The Insulin Price Crisis, The Canary in the Healthcare Coal Mine!

Just as coal mines slowly slip into history, it’s time that the United States comes to the realization that our healthcare system is similarly past its useful life. And just maybe the current crisis around insulin pricing is the wake up call we need…people are actually dying…and it’s totally uncalled for…totally preventable…and we aren’t moving anywhere near fast enough to solve the problem.

The cost of insulin for diabetics…has drawn national scrutiny as Congress examines factors contributing to the nation’s escalating prescription drug prices. All people with Type 1 and some with Type 2 diabetes need the drug, but regular price hikes make insulin difficult to afford for the uninsured and those whose coverage requires significant cost sharing.

Patient advocates are becoming increasingly vocal about the affordability of a drug invented nearly a century ago by scientists who took steps to make the medicine inexpensive.

The price of modern versions of a drug that more than 7 million Americans need to live nearly tripled from 2002 to 2013, according to one study. Type 1 diabetics paid an average of $5,705 for insulin in 2016 – nearly double what they paid in 2012, according to the Health Care Cost Institute.

The price for one vial of Eli Lilly’s Humalog surged from $35 in 2001 to $234 in 2015. From 2013 to this year, Novo Nordisk’s Novolog jumped from $289 to $540 and Sanofi’s Lantus from $244 to $431, according to a committee letter.

A vial of insulin loses potency after being opened for 28 days. The amount of insulin a patient needs varies depending on such factors as age, weight, diet and overall health.

These quotes provide a quick insight into the issue…why would a drug that’s been on the market for 100 years suddenly see price increase spirals at these levels? Yes, they are newer versions of the original insulin but they are totally reinventing the product…just improving it. And generally an established product gets more affordable the older it gets…or at least only increases at the rate of inflation…well if normal business forces are at work.

Well as we know, our healthcare system is broken…and the portion that supplies the critical drugs and fills prescriptions is the biggest danger in the system. The government hasn’t helped…by preventing medicare from negotiating prices. That in itself has removed a very powerful restraint on drug companies and their ability to price. And in this particular instance the fact that people literally need insulin or they will die has given drug companies undue power. Now the Senate is starting to take testimony on how all of this works and how the prices have increased so rapidly…but what took them so long?

Now here’s a little complication that I wasn’t aware of…maybe you were…but it seems blatantly illegal to me…and ethically challenged at the least:

Affordability Working Group to study rising insulin prices and affordability of the life-sustaining medicine. The group’s study concluded that a complex supply chain from the drug factory to the pharmacy might promote higher prices.

Pharmacy benefit managers, which negotiate drug prices on behalf of health insurers, demand rebates from drug manufacturers. Their leverage: placing the drug on an insurer’s formulary – the list of drugs that the insurance company will cover for insured consumers.

A drugmaker that offers a lower rebate might be excluded from a prescription drug plan or be placed on a less favorable tier that requires consumers to pay a larger portion on the tab.

How is the rebate not a bribe? And if you suggest that’s just good business practice…look at this next quote:

Van Nuys ( Van Nuys, a research professor at USC’s Schaeffer Center for Health Policy and Economics) says that if one drugmaker lowers insulin prices, that could put it at a competitive disadvantage compared with peers. That is because pharmacy benefit managers might still require a significant rebate.

Novo Nordisk says its insulin net prices declined at double-digit rates in 2017 and 2018 because of rebate demands.

Really? Isn’t one basic tenet of business that those who can make and sell a product at a lower price will grow their market share? Well at least that’s what we were told in business school. The way our drug delivery system works rewards exactly the opposite. The company who can push their prices to the point they can deliver the biggest bribe, I mean rebate, gets rewarded.

Now I understand the concept of a formulary (full disclosure: I worked as a pharmacy technician in a hospital pharmacy for two years and we had a formulary). It would be very difficult for any distributor or insurance provider to keep every drug on the market available for prescriptions. But it is incredibly mercenary to decide the contents of a drug formulary based on kickbacks and not efficacy of the drugs…how is this not illegal?

How is this not illegal? Shouldn’t drug companies be held accountable for co-operating with this rigged system? Shouldn’t insurance companies be held accountable for turning a blind eye to save a buck? Should the middle men be locked up for holding out their hands for rebates to do their jobs? How many more people have to die for absolutely no reason other than money?

As the Trump regime goes to court to try to finally kill the Affordable Care Act while ‘rebranding’ itself as healthcare friendly, keep the pressure on to replace the whole shebang with comprehensive universal single payer health care. The current system no longer works and appears to be infested with criminals.

Taylor (Simeon Taylor, a University of Maryland School of Medicine diabetes researcher), a member of the ADA working group, says insulin pricing is emblematic of the nation’s health system flaws.

Pharmacy benefit managers started to counter pharmaceutical industry’s pricing power. As these middlemen gained more clout, they began to demand higher rebates. Drug companies raised prices by amounts that are slightly less than what  pharmacy benefit managers demanded.

“This is a symptom of a dysfunctional health care system in the United States,” Taylor says. “I don’t want to put all the blame on the companies. From my point of view, the responsibility is in how our health care system is designed.”

So far, the only results we get are this:

Meaghan Carter died alone on the sofa of her suburban Dayton, Ohio, apartment last Christmas.

Like most people with Type 1 diabetes, the 47-year-old nurse had a kit of essential supplies within reach. It contained two empty vials of her preferred insulin, a partial vial of inexpensive Walmart insulin and a half-filled container of testing strips to measure blood glucose levels.

Uninsured, between jobs and with $50 in a bank account, Carter probably had attempted to stretch a limited supply of insulin until she got a final paycheck from her last job, family members say. She was scheduled to begin a new nursing job the following week that offered health insurance.

“There was no insulin at all in the refrigerator,” says Mindi Patterson, Carter’s sister-in-law. “She had gauze, bandages and all her nursing supplies. She had plenty to take care of others but not enough to take care of herself.”

When is enough, enough?


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1 thought on “The Insulin Price Crisis, The Canary in the Healthcare Coal Mine!

  1. Insulin is such an old medecine it should be as cheap as aspirins. The government should build it’s own facility and just bypass the vultures in the “private” sector.

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