Bringing down the cost of insulin

MEGAN BASHAM, HOST: It’s Thursday, the 14th of November, 2019. You’re listening to The World and Everything in It, and we’re glad you are! Good morning, I’m Megan Basham.

MARY REICHARD, HOST: And I’m Mary Reichard. First up, the price of insulin.

A decade ago, the two most popular forms of insulin cost about $100 a vial. Today, the same insulin costs nearly three times as much.  That means some people who need insulin can’t afford it.

BASHAM: For people with diabetes that’s a big problem. Diabetics need insulin to survive. 

Reports of diabetics dying because they can’t afford insulin has lawmakers trying to force drug companies to drop prices.

WORLD Radio’s Leigh Jones reports now on what caused the increase and efforts to roll it back.

LEIGH JONES, REPORTER: Doctors diagnosed Jon Yates with diabetes when he was 16 years old. Right away he discovered that managing his glucose levels could be tricky.

YATES: I became very good at mathematics and learning mental math because there’s a lot of counting involved, looking at carbohydrates and things to that effect to make sure that I’m delivering the right amount of insulin to myself.

After years of doing all that math, Yates had his system down pat. But four years ago he switched insurance companies. And the insulin he’d been using all his life suddenly shot up in price.

YATES: To get NovoLog, I basically would have had to pay for the vast majority of that out of pocket, on my own. And that was something that I wasn’t obviously willing to accept because that becomes quite costly.

To keep using NovoLog, Yates would have had to pay about $2,000 for a 90-day supply. If he switched to Humalog, he would only pay about $90.

Why such a dramatic difference? Negotiated discounts.

Here’s how drug pricing works. Pharmaceutical companies set the list price. Then insurance companies and pharmacy benefit managers negotiate discounts based on how much of a drug they think their customers will buy. The actual cost paid by patients like Jon Yates depends on how good their insurance companies are at negotiating discounts.

AXELSEN: Over time if you look at the net price of insulin, so like the net price after discounts, many have gone down or have gone up far less than what the list price is.

Kirsten Axelsen is a policy analyst and visiting fellow at the American Enterprise Institute. She says that while the discounted price has remained relatively steady, the list price has continued to rise.

AXELSEN: What happens is the drug companies raise the list price then they give the discount back to the health plans to get the formulary access. For the health plans that’s a win because they can use that discount either to reduce the copay on the insulin or to reduce the premium or to reduce the copay of something else. So it gives them maximum flexibility with what to do with that revenue.

That increasing list price spiral isn’t new. But it never used to be a problem.

AXELSEN: Cause it used to be that people rarely ever experienced that list price. Most people had insurance and only the cash payers, but now you have a large number of insured people experiencing that list price of their drug because they have a high deductible or they have co-insurance.

And for many of those people, the list price is unaffordable.

Last month, Congresswoman Diana DeGette of Colorado introduced a bill that would roll back insulin prices to what they were in 2006. It would interrupt the price spiral by ending drug company rebates to insurers. And it would require insurers to fully cover any insulin priced at the 2006 levels.

But Kirsten Axelsen says that might actually raise the price most patients pay.

AXELSEN: If you were to just drop the price of the insulin, you don’t have the ability or the leverage then to negotiate a discount for the lower copay for the patient.

Given the other issues occupying Congress at the moment, DeGette’s bill seems unlikely to get passed any time soon. Other bills designed to reform drug pricing across the board will probably also remain sidelined until after the 2020 election.

Until then, doctors and pharmacists are coming up with creative solutions to help the patients who need it.

Andrew Straw is a pharmacist and pharmacology professor at Cedarville University. He says 85 to 90 percent of the patients he works with have no trouble getting their medication at an affordable cost. For the others, he has a checklist of options.

As a last resort, he recommends switching to older, less expensive forms of insulin.

STRAW: But they do have different properties so they have different durations. They require different administration timings and just a little bit different approach in their administration, and then when you’re eating based on that. So it’s different than our ultra rapid acting in our long acting that we use for a lot of patients.

And making a switch like that isn’t without challenges.

When Jon Yates moved from NovoLog to Humalog, he had to completely rethink his mealtime math.

YATES: I had to basically be much more conscious upfront about the type of food that I was about to eat determine what that was and then basically socialize for about five minutes before I actually began to consume my food. So there was definitely some struggles and transitions that I had to go through in that process.

Reporting for WORLD Radio, I’m Leigh Jones.

(Photo/Creative Commons)

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.

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