More "price of insulin" in the news

Treatment Insulin
#1

“Eli Lilly’s revenue boosted by jacking up cost of insulin for diabetics” is the title of a recent Marketwatch story: http://www.marketwatch.com/story/eli-lillys-revenue-boosted-by-higher-drug-prices-for-diabetics-2016-01-28

The company reported the fourth-quarter revenue increase Thursday, with sales of Humalog insulin, a short-acting insulin used by consumers with Type I and Type II diabetes, leading the company’s U.S. pharmaceutical revenues with a 20% increase. That growth was “driven by higher realized prices, and, to a lesser extent, increased volume,” the company said.

Lilly responded with an article in Forbes the next morning: http://www.forbes.com/sites/johnlechleiter/2016/01/28/ninety-year-old-lessons-for-biomedical-progress-today/#c8654d53cf72

Me? I remember being a new college student back in the 80’s when my part-time job easily let me pay for insulin - a whopping $7 a vial back then. No chance of that happening today.

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#2

In Germany there is a federal law that prohibits any prescription medication from ever being marked up more than 2000%. So a vial of insulin that costs, say, $1.50 to make, can never be sold for more than $30 under any circumstances.

In the broken U.S. health care system . . . well, you know the rest.

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#3

I’m hoping somebody takes the plunge to start producing generic analogs… I know it’s complicated, but that’s our only hope for affordable modern insulin I think…

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#4

I had to buy it out-of-pocket a few times back then and it was only a few bucks more than my deductible. No prescription needed either; you only needed one for the hypodermics. Of course it wasn’t the same stuff as now. R or NPH, which you can get a version of pretty cheap from Walmart. If you’re desperate enough to use that stuff. Ugh.

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#5

Interesting that Caitlin Huston, the reporter of the Market story, is a type I diabetic herself and also uses Humalog.

This Eli Lilly spokersperson quote caught my eye:

The company prices its drugs “based on the value” they bring “to patients, providers, payers, and society,” an Eli Lilly spokesperson told MarketWatch in emailed comments.

“This value-based approach considers cost savings that our medicine delivers compared to less effective or less safe treatment alternatives that might be available, as well as no treatment,” the spokesperson said.

It’s clear to me that without competition Lilly and the other members of the exclusive analog insulin makers’ club will continue to abuse its buyers in the market. They will produce the best insulin an oligarchy makes! The “value based pricing” is simply a fig-leaf that management uses to justify their morally reprehensible market action.

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#6

It’s also a function of the third party payer system---- if we were paying out of pocket for these products and one of them had a significantly lower price, we would tend to favor that one. When an insurer is paying for it, we really don’t care what the price is, or don’t care as much as we would if we were paying for it entirely ourselves— so there’s no force moving the price any direction but upwards… This applies across the healthcare field.

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#7

No matter who pays for it, the price will not be competitive when the market is dominated by just a few players. This is a market failure.

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#8

There are only 3 manufacturers of heavy duty pickup trucks available in the USA— they have to price their products competitively or they wouldn’t sell.

I’m sure they’d love it if they were all able to escalate their prices sky high and consumers wouldn’t flinch and would buy the exact same amount and some third party footed the bill… And there was no incentive whatsoever for consumers to look for a better deal or for providers to offer a better deal. But that’s not really a market at all, it’s the total lack thereof.

They’d probably love it even more if they could continue jacking up the price indefinitely of decades-old technology.

Just as a counter example.

#9

Bloomberg says it all here. Total utter anti-competitive, but also “just” legal.
And it’s not just Lilly and Sanofi but also Novo Nordisk after posting gross margin increases to 84.6% and profit increases of 51% last year due to the price increases.

The pricing of insulin isn’t just a US problem, these companies do this across the world as basically they can (while that cost may not be direct to the patient, it will be charged to government and thus through taxation down the line). We “customers” as they like to class us don’t have a choice in not taking it and have to buy from one of these three companies and they know it.

Usually they wheel out the “we need it for research” line, but let’s face it, their shareholder reports show how little they spend on research, and what research they are funding goes into other fields the vast majority of the time so that they can broaden their product lines. But back in 2010 a certain big insulin producer let slip that it hadn’t done any type one research at all for ten years and was only just reopening it now as they could use lots of things discovered elsewhere (remember that 92% of all diabetic and cancer research is funded by government (through universities) and charities).

Quite simply the medical companies should be wearing balaclava’s not medical masks!

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#10

Sam, while the choice of three pickups is all and good, customers have the choice and won’t die a slow painful death if they don’t buy that pickup…they might if they buy that Smartcar and run it into the pickup though, but the three companies are not in a market where the “customer” has to have a product off one of the three.

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#11

You’re right-- this is just another example of how its not a market at all.The only cost saving alternative are R and NPH-- which are inferior products… But if it was a functioning market at all, at some point inferior but less expensive products would start becoming preferable— that’s not happening in this case at all… Just more proof that the game is completely rigged.

The only hope is someone producing generics. Which of course the big 3’s lawyers are fighting tooth and nail to prevent. This would bring prices down to responsible and competitive levels immediately.

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#12

I’m wondering about “barriers to entry”. The higher the prices of HD pickup trucks go the more likely it is that another player who has avoided the market might decide the money is too good and dive in. This tends to constrain prices I think.

I’m still waiting for some other company to start selling the equivalents of Humalog & Novolog. My gut feeling is that there is more holding this back than simply the “science”. Does anyone else know why we only seem to have two choices for fast acting insulins in a vial?

#13

Patents. The companies are a bunch of sneaky sods where they bundle the manufacturing process in with the patents for “new” insulins. Thus why we are due new insulins as the existing ones are coming up and they need to protect the manufacturing processes/filtering systems again.

In our pickup description it would be like forming rubber into circles or the ability to batter metal into shapes. It’s how they’ve managed to keep the patents now for the last 90 years just about.

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#14

There are more “barriers to entry” than just the financial ones. Don’t forget the FDA, which has the enviable ability to, in effect, erect protective tarriffs to protect domestic manufacturers without the bother and inconvenience of waiting for legislation.

#15

to bad, they, don’t, have a law, like that, in the u.s.,.

#16

On top of it not being a market with only three manufactures, they partner up with insurance companies. Like Lilly with Anthem. “I’ll scratch your back if you scratch mine.” If you are a diabetic with Anthem health insurance and your endo thinks a different type of insulin that isn’t produced by Lilly would give you better control, you won’t be able to get it. Because Athem will deny coverage for any other insulin that isn’t produced by Lilly. So it will be totally out of pocket and totally unaffordable (not like insulin is affordable anyways even if it is covered). At what cost for greed? Your kidneys, your eyes, your feet, and your life.

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#17

Agreed, not to mention all three collude to raise their prices together… “Value based pricing” lol. In any other industry these practices would be illegal.

Then when an actual innovator creates a new and improved insulin, they partner with them to market the product and then don’t market it— effectively sabotaging any actual competition

It is disappointing on all fronts. At the end of the day the insurers don’t care what anything costs either because they just pass it on to their customers, who don’t even have a choice but to buy their coverage anymore… I wouldn’t care what a gallon of milk costs if I had a knob I could just turn my household income up with every time I wanted.

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#18

Insulin companies have a history of buying off politicians & lobbying for them to win. They have paid off & campaigned for several Republican action committees.

Lilly even manufactured a drug that caused people to develop diabetes. Of course they don’t care about increasing the price of insulin or ethics. “In 2004, a panel of the American Diabetes Association found that Zyprexa caused diabetes.” Guess who produced Zyprexa? Lilly. They are leeches to the chronically ill.
http://query.nytimes.com/gst/fullpage.html?res=9F00E5DB1430F936A35752C0A9619C8B63

#19

i Remember, that, i saw that, in the news, thank, for the article about it,. so sad, that this, is what, it came to, for insurance companies,.

#20

In 1976 I paid just $3.91 for Lente insulin. One shot a day.

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