMBUS, Ohio President Joe Biden froze a rule by President Trump that he said would make insulin cheaper for low-income families. But there is debate if President Trump’s policy would help diabetic families at all. This 60-day freeze is not increasing the cost of insulin, it just means President Biden has time to look over the policy.

Dylan Knecht was diagnosed with Type-1 Diabetes when he was just 2 years old

Its always at the front of my mindit is life or death without my insulin I would not be able to function I would not be able to be a living healthy human being, Knecht said.

Dylan gives himself anywhere from six to ten injections of insulin each day and needs three to five vials each month. Dylan uses the brand Humolog for his insulin back in 2014, according to GoodRx, a vial of insulin, which is about 1,000 units, would cost $210, that price rose to $360 by 2018.

I have a $4000 deductible that I personally have to hit before insurance kicks in at all. Unfortunately, I had that by April every single year on diabetes cost alone, he said.


What we see is a lot of individuals or families who suddenly get this disease and then suddenly they have to start spending 400 or more dollars a month on insulin for one person and that rocks your budget, said Chuck Gehring, the President and CEO of the company that manages the Central Ohio Diabetes Association.

Gehring says some diabetics will try to stretch their insulin or water it down to reduce costs.

In Other News

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Key Findings From The Investigation Into United States Insulin And Drug Costs:

Drug manufacturers “aggressively” raised the list price of their leading insulin brands an average of 300% over the past decade “absent significant advances in the efficacy of the drugs.” As Sen. Grassley remarked, “There is clearly something broken when a product like insulin thats been on the market longer than most people have been alive skyrockets in price.”


Getting on a PBM’s formulary the list of drugs covered by health insurance plans that hire the PBMs is critical to pharmaceutical companies. Thus, the drugmakers offer rebates of as much as 70% of the drug’s list price to the PBMs. While most of the rebate is passed on to health insurers, PBMs keep a certain percentage meaning the higher the drug price the more money the PBMs make. It’s the same incentive for an administrative fee of as much as 5% often collected by PBMs.

In theory, competition drives down prices, as consumers sometimes see in “gas wars” between filling stations on opposite corners. But newly divulged emails from the drug companies show the reverse: Instead of seeking to undercut their competitors’ prices, drugmakers closely monitored what their rivals charged so they could raise their own prices as quickly as possible sometimes matching the competitor’s increase in as little as 25 minutes. This practice is dubbed “shadow pricing.”

Facts about diabetes:

* 7th leading cause of death in America

* More than 34 million Americans have the disease


The Role Of Pharmacy Benefit Managers

Why has the cost of insulin grown so much?

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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Lilly Cares Foundation Patient Assistance Program

The Lilly Cares Foundation Patient Assistance Program provides free Eli Lilly insulin products for people with a limited income who have Medicare Part D or no insurance coverage.

The income requirements depend on your state and the specific Eli Lilly insulin your doctor has prescribed. Youll need to reapply for this program every year.

Legislation And The Future Of Insulin Affordability

There are multiple efforts underway to reduce the cost of insulin. Lawmakers and advocacy groups alike are working to help people afford insulin.

The ADA has endorsed three possible pieces of legislation that could affect insulin affordability if they were passed. These are:

  • The Insulin Price Reduction Act. This act would provide incentives for manufacturers to lower the cost of insulin.
  • The Safe Step Act. This act would eliminate insurance company step therapy programs that can drive up costs.
  • The Chronic Condition Copay Elimination Act. This act would remove copays for medications used to treat conditions such as diabetes.

These acts may not pass and become law. However, theyre among the current suggestions to help bring down the cost of insulin. Broader healthcare laws and acts that aim to bring down the cost of accessing care in the United States could also affect the cost of insulin.


Read Also: What Happens In Type 1 Diabetes

The Role Of Insulin Manufacturers

The list price of insulin has risen steeply over time, with the greatest increase over the last fifteen years. For context, one vial of insulin typically lasts an insulin-dependent person anywhere from 5 to 20 days. Most insulin-dependent people require 2-3 vials of insulin per month, while some require 6 or more. Every case of diabetes is unique.

In the late-90s, one vial of analog insulin cost about $25-40 per vial, without insurance. By 2005, this had doubled to about $80, then started sharply increasing about $125 by 2010, $260 in 2015, and depending on the type of insulin up to $275 and sometimes as much as $500 or more for long-acting analog insulins. Experts have stated that, even in a capitalist but competitive market, an insulin-dependent person should be paying $130 or less per year for their insulin needs.

These price hikes are not limited to insulin all drugs, including all glucose regulating medications and most recently, diabetes devices, are subject to the rebates problem. But insulin is certainly where we see one of the clearest examples of how the US healthcare system is broken. Not only do PBMs and insurance companies benefit, but the Senate Finance Committees January 2020 report states that despite the insulin manufacturers saying that they are not making as much off insulin as people say, evidence shows that they are.

The report calls out several clear instances of the pricing increase practices:


Will Anything Change To Lower Drug Prices

Cost of Insulin

Ohio’s two senators both serve on the Finance Committee.

Ohio Democratic Sen. Sherrod Brown says a good starting point to lowering prices would be approving the major package the panel passed in 2019 before it became “another victim of Mitch McConnells legislative graveyard under Republican leadership.” The measure included Brown provisions designed to increase transparency for pharmaceutical manufacturers and PBMs alike.

“Ill continue pushing for the reforms we secured now that Democrats control the Senate, he said.

Ohio Republican Sen. Rob Portman also backed the Prescription Drug Pricing Reductions Act, which he noted “was the only major, bipartisan drug pricing reform package in the last Congress.”

The fact that the price of insulin a nearly 100-year-old, life-saving drug which costs very little to produce has continued to skyrocket is shameful,” Portman said.


He especially took issue with PBMs keeping millions of dollars worth of rebates and other manufacturer discounts that could be passed on to consumers.

“Both drug manufacturers and PBMs must do more to lower the high cost of this and other drugs, and I will continue to pursue bipartisan health-care and drug-pricing reforms this year, Portman said.

In a joint release, Wyden and Grassley said their measure “puts a stop to mindless price gouging and holds companies accountable when they do increase prices.”

How can I give/get help for diabetes treatments?

Examples:

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Why Are Insulin Prices Going Up Chuck Grassley Explains It

If Your Time is short

  • Insulin costs have increased dramatically in recent years, and innovations alone arent enough to justify the higher prices.
  • A bipartisan Senate report documented that the business practices of of manufacturers, health plans and PBMs, or pharmacy benefit managers, are key contributors to high prices.
  • There are some discounts available to offset high prices, but the discounts dont go to everyone with diabetes, and they vary from vendor to vendor.

More than 7 million Americans require insulin to treat their diabetes but some people struggle to afford the cost. On Jan. 14, 2021, Sen. Chuck Grassley, R-Iowa, tweeted, “2day Sen Wyden & I released Finance Cmte report on INSULIN costs Prices hv gone THRU THE ROOF for patients/taxpayers bc of manufacturer, health plan & PBM biz practices They make $$ as % of ballooning list price so no incentive to lower price on 100 yr old drug.”

Grassley has a history of attempting through proposed legislation to lower the cost of the drug, and Sen. Ron Wyden, D-Oregon, worked with him as the ranking minority member on the Senate Finance Committee when Republicans controlled the Senate.

Is Grassley right when he tweets about why insulin costs so much? To answer that question, we look, first, at those costs.

Featured Fact-check

We rate Grassleys statement True.

The Role Of Insurance

The ADAs Insulin Access and Affordability Working Group report found that nearly half of Americans have employer-sponsored health insurance. About 20% are insured through Medicaid, and 14% are insured through Medicare. Approximately 7% of Americans purchase health insurance on their owneither directly from an insurer or through a health insurance exchange. About 9% of Americans remain uninsured.

Diabetes is considered a pre-existing condition. According to research published in Diabetes Care, an estimated 1.9 million uninsured people with diabetes gained insurance coverage after the Affordable Care Act went into effect. More than half of those who gained insurance were low-income.

Still, having insurance doesn’t mean insulin is affordable. Insured patients will often pay a copay or a percentage, rather than the list price, for their insulin. Redmond says that cost could range from $30 to $50.

In cases of high-deductible health plans, patients have to pay the list price for their insulin until their deductible is met, which often translates to thousands of dollars out of pocket. Many patients just have a problem paying that much, says Redmond.

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How The Cost Of Insulin Has Changed

According to research published by the American Diabetes Association, the average price of insulin almost tripled between 2002 and 2013. In the United States, the cost is often passed onto the consumer directly. A study done by RAND Health Care found that the average manufacturer’s price for a unit of insulin in the US was more than 10 times the price in 32 countries.

According to The American Journal of Managed Care, when Eli Lilly first produced its Humalog insulin in 1996, a month-supply cost $21. In 2019, the one-month cost was around $275representing a 1,200% increase. The rate of inflation during that same time period was only 63.67%.

When the cost of insulin became a national talking point, Marissa said she heard a lot of comments about how you can get insulin for $25 a vial at Walmart. In reality, that kind of insulin is an older model that requires patients to follow a strict eating scheduleor experience large blood sugar fluctuations.

“That type of insulin is just not conducive to modern living,” she said.

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Within the past two years, eight states passed laws that capped the cost of insulin to $100 or less for a month’s supply. These states include Colorado, Illinois, Maine, New Mexico, New York, Utah, Washington, and West Virginia. That still leaves most of the country without price caps.

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