American Diabetes Association Calls Upon Congress to Investigate Escalating Insulin Costs

On November 17th, the American Diabetes Association (ADA)  issued a petition which calls upon congress to investigate the soaring costs of insulin, as well as demands the “insulin supply chain” provide availability to diabetics whose lives depend on accessibility to the medication.

The ADA’s entreaty joins the outcry from diabetic patients and their families, and comes on the heels of a request made by Representative Elijah Cummings and Senator Bernie Sanders that the Federal Trade Commission and Department of Justice look into possible collusion between the trio (Novo Nordisk, Eli Lilly, and Sanofi) of top insulin manufacturers. The cost of insulin per patient has about tripled from 2002-2013 ($231-$736 per patient). In the last two decades, prices have escalated  “450 percent above inflation”.

In Express Script’s 2015 “Drug Spend Report”, spending on Diabetes rose by 14.0%, due to brand inflation and the proliferation of diabetic patients. Medicare spent more on diabetes therapies last year than any other drugs. The report forecasts that spend on insulin will continue to rise because of growing utilization and manufacturers’ increasing prices- the absence of generic insulin making pricing noncompetitive. Pharmaceutical companies patent every tweek they introduce to the medication, making it nearly impossible to create a generic biosimilar competitor. The ADA notes in their resolution “… much of Europe, insulin costs about a sixth of what it does in the United States…”.

The outrage over the uncapped hikes in insulin costs also stems from how prices surge; Eli Lilly, Novo Nordisk, and Sanofi inflate in concert. As one of the brands increases list price, so soon does the other, a behavior known as “shadow pricing”. Novo Nordisk defended the criticism over the ever-growing price tag, specifically that the unit cost doesn’t take into consideration the deep discounts and rebates it shills out to insurance companies. But insurances rebates do nothing for patients who have to reach high deductibles, or Medicare beneficiaries who get stuck in the “donut hole” and have to pay 45% of their medication’s cost, or those who have lapse in coverage.

Insulin manufacturers blame part of the escalation of cost on the advancements to the drugs they’ve bioengineered, the same “advancements” they’ve instituted for branded patent protections. Each iteration is informed by the rising cost of an earlier type, and increasingly expensive. Some experts reject this justification, like Harvard Medical School’s David Nathan, who explained “The truth is they are marginally different, and the clinical benefits of them over the older drugs have been zero.”

The original patent for insulin was sold for $3, a gestural exchange to put insulin in the hands of patients who needed it. If the Affordable Care Act is repealed or deconstructed, the price of insulin will be prohibitive for some diabetics, despite the dire consequences of being without the medication, and no treatment alternatives. The ADA asks Congress “to hold hearings with all entities in the insulin supply chain to identify the reasons for the dramatic increases in insulin prices and to take action to ensure that all people who use insulin have affordable access to the insulin they need.”