Why is the cost of insulin so high? The drug's hefty price tag, explained
The Build Back Better bill includes a measure to cap insulin co-pays at $35 a month for people with health insurance.
It’s an attempt to control the skyrocketing costs of the drug, which isn’t optional for some 10 million people in the U.S. who need insulin to manage their diabetes. Without it, they would die.
Even with health insurance, some people are paying up to $1,000 a month for insulin.
Dr. Jing Luo says the list price of insulin — the price set by manufacturers but not necessarily what patients or providers pay — has increased between 300% to 500%. That’s because there are a limited number of manufactures in the U.S., he says.
“When you have a setting where there [are] only a few suppliers, but the demand for the medication is quite great,” he says, “it results in a situation where manufacturers can raise their prices without much blowback.”
Insulin is a biologic, “which means it’s made in living organisms using recombinant DNA technology,” Luo says. That makes insulin harder to manufacture than drugs like aspirin or Tylenol.
“The quality assurance has to be very good as well,” he says, “because people are injecting these medicines into their skin and you don’t want people to get infections.”
The Food and Drug Administration has historically regulated insulin until recently, Luo says, but now the drug is on a new pathway geared more toward biologics. That means new generic manufactures will need to show much more evidence that their molecule is similar to the brand name product, he says.
Insulin was discovered in 1921 by men who did not at the time want to profit from the drug. But 100 years later, there isn’t a cheap generic version of the drug available.
Some medications are akin to generics like Biocon and Mylan’s insulin glargine, which is a copycat of Sanofi’s insulin glargine made by generic manufacturers, Luo says.
“The FDA has recently made the determination that Biocon and Mylan’s insulin glargine is essentially equivalent to Sanofi’s glargine product,” he says. “And so hopefully that will drive down the price a little bit, but it’s a little bit early to make that determination.”
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.
Co-pay caps are effective, but there are some critiques such as whether the cap applies to all the insulin a person may need in a month or just for a 30 day supply, Luo says.
“There are millions of Americans who might use two different insulin products,” he says, “which means that there’s a possibility that rather than paying a $35 co-pay, they’re paying it twice every 30 days.”
Capping out of payment pockets benefits individual patients, he says, but health insurance provers might end up paying more for every insulin script that’s fulfilled — which could raise monthly premiums.
After years of “screaming” about rising insulin prices, Luo says he’s finally seeing traction on the issue.
“I’m really excited about these provisions that are in the Build Back Better Act,” he says. “But we’ll have to see if Congress actually gets it together and passes it.”
This article was originally published on WBUR.org.
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