Insulin prices demonstrate pharma’s greed

WHAT’S HAPPENING: In the Build Back Better bill, Democrats are actually proposing limiting insulin prices to $35 a month but Republicans can’t have any of that. PhRMA spent pharma’s money well and bought some politicians while people who need insulin are suffering.

Millions of Americans use insulin for diabetes, and the drug can cost as much as $1,000 a month. But Republicans are considering mounting a procedural challenge to the bill aimed at the insulin measure and others on health care. In short, Republicans can’t let Democrats do something popular, no matter how many people it might help, if it would mean the public might appreciate it.

According to the Mayo Clinic “The 3 main reasons cited by pharmaceutical companies for the high cost of new prescription drugs do not apply to insulin. First, the “high cost of development” is not relevant for a drug that is more than 100 years old; even the latest and most commonly used analog insulin products are all over 20 years old.

Second, the pricing is not the product of a free market economy. Free market forces are clearly not operational; there is limited competition on price, the person who needs the product is not in a position to negotiate the price, and there is no relationship of price increases over time compared with overall market inflation. The price of insulin has risen inexplicably over the past 20 years at a rate far higher than the rate of inflation.9 One vial of Humalog (insulin lispro), which used to cost $21 in 1999, costs $332 in 2019, reflecting a price increase of more than 1000%. 

In contrast, insulin prices in other developed countries, including neighboring Canada, have stayed the same. Insulin pricing in the United States is the consequence of the exact opposite of a free market: extended monopoly on a lifesaving product in which prices can be increased at will, taking advantage of regulatory and legal restrictions on market entry and importation. Third, the arguments that high costs are needed for continued innovation and that attempts to lower or regulate the prices will hamper innovation are not valid excuses. There is limited innovation when it comes to insulin; the more pressing need is affordability.

The list price of insulin has increased between 300% to 500%. That’s because there are a limited number of manufactures in the U.S..Several states have put caps on insulin co-pays that range from $25 to $100 for a monthly supply. And now the Build Back Better bill, passed by the House, would cap the cost of insulin at $35 a month.

Pharma companies are raking in the cash from the sales of insulin and the Build Back Better Bill would address that with a cap on costs but paid for politicians are not about to let that happen.

For years, prescription drug companies have aggressively raised prices on existing drugs and set higher launch prices for new drugs, all while reaping vast profits from American patients and taxpayers. In the five-yearperiodfrom2016to2020, pharmaceutical companies raised the prices of branded prescription drugs by 36%—almost four times the rate of inflation during that period. 1 From 2012 to 2017, drug companies raised prices for the 20 most commonly prescribed brand-name drugs in the Medicare Part D program, which provides prescription drug benefits to seniors, by more than 12% annually—approximately ten times the average annual rate of inflation during those years. Patients in the United States pay more than twice as much for their prescription drugs as patients in 32 other developed nations.

It’s time to admit that pharma is out of control.