A lot of zeros.

Like many, I’ve seen and heard the recent NPR story:
Why is insulin so expensive in the U.S.?

The story is based on research from Dr. Jeremy Greene from The Johns Hopkins University in Baltimore (still trying to get an interview), where he is a professor of medicine and history of medicine. He did some research on the history and cost of insulin, and published his findings in The New England Journal of Medicine.

The truth is, we all know insulin is very expensive here. And we all have our own opinions on why we think insulin is expensive here (where are the generics?). After reading a few of these stories this week (because diabetes stories with an impact aren’t reported for months, then the same story is reported by everyone in a few days), and then reading comments below each piece, I started to become overwhelmed.

Partly, it was because of the numerous “facts” presented by commenters; and partly, it was because of the fact that I felt the really difficult questions haven’t been asked or answered on this yet. Regardless, I started to feel information overload coming on.

For me, when that happens, I usually try to pull back and simplify the subject at hand. I may not solve the problem this way, but it gives me a good starting point. So that’s what I did. I did some initial research into market share for the three big companies selling insulin in the States. I also researched how much insulin costs me, about how much I use on a monthly and yearly basis, and then I extrapolated that (which is fancy talk for multiplied) by the number of people taking insulin in the USA. I wanted to be conservative in my calculations.

This is not scientific… this is just designed to take a typical Type 1 customer (me), and consider the cost of the life-giving medication that I need every day. How much are me and my D-peeps, and our insurance providers, shelling out for insulin?

According to Dr. Greene’s research paper, there are currently 6,000,000 patients taking insulin in the United States.

I looked at the cost of insulin from my prescription provider for Lantus, Apidra, Novolog, Levemir, and Humalog. According to my prescription plan, the cost of a 100 unit insulin vial (my cost plus my employer’s cost) breaks down as follows:

Lantus (made by Sanofi-Aventis): $250.01
Apidra (also made by Sanofi): $204.56
Novolog (made by Novo Nordisk): $204.65
Levemir (also made by Novo): $250.01
Humalog (made by Eli Lilly & Co.): $204.01

Humalog is not my insulin of choice, but it’s the cheapest in the list, so let’s go with that as a benchmark. In fact, let’s just round that number down to $200.00 to make the math easier. And to make it even easier, let’s say that I use one 100 unit vial of insulin every month. At that rate:

$200.00 per month X 12 months per year = $2,400.00

Now, let’s go a bit further (but not too much), and multiply again:

$2,400 per year X 6,000,000 insulin users in the USA = $14,400,000,000

That’s a lot of zeros, people. And this is just the United States we’re talking about. In fact, research from 2013 suggested a worldwide insulin market of $21 billion dollars in that year alone. And we know that there aren’t any fewer people living with diabetes in this country, or around the world today.

But still, let’s take that conservative $14.4 billion number and break it down by market share across these three companies. Again, there is no way this is science, but it should give us some sort of ballpark estimate of the amount of gross revenue that Sanofi, Lilly, and Novo are generating. The only data I could find on market share goes back to 2011, and is contained HERE. Since that is all I have, that is what I’m going with. Again, I’m just ballparking here. I’m not trying to arrive at the actual-to-the-dollar accounting involved, because how could I? Here we go:

In 2011, Sanofi-Aventis had a 37% value share of the market. Of our $14.4 billion, that would be:
$5,328,000,000

In 2011, Novo Nordisk also had a 37% value share of the market. Of our $14.4 billion, that would be:
$5,328,000,000

In 2011, Eli Lilly had a 26% value share of the market. Of our $14.4 billion, that would be:
$3,744,000,000

Let’s be honest here, and recognize it takes lots of research and development, plus a lot of clinical trial testing, plus building out production of the drug, providing documentation to patients and doctors, and a lot of other things to bring a new insulin to market. What would that cost, exactly? A billion dollars? Two billion? If it cost three billion dollars for Lilly to bring Humalog, my lowest costing insulin to market, they almost certainly would have made a profit on their investment in one year alone. In this country alone.

You know, we still haven’t solved the “Why are there no generic insulins?” question. But really… why would there be? If you’re a director of one of these drug makers, or a shareholder, and you, or someone you love, doesn’t live with diabetes; or you can afford insulin regardless of the cost; why would you not want to fight tooth and nail to keep low cost alternatives out of the hands of patients?

This is where I like to remind people that making a profit is good… until it starts to affect someone’s well-being in a negative way. Then this practice must be stopped. Just like patients should trump proprietary, patients should also trump profit. Believe me… there is still plenty of money to be made.

Guess what? It costs a lot of money to buy insulin to stay alive too. I think… I hope… we can find a—dare I say it—Happy Medium here. I’ll be okay with drug companies making money on insulin, if they’ll be okay with me affording said insulin so I can stay alive. For a long time to come.
 
 
 

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Comments

  • Rachel  On April 10, 2015 at 11:55 am

    Great post, Stephen! Pass this on!

    Like

  • Karen  On April 10, 2015 at 2:52 pm

    I’m going to echo Rachel and say great post!!! Certainly gives me a lot to ponder.

    Liked by 1 person

  • dougtallman  On April 11, 2015 at 1:27 pm

    Nice job, Stephen. The cost of insulin is probably the biggest issue that still flying under the radar with health officials. We need to bring more attention to it.

    A couple of thoughts: There could be significant costs in liability. If a batch of “bad” insulin goes out and someone ends up in a diabetic coma, the company would need to protect itself against that. Not billion-dollar significant, but easily million-dollar significant.

    Each of the companies would want some products to supply excess revenue, to finance the search for other drugs. Theoretically, that could be billion-dollar significant.

    And then there’s advertising. I saw my first Levemir ad this morning. I’ve often wondered how drug companies justify spending so much on TV ads.

    Public stock statements for Lilly and possibly Novo should answer all these questions. (Novo’s Danish, but it trades on the NYSE, so I assume some kind of company information must be available. Sanofi’s French, not sure what info is available on them. Lilly is U.S)

    Like

  • dougtallman  On April 11, 2015 at 1:28 pm

    Reblogged this on Diabetes Free Press and commented:
    Stephen draws attention to an important issue for the #DOC, the cost of insulin.

    Like

  • Ally  On April 11, 2015 at 2:41 pm

    Can you come help me with my Finance homework this weekend, please?! But seriously, rock on. This is great.

    Liked by 1 person

  • dougtallman  On April 23, 2015 at 2:40 pm

    Stephen —

    My company is changing its insurance plans around. The best plan for me appears to be one in which the premiums are covered by the company, but there’s a high deductible. It takes effect May 1.

    Although the plan has other benefits, I was dreading the first couple of trips to the drug store, figuring I’d only get a few percentage points off Novolog and Levemir, which both retail for about $300 for a month’s worth.

    I did some googling and found that Novo Nordisk offers a plan that will cover most of the cost of their name-brand products. You sign up at NovoNordiskSavingsCard.com. It’s something like $25 for a refill. Maybe not a generic price, but darn close, and a heckuva lot better than $300.

    The sign-up process asks for the usual personal information. There’s a notice that the pharmacy will report refill info back to the company. I won’t need the card for several weeks (I managed to get a refill in before the new plan kicks in), but I’ll report back what it was like when I use it.

    #dsma had a session about the cost of diabetes some time ago. I thought I had it bad, but it was obvious that there were many on that chat who were far worse off than I am. A program like this could help. More people should know about it.

    doug

    Liked by 1 person

    • StephenS  On April 23, 2015 at 4:16 pm

      Doug, I applaud companies (like Novo Nordisk) that help people who need it. Thanks!

      Like

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