Soaring insulin prices have patients terrified and pharmacists scrambling
Current pricing and rebate system encourages high list prices
The numbers are staggering. According to the American Diabetes Association (ADA), 7.5 million Americans rely on insulin—including 1.5 million with type 1 diabetes—but the average cost of insulin tripled between 2002 and 2013 and continues to surge. A June 2018 study by UpWell Health that 45% of Americans with diabetes sometimes forgo care due to cost. Manufacturers offer coupons, but insured patients aren’t eligible for them, and busy pharmacies might not have time to seek them out. How can we control the insulin price crisis?
“The insulin supply chain is complex, and while it is unclear precisely how the dollars flow through the chain, it is clear the current pricing and rebate system encourages high list prices,” said William T. Cefalu, MD, chief scientific, medical, and mission officer at ADA. “Unfortunately, people with diabetes are harmed with high list prices and high out-of-pocket costs.”
In May 2018, ADA a white paper, Insulin Access and Affordability Working Group: Conclusions and Recommendations, the product of meetings with representatives of pharmaceutical manufacturers, wholesalers, PBMs, pharmacies, pharmacists, distributors, health plans, employers, and people with diabetes and their caregivers. The major finding was that “additional transparency is needed throughout the supply chain to identify changes that will lead to long-term improvement in insulin affordability,” Cefalu said.
Meanwhile, insulin utilization has trended toward the higher-priced human analog insulins, although even the price of human insulins has increased. Still, the white paper stated, “human insulins are available at the pharmacy for $25 to $100 per vial compared with human insulin analogs at $174 to $300 per vial.”
“Providers, pharmacies, and health plans should discuss the cost of insulin preparations with people with diabetes to help them understand the advantages, disadvantages, and financial implications of potential insulin preparations,” Cefalu said. “This could mean that human insulin may be appropriate for some appropriately selected patients instead of analog insulin; however, this must be considered based on each individual’s diabetes needs, in consultation with the physician and based on current clinical evidence.”
The white paper also recommended that list price for insulins should more closely reflect net price, and rebates based on list price should be minimized. Until the system changes, the white paper stated that PBMs and payers should use rebates to lower the costs of insulin for people with diabetes at the point of sale.
“The conclusions and recommendations of the working group are only a starting point. Beginning with increased transparency within the insulin supply chain, every stakeholder must work together toward a common goal—[to] ensure affordable insulin is within reach for all who need it,” Cefalu said.
More than 20 states are considering legislation targeting high insulin prices.
Nevada Sen. Yvanna Cancela sponsored one of the strictest drug pricing transparency laws in the country—despite fierce opposition from lobbyists, who complained that the bill singles out manufacturers without enough scrutiny on PBMs. The bill was initially vetoed by Gov. Brian Sandoval but was signed when it was packaged with another bill that does call for more PBM transparency.
Cancela’s bill requires diabetes drug companies to disclose information about the costs of manufacturing and marketing—as well as the rebates they provide—if the price of their products has increased at a rate faster than inflation as measured by the medical consumer price index. The other piece of the new law requires PBMs to disclose the rebates they negotiate and which rebates they keep for themselves.
“Policy makers need unbiased data to make decisions that benefit patients. Without transparency, it’s difficult to understand just how drug pricing works,” Cancela said. “This legislation will equip policy makers and patients with the necessary data to ask questions and understand drug costs.”
Cancela believes the new law is about more than just affordability. “I’m hopeful that this information will help patients be better advocates for themselves with manufacturers and policy makers,” she said.
ADA’s Cefalu testified before the U.S. Senate Special Committee on Aging on May 8, 2018. “The Special Committee was concerned by the complexity of the supply chain and vowed to address the issue,” Cefalu said of his testimony. “We continue to have substantive conversations with congressional leaders as well as state lawmakers and look forward to working together to develop viable, long-term solutions.”
For the full article, please visit for the August 2018 issue of Pharmacy Today.