Why is insulin so expensive and difficult to capture?

Washington (AP) — Curbing rising insulin prices has so far been elusive in Congress, though Democrats say they will try again — as part of their economic package focused on health and climate.

The price of the 100-year-old drug has more than tripled in the past two decades, forcing the country’s diabetics to pay thousands of dollars a year for the life-saving medication. Democrats are considering cutting the cost of that drug for at least some, though it’s unclear what the final proposal will look like and how much insulin users will get a price cut.

Here’s a look at how insulin got so expensive and why it’s so hard to lower the price of the drug.

HOW MANY PEOPLE IN THE US USE INSULIN AND FOR WHAT?

About 8.4 million Americans use insulin, according to the American Diabetes Association. Not everyone with diabetes needs insulin, but for those who do, it’s an important drug. For more than 1 million of those people with type 1 diabetes, regular access to the medication is a necessity and will die without it.

“People need insulin, it’s not an option and no one should have to choose between life-prolonging medication or food and rent,” said Dr. Robert Gabbay, chief scientific and medical officer of the American Diabetes Association.

Insulin also helps control glucose levels in patients with other types of diabetes. Some insulin users have rationed the drug because of its cost, putting it at risk for numerous health complications.

HOW EXPENSIVE IS INSULIN?

The price varies.

Some people with private insurance pay hundreds of dollars monthly for the drug. For most Medicare beneficiaries, the average out-of-pocket cost per insulin prescription was $54 in 2020 — an increase of nearly 40% since 2007, a study published last month found by the Kaiser Family Foundation. Others live in one of the 22 states where the copay for a 30-day delivery is capped between $25 and $100.

The cost has led some to take less insulin than their doctor prescribes or delay paying for other medical care.

WHY IS INSULIN SO EXPENSIVE?

Only three manufacturers – Eli Lilly, Novo Nordisk and Sanofi – produce insulin, allowing these companies to control much of the market.

“They have in the past increased their list prices for their respective products in step,” says Dr. Jing Luo, a professor of medicine at the University of Pittsburgh. “There hasn’t been a lot of price pressure.”

And creating a generic drug for insulin hasn’t been easy, with new manufacturers having to remove regulatory hurdles and questions about how to categorize a generic drug, Luo added. A generic insulin is slated to hit the market in 2024 for no more than $30 per vial, which could cut some of the price.

HOW DO THE DEMOCRATS PLAN TO LIMIT THE PRICE OF INSULIN?

That remains to be seen.

Senate Majority Leader Chuck Schumer has said language will be added that limits the price of insulin the economic accountbut it’s not clear what that price point will be and who will be protected by that price cap.

Democrats had proposed a $35 monthly cap for those who get the drug through Medicare or private insurers as part of a larger package derailed in the Senate. But it was left out of the scaled-down package now headed for a congressional vote.

WHY ARE THE COSTS OF INSULIN SO DIFFICULT TO CAPTURE?

Hedging the price of insulin will be very expensive.

Insulin is not only getting more expensive, but the number of people using it is also increasing.

A bipartisan bill proposed earlier this year that would restrict insulin prices could cost about $23 billion over the next decade, according to Congressional Budget Office estimates. While the bill would lower insulin costs for many consumers, it would drive up government costs and premiums charged by Medicare and private insurers, according to the office’s analysis.

And that’s one of the reasons why price caps can be controversial.

“If your health care provider voluntarily says that no one who buys insulin on our plan has to pay more than $25, the question is who pays the balance of that?” said Luo. “That then means their costs will go up, which means they’ll increase premiums for everyone.”

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