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At Issue: The complexity of insulin’s high cost
Click here to read our cover story, "As insulin prices rise, endocrinologists confront growing crisis" about efforts to address pricing.
As patients grapple with increasing prices for insulin, many stakeholders have been the subjects of intense scrutiny as the diabetes community searches for solutions.
Debate has swirled around who is to blame for insulin prices that have greatly outpaced inflation over the last decade. In November, the American Diabetes Association called on Congress to hold hearings with all entities in the insulin supply chain, including manufacturers, wholesalers, pharmacy benefit managers (PBMs), insurers and pharmacies, and asked those same groups to substantially increase transparency in pricing associated with the delivery of insulin to the patient.
Ripple effects
Insulin is frequently cited as one of the most expensive categories of drugs by private and government health care payers, leading the list of price hikes for nongeneric drugs in a recent government report on Medicare spending, according to the ADA. The increases, according to experts, are leading to ripple effects in the way stakeholders in the supply chain do business — and plenty of finger pointing.
“When I put the provider hat on, one thing I hear is, ‘Well, [insulin] should just be covered by insurance.’ If only it were that easy,” Kenneth Snow, MD, medical director for northeast regional care management at Aetna, told Endocrine Today. “The problem is, on the payer’s side, we don’t print money. We actually take people’s money and spend it.”
Aetna, like many payers, is now beginning to sign more exclusive contracts with insulin providers, Snow said, directing members toward specific branded insulin products with a goal of making the drug more affordable.
“That, in turn, allows a payer to be able to get that insulin at a better cost, and therefore allow that cost savings to be picked up by both the payer and the member,” Snow said.
For Blue Cross Blue Shield of Michigan, insulin alone made up 6.2% of the company’s total drug spending in 2016, according to Richard Cook, PharmD, the insurer’s pharmacy manager.
“One thing we have to think about, too, is I don’t look at how much individual patients are paying,” Cook told Endocrine Today. “A lot of people are on two insulins — one basal and one bolus. For those patients, it’s the cost of two drugs [going up], and it’s a double whammy.”
The price increases have led Blue Cross to move certain insulin products to a generic copay tier, Cook said, to provide members with cost-effective access to insulin. There are currently no generic insulins available.
“There’s some risk associated with [the move],” Cook said. “But we want people to be able to afford the insulin so they get the benefit of insulin.”
A complex system
In the United States, the often-opaque drug-pricing system has only compounded the cost problem. Because drug prices are not regulated in the United States, the high list prices for insulin are designed to be a starting point for negotiations with PBMs. Those negotiations, critics argue, drive the insulin companies to further raise list prices to maintain high profit margins for shareholders while providing rebates to the PBMs.
Express Scripts, for its part, has fought the characterization that it contributes to rising insulin costs. The country’s largest PBM noted that patients’ share of costs for prescription drugs declined for a second consecutive year, despite brand-name list prices increasing 11% in 2016.
“Pharma has fed everyone that line, that the ‘middlemen’ are causing the prices to be high,” Steve Miller, MD, chief medical officer for Express Scripts, told Endocrine Today. “Remember, 90% of the prescriptions we fill are for generics that have no rebates. I can have a model where I can go rebate-free. We are not interested in high prices. Pharmaceutical companies set the prices.”
Many Express Scripts clients, Miller said, receive 100% of the rebates, but individual patients typically do not see the benefit.
“The rebate goes back to the payer, either the employer or their health plan, and that’s what helps keep their premiums low,” Miller said.
The nation’s three insulin manufacturers, Eli Lilly, Novo Nordisk and Sanofi, have noted that a complex pricing system of rebates, discounts, copays and deductibles all play a role in what patients pay. Novo Nordisk, which recently announced a prescription savings program that will offer discounts on certain medications, including certain insulins, through the PBM CVS Caremark, has called for collaboration among stakeholders to simplify and transform the pricing system and create more pricing predictability.
“We’re committed to developing sustainable solutions with customers and will continue to ensure that patients have access to insulin that is affordable,” Doug Langa, senior vice president and head of North American operations for Novo Nordisk, said in a press release in March. Novo Nordisk did not respond to Endocrine Today’s requests for comment.
Eli Lilly has also offered patient assistance programs, partnering with Express Scripts to offer discounted insulin prices via mobile and web platforms.
“We understand the burden people face when paying full price for insulin,” Mike Mason, vice president, Lilly Diabetes, said in a statement announcing the partnership in December. “This platform will effectively allow Lilly to lower our insulin retail prices for users of this platform while not affecting the reimbursement system for other people living with diabetes.” Lilly did not respond to Endocrine Today’s requests for comment.
Sanofi has also enhanced its copay and voucher programs, limiting out-of-pocket expenses for patients who pay cash or those on high-deductible plans, Anna Robinson, a spokesperson for Sanofi, told Endocrine Today.
“It is important to note that we have not increased the list price of Lantus since November 2014,” Robinson said. “In fact, the net price of Lantus over the cumulative period of the last 5 years has decreased because of efforts to remain included on formularies at a favorable tier, which helps to reduce out-of-pocket costs for patients.”
Patient assistance programs, Snow said, may help some patients in the short term, but greater transparency among all parties is likely the only way to drive down costs.
“Particularly for something such as insulin, where it is a required agent, there’s no wiggle room,” Snow said. “Someone with type 1, there’s no wiggle room. Someone with type 2, who has exhausted their beta cells and their options for oral therapy, there is nowhere else for them to go. This is a wonderful drug that has been around for 100 years. It just demonstrates the great utility of insulin. There’s no easy solution. But, we hope that greater transparency and market pressures can help make products more affordable.” – by Regina Schaffer
- For more information:
- Richard Cook, PharmD, can be reached at Blue Cross Blue Shield of Michigan, 600 East Lafayette, Mail Code 0210, Detroit, MI 48226; email: rcook1@bcbsm.com.
- Steve Miller, MD, can be reached at Express Scripts, 1 Express Way, Mailstop HQ1N02, St. Louis, MO 63121; email: escripts@express-scripts.com.
- Anna Robinson can be reached at Sanofi US, 55 Corporate Drive, Bridgewater, NJ 08807; email: mediaus@sanofi.com.
- Kenneth Snow, MD, can be reached at 151 Farmington Ave., Hartford, CT 06156; email: snowk2@aetna.com.
Disclosures: Cook is pharmacy manager for Blue Cross Blue Shield Michigan. Langa is senior vice president and head of North America operations for NovoNordisk. Miller is chief medical officer of Express Scripts. Robinson is an employee at Sanofi. Snow is medical director of Aetna.