TrialSite News has covered the insulin pricing dynamics of late with interest. We noted that recent research revealed that the usual competition and price correlation in standard economics wasn’t playing out in the real world of drug pricing. The insulin market was a prime example where a few large competitors seemed to bid up the price over the past five years despite the markets’ pleading demands for lower prices.
Now the firms are reacting more rationally to market forces (albeit with some government saber-rattling and a congressional inquiry into insulin prices).
What Was Happening?
It would appear that insulin-producing firms were acting in concert to raise prices—despite intense competition amongst each other. The cost of treating type 1 diabetes doubled over a five-year period—while wages and inflation stay fairly flat. In the process real lives were in jeopardy as some diabetes who were tight on funds found themselves rationing their insulin—placing themselves in great danger. Court cases were commenced as Novo Nordisk, Eli Lilly and Sanofi are presently challenged in court for price gouging. A combination of public outcry, court cases and the commercial firms’ recognition that real public health concerns were the result prodded them to act. The Trump Administration has been critical of drug firm pricing—Trump declaring the companies are “getting away with murder.”
Now the insulin producers are adjusting their price points in the hopes of reducing the scrutiny and perhaps preparing to defend themselves in court cases.
For example, about one million patients use Novo Nordisk’s insulin drug Novolog. The Danish drug maker will offer a generic version of this popular drug and reducing the price tag by 50% it recently reported. The list price for one vial of Novolog is $144.68. Novo Nordisk was the last to move as France-based Sanofi and Eli Lilly have already cut pricing.
The company is offering a $99 cash card program in January 2020. Patients will be able to buy three vials or two packs of pens of Novo’s for a flat cost of $99 representing what amounts to a month supply for most diabetics cutting the annual price tag to $1,188.
Back in April, reported Medical Dialogue, France-based Sanofi cut their insulin products for diabetes to $99 per month for uninsured and those who must pay cash.
In April U.S. Congress invited the three insulin makers to pay a visit to Capitol Hill. The inquiry, led by U.S. Rep. Diana DeGette (D-CO) was based on a bipartisan report in November, 2018 that contained several policy recommendations for Congress to focus on in trying to combat rising drug prices—including increasing competition among drugmakers, a standardized system for consumers to appeal insurers decisions and access to wholesale pricing for consumers for certain drugs. The insulin makers showed up in April and new pricing started in May—a fast response.
State Actions: the Colorado Law
States are trying to take matters into their own hands including establishing monthly drug price caps in their states. For example, a new law in Colorado placed a cap on the price of insulin for insured patients at $100 per month. This has generated a lot of interest in other states. Governor Jared Polis signed HB 1216 in May declaring “The days of insulin price gouging are over in Colorado.”
The new law precludes Medicaid patients or the uninsured. It does contain a provision to support those facing high health insurance deductibles or out-of-pocket costs and face insulin bills that can exceed $1,600 per month reports the Colorado government website.
Shortly thereafter politicians in California, Minnesota, and Pennsylvania started inquiring about the new law.Source: Business Medical Dialogues