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WASHINGTON -- Congress needs to find out what is causing the price of insulin to rise so high, several senators said here Tuesday at a on the subject.
"The manufacturers all claim that they're not benefiting from increases in price, and that their net price is approximately the same, yet we see this enormous tripling ... in the cost of insulin," said committee chairman Susan Collins (R-Maine). "So what's going on here? Who's making the money that's causing these enormous price increases, and are manufacturers correct when they say, 'We're not the ones; our net price is relatively stable over time'?"
In 2013, more was spent on insulin than on all other diabetes medications combined, Collins said in her opening remarks. "In a to be released today, the American Diabetes Association notes that between 2002 and 2013, the average price of insulin nearly tripled."
This occurred with a drug that is nearly 100 years old -- it was discovered in 1921 by three scientists at the University of Toronto, Collins noted. "The scientists sold the patent for one dollar each to the university ... They explicitly stated that profit was not their goal."
But today, those high prices constitute a barrier to treatment for many diabetes patients, she continued. "We have heard stories from people across the country who have had to ration or skip doses all together to make their insulin supply last longer."
(l-r) Sen. Jeanne Shaheen (D-N.H.), Sen. Elizabeth Warren (D-Mass.), Sen. Bob Casey (D-Pa.), Sen. Susan Collins (R-Maine) (Photo credit: Joyce Frieden)
One Family's Surprise Price Hike
One witness at the hearing, Paul Grant of Gray-New Gloucester, Maine, described the process he went through to get insulin for his 13-year-old son, who has had type 1 diabetes for 4 years. Grant noted that his employer doesn't provide health insurance, so he is paying for it himself through the Affordable Care Act's insurance marketplace, "which is very expensive and very complicated."
With his high-deductible plan, Grant spent $2,500 on diabetes supplies for his son in 2017. He had been paying $300 for a 90-day supply of Humalog. "That seemed like a lot ... until this past January when I called to refill [my son's] Humalog prescription -- it was now going to cost $900 for a 90-day supply ... I kind of went into panic mode," he said. He bought a 30-day supply at Walmart for $322 (with a coupon) until he could figure out a plan.
Grant is now buying the insulin online from a Canadian pharmacy, which charges $295 for a 90-day supply, including shipping. For comparison, last week he looked up the price of a 90-day supply of Humalog at Express Scripts. "It would cost me $1,489 with my insurance."
Jeremy Greene, MD, PhD, professor of medicine at Johns Hopkins University in Baltimore and a practicing physician, has heard similar stories. "Over the past decade in my clinic, when I asked patients why they were not taking the insulin as prescribed, I frequently heard that the cost of insulin is prohibitive," he told the committee. Although Greene first thought maybe he was just prescribing an expensive name-brand insulin instead of a cheaper generic one, "I was surprised to hear that generic insulin simply did not exist."
Instead, three pharmaceutical manufacturers -- sanofi-aventis, Novo Nordisk, and Eli Lilly -- control 99% of the nearly $27 billion global insulin market, even though none of the main agents used are protected by patents, said Greene. "A recent survey found that one of four type 1 diabetics admitted to rationing insulin at least once due to cost in the past year ... Humalog was $21 a vial in 1996 and by 2017, it cost $275 for a 1-month supply ... This has real consequences for Americans living with diabetes."
Demystifying the Supply Chain
Collins showed a chart detailing the complex insulin supply chain.
"We really don't understand where the profits lie," responded William Cefalu, MD, chief scientific, medical and mission officer at the American Diabetes Association. "We think there are incentives at every level of the supply chain that encourage high list prices -- from manufacturers to wholesalers to PBMs [pharmacy benefit managers] to health plans. The problem is that none of these profits is going back to the vulnerable patient."
Collins agreed. "We want to deconstruct [the price chain] to figure out who is making how much money and why aren't the discounts negotiated with the manufacturer reaching the patient -- particularly the uninsured patient, and also the patient who has a high deductible, which is so common. It's astonishing that for a drug approaching 100 years old and serving millions of Americans, that we don't see a proliferation of manufacturers, but just three manufacturers. So I am committed to continuing to dig into this issue."
Sen. Elizabeth Warren (D-Mass.) was also puzzled by the lack of competition. "I know biosimilars are more complicated to produce [than regular generics] but that can't be the whole story," she said, noting that the three big insulin manufacturers are . "Drug companies talk a lot about market-based solutions ... but I see the industry throwing sand in the gears of the insulin market ... so they can keep raking in the cash on the backs of patients."
A Role for the Federal Government?
Sen. Catherine Cortez Masto (D-Nev.) said that her state had recently passed legislation requiring more transparency in diabetes drug pricing, although to stop the law from being implemented. She asked the witnesses whether they thought a similar national law would help.
Greene replied that a federal court allowing the state's attorney general to sue if generic drugmakers hike their prices too much. "I think right now the law of the land is suggesting that only the federal government -- only Congress -- can only really take proper actions" to make the prices more transparent, he said.
The committee is going to continue its work to deconstruct the insulin supply chain and its pricing, Collins told ľֱ after the hearing ended. The committee has already made inquiries on the issue to manufacturers, and will also contact PBMs to get their explanation. Eventually, the committee will have the major players testify at a hearing, "but first we must do research to make sure we understand how it works," she said.
The hearing comes a few days before President Trump is expected to give a major speech on lowering the cost of prescription drugs. Trump's Health and Human Services secretary, Alex Azar, was questioned at a hearing prior to his confirmation about why Eli Lilly more than tripled the price of Humalog during the time Azar was a top executive there.
"The current system of pricing insulin and other medicines may meet the needs of many stakeholders, but that system is not working for the patients who have to pay out-of-pocket," he acknowledged. Asked for specific solutions, Azar said he supports increasing generic competition and ending the gaming of patents by drug and device makers.