01 September 2016

If you're not already angry about pharmaceutical prices, read about insulin

As reported in the Montana Standard:
A massive spike in insulin prices is causing a health crisis for millions of diabetes patients who depend on the lifesaving drug, doctors say. Now, after years of rapid increases having nothing to do with available supply and not matched elsewhere in the world, those in the U.S. insulin supply chain are blaming each other....

From 2011 to 2013 the wholesale price of insulin went up by as much as 62 percent. From 2013 to 2015 the price jumped again, from a low of 33 percent to as much as 107 percent...

"This borders on the unbelievable," Davidson said, citing an extremely concentrated insulin which "in 2001 had the wholesale price of $45. By last year, the cost had skyrocketed to $1,447" for the same monthly supply....

Pricing of insulin, as with other medications, is controlled by the manufacturers, the insurance companies, and pharmacy benefit managers — the middlemen who negotiate the prices that the insurance companies pay....

"We don't know what the benefit manager is paying for the insulin from the pharma company. It's backroom deals," Hirsch said. "You can call them rebates, you can call them kickbacks, you can call them bribes, but those are secret deals on which we don't have the details."...

"You may not be able to prove who's behind the price rigging, but remember these prices are not an issue in Canada or in Europe or other countries where the governments keep the drug makers from going wild. It's only in America."...Three pharmaceutical companies control almost all the world's supply of insulin. In addition to Eli Lilly, headquartered in Indianapolis, there is the Danish company Novo Nordisk, which says it makes half the insulin used by diabetics around the world, and the French company Sanofi, which says it has 18 percent of the market...

Lilly said it could not speculate on why individual costs went up. "Lilly does not set the final price a patient pays for our medicines. Wholesalers and pharmacies ultimately price the product at retail," said communication manager Julie Herrick Williams. "The patient's insurer, the type of plan, and the individual pharmacy all play a role in the price," she said. "Changes to the U.S. healthcare system are the primary driver for increased insulin cost for consumers. With the adoption of cost-sharing plans, like high-deductible health plans, more direct costs are shifting to the people who need treatments."
A single-payer system would eliminate many of these price-gouging practices.  Readers who are in favor of the current system (i.e. those who are healthy and/or wealthy) please chime in with your reasons for supporting it.

More at the link.  The Reddit discussion thread makes note of the advantages of traveling to Mexico to purchase meds.


  1. A /less/ regulated market would also solve some of these price-gauging practices. Why isn't there a plucky upstart undercutting the inflated market? (spoilers: it's the FDA)

    I'm not sure very many people are actually in favour of the current system per se. It's a compromise position that allows each side of the argument to point out all the downsides of accommodating the other side and not moving further towards their favoured extreme.

  2. It's no longer a supply and demand issue, it's price rigging by Big Pharma/FDA/Insurance Companies. Diabetes Type 1 is a genetic disease, not caused by overeating, but many people think that all diabetes is self-caused and so seem to think the patients brought it all on themselves. Regardless making a profit off sick people is a sick system that hurts the poor and will kill them. It's cheaper to give them the insulin than it is to pay for the amputations they will require if you don't.

  3. I wrote about my personal experience with this last January when pricing changed. I never could get a straight answer.

  4. My grandmother gets her insulin imported in bulk from Canada. It's a bit terrifying that even with the costs of internationally shipping delicate goods in refrigerated packaging, this is massively cheaper than buying from US suppliers.
    Part of the problem is the monopoly held in the US by human insulin suppliers. In Canada, both insulin extracted from pigs and human insulin produced by genetically modified yeast are avaliable. In the US, all animal insulin producers went out of business or switched to human insulin decades ago - as far as I can tell, this was as much because of marketing as anything. Some people have allergic reactions to pig or cow insulin, some people react to human insulin in ways that make blood sugar hard to control. Thorough clinical trials have shown no significant difference between the two. However, there was a huge marketing push towards human insulin being "better" and "safer." The fact that only human insulin producers (in fact, almost a single company) are still in the US market allowed them to push prices higher and higher.
    However, I don't see that as an argument for a less-regulated healthcare market that would favor "small upstarts." A market where regulations are slack enough to allow a monopoly to form is underregulated, not over. The fact that an advertising push with no backing in actual science could change the market so deeply is terrifying - it should be the job of regulatory organizations who know the science to prevent this kind of myth. And in the case of life-saving drugs, the principle of free markets adapting to the needs of consumers is fundamentally flawed. You're not shopping savvily for price cuts and bargains, you're trying not to die. If only one company makes the drug you need, you're in no position to do anything about it.






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