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Skyrocketing Insulin Cost: Congressional Diabetes Caucus Highlights Need and Ways to Bring Prices Down

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Washington, D.C., November 1, 2018 | comments

The skyrocketing cost of insulin must be brought under control for the sake of millions of Americans who depend on it, and the U.S. government has tools at its disposal to help, the bipartisan Congressional Diabetes Caucus concluded in a report released today.

Caucus co-chairs Tom Reed (R-NY) and Diana DeGette (D-CO) completed the report after an inquiry lasting more than a year involving consultations with patients, health care providers, insulin makers, wholesalers, pharmacies, pharmacy benefit managers (PBMs) and health insurers.

“We care about the 7.5 million Americans who rely on insulin to manage their blood sugar levels and prevent debilitating complications every day,” Reed and DeGette said. “Many cannot live without it, but countless patients struggle to afford it. As their out-of-pocket costs continue to rise, the current system is unfairly putting insulin out of reach – placing millions of lives at risk.”

The price of insulin has doubled since 2012, after nearly tripling in the previous 10 years. A patient’s out-of-pocket insulin cost can exceed $300 per vial; some regularly use two or more vials per month. Patients have resorted to skipping doses, which can have dangerous, even fatal consequences.

In conducting their inquiry, Reed and DeGette found the insulin drug market is especially complicated due to interconnected issues, marked by an influx of upward price pressures with limited counterbalancing downward market forces.  

The insulin market involves drug makers, wholesalers, pharmacies, PBMs and insurers. The drug’s list price is based on factors including manufacturers’ operational expenses, research and development costs, marketing expenses, etc. From there, the cost is affected by intermediaries in the supply chain, and there are incentives which drive up the price further.

At the same time, relatively few downward market forces exist to keep the price under control: In the United States, insulin is manufactured by only three companies, while three large wholesalers control about 85 percent of the drug distribution market. 

In their report, Reed and DeGette make 11 policy recommendations which include actions to increase the transparency of pricing, foster market competition, modify formulary usage, and address patent reform.  
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