There are an estimated 30 million Americans with diabetes. For the 6 million of them who rely on insulin, buying that medication is a life or death situation. So when the three major companies that make insulin in the US steadily ratchet up their prices, sometimes in lockstep, diabetic patients with high deductible insurance plans who pay out of pocket for their prescriptions struggle to get the lifesaving medication they need.
Most of the 30 million diabetic Americans have type-2 diabetes, meaning their body doesn’t use insulin the right way and may require a prescription for it if lifestyle and diet changes aren’t enough. The immune systems of the 10 percent of diabetics who are type-1 destroy the cells that release insulin, requiring a lifetime of daily treatment.
All Three Insulin Manufacturers Raise Prices
Since 2004, the manufacturer list price for insulin is up by triple digits. The three major companies that make insulin, Novo Nordisk, Eli Lilly, and Sanofi, have each increased their insulin prices from 380-400 percent, forcing individuals to pay thousands of dollars a year for the medicine they need; and when one company raises prices, others follow.
Sticker Shock for Those Who Pay Out of Pocket
While insulin prices have been steadily going up for years, most patients had a relatively small copay and didn’t see prices increase. Since the Affordable Care Act went into effect, employers seeking to cut labor costs, have steered their workers toward less expensive, high deductible health insurance plans forcing patients to pay out of pocket.
Why Are Insulin Prices Increasing?
Prices are set by pharmaceutical companies at whatever the market will bear. Pharmaceutical companies say that price increases are necessary to support research and development of new medicines, although they say they are working to lower prices by offering copay assistance programs for those without insurance. They say that pharmacy benefit managers (PBMs), such as CVS Caremark, have forced them to raise prices when they negotiate larger rebates for insurance companies (savings that patients paying list price with co-pay don’t see). PBMs say that pharmaceutical companies are responsible for setting prices and creating and managing the rebate program.
Generic Insulin Set to Hit Shelves December 2016
Unlike medications that can be chemically synthesized, until now there has been no generic (“biosimilar”) version of insulin, which is made from biologically altered yeast or bacteria. By December 2016, biosimilar insulin will be available, possibly offering 85 percent savings off brand name insulin.