Time to Address the High Cost of Insulin in the United States and Other Countries

Submitted by Patricio V. Marquez on Mon, 02/15/2021 - 02:15 PM

Time to Address the High Cost of Insulin in the United States and Other Countries

Canadian $100 note, back side, features the discovery of insulin to treat diabetes.

 

The Biden Administration recently announced that it is delaying until March 22, 2021 the application of the former administration’s drug regulation adopted in December 2020, that requires community health centers to pass on all their insulin and epinephrine discount savings to patients. 

It has to be clear that this regulatory pause is a common tradition among incoming presidents to ensure that the unenacted policies from the prior administration align with those of the new one. Also, as highlighted by the US National Association of Community Health Centersthe overall prices of insulin (injections of insulin can help treat both types of diabetes acting as a replacement for or supplement to a body’s insulin to control blood glucose levels), and EpiPens (epinephrine auto-injector used to deliver medication quickly and effectively to someone who’s experiencing anaphylaxis, a severe and potentially life threatening consequence of an allergic reaction)across the country are not affected by the previous administration’s regulation or the recent action by the new US administration.  That is, the regulation only affects medications purchased through a drug discount program at the health centers.  These federally supported community health centers,  that began providing services  in 1965 and receive funding in multiple ways, serve one in 11 Americans across the country, who often are under-insured and uninsured patients and lack the means to get medical care.  In the case of drugs, the health centers offer sliding fee discounts for all persons with incomes below 200% of the federal poverty level.

But this small controversy creates an opportune moment to look at the high cost of drugs in the United States and other countries and hopefully creates momentum for the pursuit of more impactful and lasting options that benefit the entire population.  This issue is personal for me, as one of my children was diagnosed with Type-1 diabetes some years ago and another relies on epinephrine for allergic reactions.

The Problem

Even though being enrolled in a good health insurance plan helps mitigate the financial burden of insulin and related supplies needed to manage diabetes, such as blood glucose meters, lancets, test strips, and glucose tablets, many individuals and families across the country face the dire reality of pre-existing clauses in health insurance plans that do not cover a medical condition that started before a person's health insurance benefits went into effect, as well as high deductibles, co-payments, and lifetime limitations on services and drug coverage.  This reality is more acute in countries where universal health coverage is a distant social goal.

In the case of insulin, we face an historical irony, which I would say is morally wrong.  Almost 100 years after its discovery in Canada (a feat commemorated on the back side its $100 bill as shown in the above picture), high-cost insulin is inaccessible to thousands of Americans and people in many countries in the world, despite the fact that Frederick Banting and John Macleod, who were awarded the 1923 Nobel Prize in Medicine for the discovery of insulin, sold the patent to the University of Toronto for only $1 each because they felt that insulin belonged to the world and should not be for their enrichment.  

The price of insulin has increased substantially across the world in recent years, particularly in the United States, where my son lives.  As documented in a recent New England Journal of Medicine article, the current price of 100 units of short-acting insulin for adults without insurance is about US$18, and the usual dose for regular insulin is 0.5 to 1.0 units per kilogram per day (usually given before meals). Thus, for a person with Type 1 diabetes who weighs 70 kg and is taking a dose of 1 unit per kilogram per day, 100 units will last less than 2 days.   Most adults taking short-acting insulin also require either intermediate- or long-acting insulin, the latter of which is also quite costly. 

While in other rich countries such as Germany, England, and Canada, governments actively negotiate prescription drug prices, helping hold consumer costs in check, the U.S. has no such system in place.  In Germany, for example, an independent panel that advises the government assesses the effectiveness of new drugs and whether their treatment value is commensurate with the manufacturer’s proposed price, and drugs serving a similar purpose or delivering the same benefit get grouped together. The panel sets a maximum price that insurers will pay for these medications―a practice known as “reference pricing.” Since most German residents are on public health insurance plans, and these plans are tightly regulated, negotiating lower prices on prescription medications with drug manufacturers allows these plans to compete for affiliates.  In England, the government also has an agency that negotiates directly with pharmaceutical companies, sets a maximum price it will pay for a drug, and if companies do not agree, they simply lose out on the entire market, or they drive down the price of drugs to participate in government contracts.  By having adopted this “reference pricing” provision, insulin costs less in Germany and the UK than in the United States. 

Besides adding to the financial burden of out-of-pocket drug expenditures, the high cost of insulin in the United States usually results in people who need to take this medication not taking it as prescribed, increasing the risk of developing health conditions such as vision and dental problems, neuropathy, cardiovascular diseases, and kidney disease.  A CDC assessment shows that compared with those without diabetes, adults with diagnosed diabetes experience higher out-of-pocket costs for prescription medications, and adults under age 65 with diagnosed diabetes, particularly the uninsured, were more likely than those aged 65 and over to not take their medication as prescribed (17.9% and 7.2%, respectively) and to ask their doctor for a lower-cost medication (26.3% and 21.9%, respectively).

A 2016 Insulin & Diabetes Supply Survey showed that the experience of the United States is not different from many other countries, where living with diabetes is a struggle for many people diagnosed with this condition, as well as a major financial burden. The survey documents that to cover the costs associated with diabetes management, people around the world pay anything from 0% to 118% of their monthly income.  For example, in countries such as Ghana, Brazil, India, Egypt, United States, and Germany, the out-of-pocket cost of managing diabetes as a share of monthly income ranged from 118.7%, 82.7%, 79.3%, 59.3%, 7.6%, to 0.3%, respectively. While the average out of pocket cost in $/ml of rapid-acting insulin (Humalog) and long-acting insulin (Lantus) in the United States is $13.47 and $$13.75, respectively, in Canada is significantly lower at $3.16 and $5.87, respectively.  Additionally, in many countries, the price of related supplies, such as an insulin pump, is out of reach for most people.

What to Do?

As some critics of the previous US administration’s rule have observed, by targeting the centers providing insulin and other essential drugs to those without insurance or the means to get the care instead of big pharmaceutical companies, it risks making things worse for patients as it would undermine the financial solvency of community health centers. 

Let’s be clear: the high cost of pharmaceuticals, including insulin, in the US and other countries make these life-saving drugs too expensive for most people, especially for low-income populations who are the most medically underserved. This problem will not be solved with limited measures.

Rather, what is required to address the insulin unaffordability crisis in the Unites States, as well as in other countries, is a significant and far-reaching improvement or replacement of lax regulatory frameworks that enable price gouging.

To begin with, the mandatory provision of an essential outpatient drug benefit package for priority, high-burden diseases, such as Type 1 diabetes, under publicly funded arrangements or health insurance plans, is a critical measure to guarantee their timely access and affordability for the population in need. In the State of Colorado, for example, a new law is capping the cost of insulin by mandating that people with diabetes will not have to spend more than US$100 per monthly copay for the drug, regardless of how much they use. 

An additional measure to consider is the adoption of reference pricing provisions, as done already in different countries, that would help governments and insurance companies negotiate drug prices with the pharmaceutical industry in order to lower costs for everyone. 

And, more importantly, changes in patents and intellectual property laws are needed to foster competition and bring down prices in the market by incentivizing the manufacture of generic drugs.    The latter is a critical policy option as there are currently no true generic options available (though there are several rebranded and biosimilar insulins). As noted in a recent article, this situation has resulted in part because companies have made incremental improvements to insulin products, which has allowed them to keep their formulations under patent, and because older insulin formulations are out of fashion. However, there is the need to also address the issue of secondary patents on non-active ingredients in insulins or on associated devices (such as insulin delivery pens), which may deter potential generic manufacturers.

While timely access to medications such as insulin is critical to manage Type-1 diabetes, equally important is the promotion of health literacy among affected people.  As I have observed with my son, the time invested to develop diabetes literacy has put him in the “driver’s seat” for managing well his disease by rigorously monitoring his glucose level, administering insulin before or after meals, learning about different types of insulin available for the treatment of diabetes, as well as adhering to a daily nutritional regime rich in proteins and vegetables, with reduced or no carbohydrates from processed foods, and keeping a disciplined daily physical activity routine.  Public health communication, especially in the time of COVID-19, is more important than ever and demands renewed investment in addition to the other measures described above.

Would the global health innovation system be affected by these measures as some critics’ attest?  The answer is no. As argued in a recent report, what is needed is a rethinking of the pharmaceutical system to put patients and public health first.  Well structured, win-win public-private collaborations could help pave the way forward as shown in the case of the safe and effective COVID-19 vaccines, which were created and tested in record time, with public investment proving crucial.  But the allocation of public investment should be a condition to allow governments to negotiate better deals as the main investors in new treatments that should be accessible and affordable to populations and health systems across the world, instead of rewards being disproportionately reaped by private pharmaceutical companies.