What has to happen?

I’ve wanted to ask this question, and know the answer to it, for a long time, even before I started blogging:

Why does the cost of insulin continue to skyrocket?

What I’ve found out so far is very little. At least very little that allows me to point my finger in a definite direction and say “this is why”. It’s complicated, and if I were to begin to point a finger in a particular direction, that’s where I would start. We can’t find the forest of cash for the trees.

The information on drug research, side effects, production costs, costs to file with regulatory authorities like the U.S. Food and Drug Administration, efforts to build marketing campaigns and pay sales reps to visit endocrinology practices is…. Non-existent. Nobody knows how much it costs to bring a new insulin onto the market (and keep it selling), and depending on how each phase of research, development, and rollout goes, the costs might vary.

Let’s not forget about the rest of the overhead. In Novo Nordisk’s latest financial results, 11.2 percent of their 4 billion dollars in revenue from January through June went to administrative costs, which includes things like pay and benefits, but not only pay and benefits. That’s 448 million dollars.

That seems excessive. And maybe it is. Maybe it’s not. The point is, we don’t know what’s excessive and what’s not in a financial statement for a company that grossed 4 billion dollars in the first six months of the year and published all of its financial line items in a one page document.

Eli Lilly did a much better job, I thought, of detailing their latest quarterly financial statement, but then again, they’re on the other end of the spectrum, and I had to search a little to find Humalog sales listed in the 28 page statement. In case you’re wondering, it was $1.3 billion year-to-date. For a drug that’s nearly 20 years old. Even if it cost a billion dollars or more to develop and produce these drugs, they have certainly more than paid for themselves by now.

But let me back off here. Maybe I shouldn’t point at Lilly and Novo. It’s not just about how much money is being made.

Actually, it’s about the right of a patient to get medication they need to survive, at a price that won’t have to make them have to choose between staying healthy and putting food on the table. Make no mistake: As insulin gets more expensive, this type of decision is already being forced upon a growing number of People With Diabetes here in the USA.

How companies (by companies, I mean drug makers, insurance, hospitals, etc.) reach the point where they charge as much as they do, and we get closer to the breaking point budget-wise, is a matter of great confusion. I really don’t know if this is by design, or if I just don’t have a good handle on the numbers. Here’s what I know:

Insulin should be more affordable.

When I’m tasked with solving a problem like this, I often think back to when The Great Spousal Unit and I bought our house. We knew we were ready to buy, but we didn’t even know if we could even get a mortgage, let alone whether we could afford one. So my solution was to find out what needed to be done to buy a home, and complete each step along the way, until we either moved into our house or knew where we didn’t qualify.

So in this case, I begin with the overarching statement: Insulin should be more affordable. Now the idea is, what needs to be done to make insulin more affordable? What are the steps? Can they all be accomplished? If they can’t all be done, what can’t be done? Why? How do we break down the barriers? What would have to happen to make insulin more affordable?

Why is a drug discovered nearly a century ago more expensive than ever?

Why is a drug approved in 1996 more expensive today than it was when it was approved?

I don’t know if I will get anywhere. But I really want to have a better working knowledge on this subject. I don’t know how long it will take, but I’m going to try to find out as much as I can.

In the meantime, feel free to give me your knowledge, if any, on why the cost of insulin is getting farther and farther out of reach. I’ll let you know if I find out anything.
 
 
There are programs dedicated to helping those who have difficulty meeting the cost of insulin and other diabetes drugs and supplies. Including programs run by Novo Nordisk and Eli Lilly & Co. Rather than re-inventing the wheel, I’ll refer you to this helpful post on the subject from Christel at The Perfect D:
Need Help with U.S. Diabetes Supplies and Medications?
 

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Comments

  • Scott E  On September 4, 2015 at 5:31 pm

    I don’t know what causes the price of insulin to be as high as it is, or if it’s justifiable, but I do know this: As insulin pumps get more and more popular, more and more insulin is wasted. When you consider the insulin that’s discarded with tubing, the not-quite-empty reservoirs/cartridges/pods that get replaced, and the not-quite-empty vials that get discarded because they can’t service a 3-day infusion site, the amount of insulin that gets wasted is staggering.

    I don’t know if there’s a push or a motive to make insulin pumps more efficient (Asante had a jump-start when they eliminated the process of transferring from a larger container to a smaller one), but I wonder how reducing waste might have an imapct on cost, if at all.

    Like

  • dougtallman  On September 6, 2015 at 1:11 pm

    We’re in the middle of a presidential election season. Twenty-plus people are waging campaigns for the White House. Every district in the House of Representatives is up for grabs, as is one third of the seats in the U.S. Senate.

    What has to happen is the roughly 10 percent of Americans with diabetes, and their loved ones, need to become a political force.

    Liked by 2 people

  • Frank  On September 7, 2015 at 6:24 am

    Here in Australia, an insulin prescription (5 boxes of 5 pens/cartridges) is around $300. Luckily it is heavily subsidised by the government here, but if I had to fork out those costs on my own it would be a large chunk of my paypacket. Excellent points.

    Liked by 1 person

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