Industry Responding to Increasing Public Pressure to Address Rising Cost of Life-Saving Insulin

insulin costs continue to risk each year, leading 1 in 4 Americans to cut back on its use in order to lower costs

Industry Responding to Increasing Public Pressure to Address Rising Cost of Life-Saving Insulin
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April 3, 2019

If you are one of the millions of Americans who need life-saving insulin, you know that its cost has increased a lot over recent years. Responding to public pressure, the industry is taking steps to lower these rising costs. Insulin is used to treat type diabetes, a condition where the body fails to regulate its own insulin supply and that costs about $330 billion in health care expenditures annually.

FDA Hopes To Increase Competition

Focusing its efforts on competition, which is shown to reduce the cost of prescription medications, the Food and Drug Administration (FDA) hopes to drive down the cost of insulin for American consumers.  Insulin products have historically been regulated as drugs under the Federal Food, Drug, and Cosmetic Act, not as the biologic it is.  Insulin was the first biologic marketed, introduced in 1982.

The FDA wants to transition insulin to biologics under the Public Health Service Act in 2020, which can result in an abbreviated approval pathway that can speed the introduction of biosimilar or interchangeable products to  the market.  This can benefit consumers by increasing competition, thereby lowering the cost.  It can also provide a cheaper alternative for consumers at the pharmacy counter.

Biologics are manufactured in a living system, such as a plant cell, animal cell, or microorganism as opposed to a drug, which is manufactured by combining different chemical ingredients.  This translates into higher costs for biologics, which must have extremely tight manufacturing controls from start to finish to ensure the finished product is as intended. This is one of the reasons insulin costs are so high, but consumers are not happy with the costs increasing every year.

Average and Rising Costs

Depending upon an individual's health insurance plan, insulin can cost about $40 on average per month. Some patients pay an average of $100 or more per month, and that's with insurance. Without insurance, some people pay $200 per month to more than $1000 per month for insulin. The rising cost of this medication puts consumers in a bind, many of whom skip doses and ration their supplies.  To complicate matters, insulin manufacturers are increasing list prices for insulin each year.  Eli Lilly introduced its fast-acting insulin product called Humalog in 1996 for about $21 per vial.  In 2009 the cost was about $100.  In 2018, the cost was about $275.  Responding to pressure, Eli Lilly recently introduced a generic version of Humalog for about $137, which many have called a public relations move.

CIGNA Introducing new insurance plan

The insurance company CIGNA and its drug benefit arm, Express Scripts, are also working to reduce the cost of insulin for patients. Responding to public pressure about the cost of insulin, the company hopes to reduce the monthly cost of insulin to about $25 for most patients with the launch of an insurance plan that will cap insulin costs. The company hopes that the lower costs will help about 700,000 consumers, many of whom ration the drug instead use it regularly, risking life-threatening consequences. To qualify for this plan, its patients must have out-of-pocket insulin costs that are higher than $25 per month and must also participate in non-government funded pharmacy plans managed by Express Scripts.

High Deductible Health Plans and Insulin not fitting in

The current health insurance system is unfair to consumers. Most insurance plans now have very large deductibles, which is the amount patients must pay before insurance kicks in. So for expensive drugs like insulin, some patients may have to pay hundreds of dollars at the beginning of the year for a month's supply. Recent changes to the Affordable Care Act complicated matters, which required pharmaceuticals and other medical costs to be put under one deductible. The law then allowed certain drugs to be covered under co-payments, not deductibles, if they were preventive in nature. But it was never clear if insulin counts as preventative care.

Patients risk death by cutting back to save money

Patients cut back on insulin use when faced with large out-of-pocket costs for the medication. These patients may, on average, use only 10 months worth of insulin in a 12 month period. This is due to switching to other plans, getting new jobs, or starting other medications in the middle of the year. But those patients who have high deductible plans, which require large upfront expenditures before insurance kicks in, use even less insulin.

About 6 million Americans depend on life-saving insulin every day, according to the American diabetes Association. About one in four people who have diabetes and use insulin cut back on the use of the drug because of rising costs.