Juvenile diabetes is an autoimmune disorder that affects over 1.25 million Americans. Also known as Type 1 diabetes, it occurs when the body stops producing the blood-glucose regulating hormone insulin; thus, juvenile diabetics must receive consistent insulin therapy to survive. Although insulin was discovered in the 1920s, prices for the drug are astronomical by today’s standards.
As a juvenile diabetic, my health and longevity depend on a consistent and affordable supply of insulin. Federal lawmakers must address the rising cost of insulin, for chronically-ill individuals are unable to afford their life-sustaining medications. Oftentimes, individuals ration needed medications like insulin because of high costs, risking serious health consequences and even death. Individuals should not be forced to forego or sacrifice needed medication because of associated costs.
The price of insulin has soared and show no signs of stopping. The price of insulin has doubled since 2012. Eli Lilly, the manufacture of Humalog, announced it will produce and sell a generic, half-price version of the original drug; yet, the generic will still cost $137.35 and be unaffordable for many patients. In fact, there are currently no generic biosimilars for insulin on the market. Lack of competition from generics is one of the biggest reasons manufacturers continue to raise the price of insulin. How much longer do we have to wait to provide relief to patients and families who are burdened by high costs?
Recently, NCHC’s CEO and President, John Rother, published a blog post highlighting the variety of drug-pricing “sins”. His solutions represent viable options in the battle to lower insulin prices, and are similar to the bipartisan recommendations made by the Co-Chairs of the Congressional Diabetes Caucus, Rep. Diana DeGette (D-CO) and Rep. Tom Reed (R-NY).
At NCHC, we see three policies that could significantly lower the price of insulin: improve transparency limit compounded price increases, and accelerate generic drug approvals.
- Improve transparency and pass discounts to patients: The supply chain through which drugs travel from manufacturers to pharmacy counters is complex and opaque. It encourages ever-higher prices as consolidation and rebate systems limit supply and hide the true prices paid. Manufacturers should be required to disclose more information about effectiveness, and all entities in the supply chain should report prices paid, discounts, and rebates received. Discounts and rebates should be shared with patients. Additionally, transparency would help patients understand their disease and the therapeutic effects of different insulin types, and make more informed choices. On the state-level, policies have emerged that encourage transparency in the insulin marketplace. Congress should enable state-level initiatives or establish federal standards and disclosure requirements across the supply chain.
- Limit compound price increases: Drug companies can and do hike prices at any time, even multiple times per year. Reforms should be enacted to hinder price increases that are not the result of higher input costs or improved effectiveness. If prices of existing therapies like insulin increase at unjustified rates, Medicare should be permitted to enter direct long-term contracts, using a tool such as arbitration, to limit price increases.
- Promote generic drug development and curb patent abuses: Despite almost 100 years since the development of the first insulin, manufacturers today are granted monopolies of twelve years protecting their proprietary insulin formulas. This is too long, and Congress should revisit this length of exclusivity. Additional hurdles face manufacturers of generic insulin, including litigation from brand patent owners, and state laws that limit pharmacist substitution of generic biologics. The generic marketplace for insulin is in its infancy in the U.S., and while the FDA has begun to approve biosimilars, Congress should give the FDA more authority and funding to allow generic approval of older, off-patent versions of insulin, as well as demanding that insulin makers meet a high bar of improved effectiveness to win additional exclusivity for new formulations. Stronger solutions, such as the Medicare Negotiation and Competitive Licensing Act, would enable Medicare to negotiate drug prices directly with pharmaceutical companies. If the manufacturer and Medicare cannot agree, Medicare would have the ability to rescind the company’s patent and issue it to a generic brand.
More aggressive action must be taken to promote generic drug development, particularly for biosimilars such as insulin. Without federal intervention and oversight, pharmaceutical companies will continue to increase the costs of pertinent drugs, fueling health care inflation and endangering patient access and health. Juvenile diabetics, along with approximately 7.5 million additional insulin-dependent people with diabetes, will continue to be at high risk of harm.