Tag Archives: drug costs

Candid talk on drug pricing.

When you read stories about the high cost of prescription drugs, including insulin, the initial reaction is to wonder how companies can be so heartless when it comes to patients living with chronic conditions who need those drugs.

Though we wonder why, our questions are generally rhetorical in nature. Because we know why. The dichotomy comes down to this: patients want, and often need, to pay as little as possible for drugs that will keep them alive. Companies, on the other hand, will do just about anything to make the next quarterly earnings report look good. When you’re looking at it from either perspective, you can understand each reaction, right?

I can understand it, but I don’t have to agree with it. I say, let’s change the perspective.

I might feel differently if drug makers and pharmacy benefit managers hadn’t already made massive profits at our expense. They were making a profit on my insulin twenty years ago, and they’re making a profit on it today. Same insulin. Billions in revenue.

Twenty years ago, I could afford to get the insulin I needed without much of a hassle. Today, if I lose my job, I might not be able to afford it at all. I’m through with asking, “How did we get here?”.

I say, let’s help companies, especially Pharmacy Benefit Managers, to operate with empathy for the people who have helped pump up those quarterly numbers for a couple of decades. Not because we’ve been such great customers over the years, but because I still believe that people matter more than an executive’s bonus.

I say, let’s put a restriction on how long a company can manipulate drug patent protection for their own benefit. And let’s make it a short restriction. Insulin would still be a profitable enterprise without patent protection, so I don’t see the need for this anymore.

I say, let’s eliminate the idea of drug formulary lists for PBMs. If it’s a drug, approved by the FDA, it should be covered. Period. At the same price as all the other drugs. If we can’t do that, let’s at least ensure that discounts and rebates negotiated by PBMs are passed along to patients enrolled in the plan. Period. Every penny. No exceptions.

You can give me a hundred reasons why none of these ideas would work, and I can’t argue with you on that. But I keep coming back to empathy, and the notion that the way things have always been is not the way things always have to be.

To some, the idea of changing the design of prescription drug coverage and payment seems insane. But in the developed world, that’s only true in the USA. Nearly every other industrialized nation on the planet does a better job of helping patients gain affordable access to drugs.

What’s the holdup, America? It’s time to change the perspective.

Advertisements

In..cre…ment…al…Change

So, you might have seen this news from Eli Lilly and Company this week…

Lilly Diabetes Solution Center Now Open to Help People with Insulin Affordability

If you haven’t read it yet, here’s the short version: Lilly Diabetes has set up a dedicated unit with the purpose of helping people who are having trouble covering their insulin costs.

This is just my viewpoint, and you are free to disagree if you like. I’ve considered this announcement with the old Pros and Cons exercise. First the Cons, then the Pros.
 
 
Cons

– When I think of the term “Diabetes Solution Center”, I think of a mythical place where I’d go to be cured of this condition. That would make insulin a hell of a lot less expensive.

– Insulin is too expensive, price increases have been far too frequent, and we can measure Lilly’s revenue from insulin in billions of dollars. Per year. Why not just lower the price?

– You can only access the Diabetes Solution Center by phone. And it’s not a toll free call. In addition, the Diabetes Solution Center is only open from 9:00 a.m. to 8:00 p.m. Eastern time (US) Monday through Friday. That’s 6:00 a.m. to 5:00 p.m. on the west coast, and 3:00 a.m. to 2:00 p.m. in Honolulu.

– Most people, especially vulnerable populations, only find out about price increases when they go to fill their prescriptions. Many pharmacists, because of contracts they sign with Pharmacy Benefit Managers, aren’t allowed to inform patients of the Diabetes Solution Center. That’s what’s known in business circles as a “gap”.
 
 
Pros

– The day before this announcement, Eli Lilly & Co. didn’t have this option available to patients who struggle to afford the insulin they need to live.

– Lilly is spending money on technology and manpower to staff the Diabetes Solution Center.

– I think, and this is just my interpretation, that Lilly Diabetes is finally coming to grips with the fact that insulin affordability and insulin access are major issues. You can opine on how much they have to do with insulin affordability in America, but again… no one is holding a gun to their heads to force them to do this.

– If one person, or two people, or a hundred people are helped so they feel less burden, pay less for insulin, get more assistance in meeting their deductible, the Diabetes Solution Center will be a godsend for those who are impacted.
 
 
As much as it pains me to admit it, we were never going to go from non-affordable insulin to affordable insulin overnight. This move by Eli Lilly & Co. stops far short of what almost all of us want. But at least it’s a move in the right direction. Incremental change is still change.

My Diabetes Platform for the election.

Welcome to Diabetes Awareness Month. And since this is also a big election year (and we generally elect candidates and vote on issues in November), let’s merge those two together for the sake of this post.

Oh yeah, I’m going there. For the sake of myself and my friends with diabetes, I’m going there.

I fully recognize that there is more than one way to get things done, and I’ve seen countless examples over the past eight years that there is more than one way to not get things done. Rather than going down party lines, I thought I would lay out my own framework for a more perfect diabetes union. My own policy statement that outlines issues I stand for during this very important election cycle. Here are my thoughts:
 
 
– Any talk of a rework or repeal of the Patient Protection and Affordable Care Act must include a guarantee of coverage for every Amercian, regardless of what they’re living with today and in the future. And an undertaking like this must not take place until all sides can agree that this provision stays in place. If you don’t support that, I won’t even think about voting for you, and should you get elected, I might even go to Washington to protest your stance. Loudly.
Note: they don’t want to “repeal and replace”… they want to take away your right to coverage, and deny it forever. If you’re okay with that, and you’re okay with any coverage you might be lucky enough to get costing more anyway (because they never said it would ever cost less), then go ahead and vote for your candidate(s).

– The Competitive Bidding program set up by the Center for Medicare and Medicaid Services (CMS) must end. As soon as possible. I have friends being harmed by this program today, I will have friends being harmed by this program in the near future, and if it continues, I’m a little over ten years from being harmed by this program myself. People who really know, know this program is wasteful. Make them stop it. Now.

– The cost of drugs and devices necessary to keep us alive is too much. Consider the fact that having to pay extra just for the right to stay alive is asking far too much. Having what is considered to be good coverage that costs me thousands of dollars out of pocket every year is a ridiculous way to say “good coverage”. The cost of staying alive should be significantly reduced. Make it happen. My friends and I will help show you how.

– Patients require a seat at the table. Notice I didn’t say “want”… I said require a seat at the table. When our well-being and overall health are being discussed by Congress, by policy makers, by local and state legislatures, it is unthinkable to exclude patients from weighing in on the very issues that affect us. Trust me: you’re going to hear from us anyway. Don’t let it be while you’re backtracking from an ill-informed decision. Let it be when you’re discussing the very thing that we’re experts at living with. There’s a reason we’re experts at diabetes. We live with it every single day. Help us help you.

– In all you do, remember: People With Diabetes are worthy of your respect, consideration, and empathy. If you don’t yet possess empathy, it’s not too late to get some. Trust me, it will come in handy. All great leaders throughout our history have not only possessed empathy, they have displayed it often in executing the duties of office. All poor leaders in our nation’s history have lacked empathy. It is a necessary component of accepting the responsibility of any public office.

– Finally: if it’s not too much trouble, I’d like a slice of pie on my Diaversary this year. Anything that doesn’t contain marshmallow, meringue, or pudding.
 
 
I’m Stephen Shaul, and I approve this message.

Vote for Diabetes this November. To make your voice heard, PLEASE VOTE. Diabetes Patient Advocacy Coalition makes it easy to share your concerns to all the candidates right now: CLICK HERE.

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?
 

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.
 
 
 

%d bloggers like this: