Those huge pharma companies control the market for insulin, an age-old drug that millions of diabetic patients need to function on a daily basis. Estimates of those with diabetes in the United States top 30 million.
While the Trump administration touts its efforts to lower drug prices with its "blueprint," the debate over how drugs are priced and how high those prices are in the U.S. picks up speed. Patient groups elected officials and the American Medical Association are now calling on drug companies to explain how they arrive their prices for insulin.
Part of the challenge for diabetics is that there is no generic form of insulin on the U.S. market. Generics are a fundamental player in the domestic market in not only presenting name brand drugs with competition, but also in presenting both patients and physicians with lower priced alternatives to branded meds.
The absence of a generic in the insulin market is particularly striking considering insulin was first discovered in 1921.
Insulin allows diabetics to control their blood sugar levels and thus their diabetes. Diabetic patients are unable to produce enough insulin and so they use medication.
The American Diabetes Association, the primary advocate group for diabetic patients in the U.S. says that average price of insulin almost tripled over 11 years from 2002 to 2013. According to Evaluate Pharma, revenues derived from diabetic medications in 2016 totaled $17.4 billion for the top 10 selling drugs.
Novo has three drugs, Victoza, Levemir and NovoLog for treating diabetes, and their sales totaled $5.5 billion in 2016. Eli Lily has three as well, Humalog, Humlin and Trulicity and those sales totaled 3.29 billion.
Moreover, one out of every three Medicare dollars go to treating diabetic patients. On a yearly basis in the United States, treating diabetes costs $327 billion.
Earlier this month, the American Medical Association called for both the Justice Department and the Federal Trade Commission to look into the pricing of insulin and how competitive the market is.
"It is shocking and unconscionable that our patients struggle to secure a basic medicine like insulin," said AMA Board Member William McDade, M.D. "The federal government needs to step in and help make sure patients aren't being exploited with exorbitant costs. The AMA also plans to educate physicians and policymakers on ways to tackle this problem, and transparency from manufacturers and PBMs is a good place to start."
The AMA also called for more clarity about how drug companies and pharmacy benefit managers interact when it comes to the setting of a price for insulin medications.
Insulin patients are not alone in being confused over how prices are set. Drug companies typically present a price to pharmacy benefit managers, who negotiate on behalf of insurance companies and HMOs to lower drug costs. But between rebates, discounts, and a range of prices presented by drug companies, the pricing process becomes opaque.
Representatives Diana DeGette, D-Colo., and Tom Reed R-NY, have led an effort to get drug companies and PBMs to open up about how the system works, asking for data at the end of last year. The bipartisan inquiry looked at whether value-based contracts could be effective in bringing the price of insulin down. At this point it is unclear whether that model will work, according to findings by the two representatives. But they are continuing to explore how the price of insulin can be lowered.
Senator Susan Collins, R-Maine, is also looking at the price of insulin as part of her work on the Senate Aging Committee.
Dr. Jeremy Greene, a professor at Johns Hopkins University, said in congressional testimony last month that he has seen an increase in his diabetic patients who can't stick to their prescription schedule because they are having challenges affording their medications. Greene also warned of the difficulty in getting prices lowered if drug makers are allowed to avoid going off-patent with their medications by making tiny changes in the drugs to keep them from generic competition.
Attorney Generals from New Mexico, Minnesota, and Washington had made official demands for information from some drug makers and those states have passed along information to legal officials in California and Florida. And the U.S. attorney for the Southern District of New York has reached out to Eli Lilly, Novo Nordisk, and Sanofi looking for information about their insulin programs, according to public filings.
Ken Inchausti, director of corporate communications for Novo Nordisk, said "We've entered collaborations with CVS and ESI in providing our Novolin line of human insulin for about $25 a vial. It's also been available at Walmart for a decade for the same price under the brand name, Relion. And, we have a patient assistance program. We've been encouraged by the dialogue and collaboration across the healthcare system to address affordability for the American people. We have and will continue to be part of that.
The statement from Sanofi continued, "Yet despite our best efforts, we realize that some medicines remain economically out of reach for some patients. As a company, we take this issue seriously and continue to find innovative ways that bring forth solutions to help make insulins affordable for all."