EXPLAINER: Why is insulin so expensive and difficult to limit? | Healthy Aging

By AMANDA SEITZ – Associated Press

WASHINGTON (AP) – Curbing soaring insulin prices has been elusive in Congress so far, though Democrats say they will try again — as part of their economic package focused on health and climate.

The price of the 100-year-old drug has more than tripled over the past two decades, forcing the country’s diabetics to pay thousands of dollars a year for the life-saving drug. Democrats are considering capping the cost of this drug, at least for some, though it’s unclear what the final proposal will be and how many insulin users will see a price reduction.

Here’s a look at how insulin got so expensive and why bringing the drug’s price down is so difficult.

HOW MANY PEOPLE IN THE US USE INSULIN AND FOR WHAT?

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Around 8.4 million Americans use insulin, according to the American Diabetes Association. Not every diabetic needs insulin, but for those who have diabetes, it is an important medication. For more than 1 million of these people with type 1 diabetes, regular access to medication is a necessity and will die without it.

“People need insulin, that’s not an option, and nobody should have to choose between life support drugs or food and rent,” said Dr. Robert Gabbay, Scientific and Medical Director of the American Diabetes Association.

Insulin also helps control glucose levels in people with other forms of diabetes. Some insulin users have rationed the drug because of its cost, risking numerous health complications as a result.

HOW EXPENSIVE IS INSULIN?

Some privately insured people pay hundreds of dollars a month for the drug. For most Medicare beneficiaries, the average out-of-pocket cost per insulin prescription in 2020 was $54 — up nearly 40% since 2007, according to a study published last month by the Kaiser Family Foundation. Others live in one of 22 states that limit the co-payment from $25 to $100 for a 30-day supply.

The cost has prompted some to use less insulin than their doctor prescribes or delay paying for other medical care.

WHY IS INSULIN SO EXPENSIVE?

Only three manufacturers — Eli Lilly, Novo Nordisk, and Sanofi — make insulin, allowing those companies to control much of the market.

“They have historically raised their list prices for their respective products in step with each other,” said Dr. Jing Luo, Professor of Medicine at the University of Pittsburgh. “There wasn’t much pricing pressure.”

And making a generic insulin has not been easy, as new manufacturers have to overcome regulatory hurdles and questions about how to categorize a generic, Luo added. A generic insulin is slated to hit the market in 2024 for no more than $30 a vial, which could bring the price down a bit.

HOW DO DEMOCRATS PLAN TO CAP THE PRICE OF INSULIN?

Senate Majority Leader Chuck Schumer has said language capping the price of insulin will be added to the economic bill, but it’s not clear what that price point will be and who all will be protected by that price cap.

Democrats had proposed a $35 monthly cap for those who receive the drug through Medicare or private insurers as part of a larger package derailed in the Senate. But it was left out of the downsized package, which is now headed for a congressional vote.

WHY IS THE COST OF INSULIN SO HARD TO COVER?

Capping the price of insulin will be very expensive.

Insulin is not only becoming more expensive, but the number of people using it is also increasing.

A bipartisan law to cap insulin prices proposed earlier this year could cost about $23 billion over the next decade, the Congressional Budget Office estimates. While the bill would reduce insulin costs for many consumers, it would increase state costs and premiums charged by Medicare and private insurers, according to the bureau’s analysis.

And that’s one of the reasons price caps can be controversial.

“If your insurance company voluntarily says no one who buys insulin in our plan has to pay more than $25, the question is who pays the balance?” Luo said. “That then means their costs are going to go up, which means they’re going to increase premiums for everyone.”

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission.

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