Why is insulin so expensive in the US

PJoe Biden resident Sign the Inflation Reduction Act into law this afternoon, with a package that includes sweeping climate and tax initiatives and the biggest change to health care policy since the Affordable Care Act was passed. in 2010.

The new law has the effect of reducing skyrocketing drug prices, one of the biggest problems in the US healthcare system. It would allow Medicare to negotiate some drug prices and set a maximum of $2,000 out-of-pocket annually for beneficiaries’ drug costs. One drug in particular has become the focus of fierce debate in Congress: insulin.

Drugs millions of Americans with Diabetes to rely on has become increasingly unable to pay, and advocacy groups and lawmakers have pushed for years to take action to help consumers. The Inflation Reduction Act places a $35 monthly cap on insulin prices for Medicare patients, providing relief to 3.3 million beneficiaries using some form of insulin, according to the report. Centers for Medicare and Medicaid Services.

“People are paying a lot of money for the drugs they need to survive.” Lisa Murdock, chief advocacy officer for the American Diabetes Association. 25% of insulin users split or skip doses because of cost, according to Yale University in 2019 research, faced with impossible choices. “Do I pay rent or food for my family?” Murdock said. “Or should I buy this vial of insulin?”

The original proposal would go much further and limit the price of insulin to Americans with private health insurance. But when the bill passed Congress, Republicans stripped of the initiative after the Senate senator ruled that limiting private insurance would not comply with the budget adjustment process that Democrats have used to pass the bill.

Here’s what you need to know about high insulin prices and the new law.

Why is insulin so expensive in the US

In the 1920s, three insulin discoverers sold the patent to the University of Toronto for $1 each, because co-inventor Frederick Banting said insulin “belongs to the world.” But in the last century, the opposite has been true in the US, when insulin prices skyrocketed: the average price nearly tripled between 2002 and 2013, according to the American Diabetes Association.

In 2021, the Senate Finance Committee released a report examining the list prices of insulin products by three major manufacturers. They found that one commonly used insulin rose $101 from just five years earlier, while another increased $159 over the same period.

The reason for this is complicated. Drug pricing involves many stakeholders, from manufacturers to pharmacies to healthcare plans, a complex chain that often makes it difficult to trace the source of price increases, says Murdock. “There is a lack of transparency,” she said. “The price has gone up dramatically without explanation.”

According to Chandra, the cost of insulin production has not increased over the years; In fact, the average net cost of the most commonly used insulins is 20% lower today than it was in 2007, according to one authorized research by the United States Drug Research and Manufacturing Agency, or PhRMA. But Murdock cites “screening,” a process in which manufacturers slightly alter a drug formulation or delivery method to expand their patents, as a factor that can drive up prices for consumers. consumption.

Amitabh Chandra, a professor of public policy and business administration at Harvard, says that while always screening is part of the problem, it’s not the only factor. Demand for the latest formulations and middlemen also drives up prices. “Pharmaceutical benefits regulators have a strong incentive to negotiate really aggressive rebates with insulin manufacturers,” says Chandra. “But when they negotiate those discounts, they don’t share them with the payers. So there are some very big supply chain problems here.”

How will the Inflation Reduction Act affect insulin prices

For 1 in 3 Medicare beneficiaries using insulin, the Inflation Reduction Act would mean a reduction in the out-of-pocket selling price of insulin, with a copay cap of $35 a month. And while they won’t affect insulin prices directly, other provisions in the law, such as allowing Medicare to negotiate prices and setting a $2,000 annual cap on out-of-pocket costs, will help. Americans using insulin get a milder reduction in the Medicare program.

However, the bill will not affect the overall price of the drug — just the copay amount — meaning insulin will continue to be a financial burden for people not covered by Medicare. “It helps reduce the amount of money spent on patients [cost]but we don’t really discount the prices that manufacturers charge and receive for their products,” said Chandra.

How diabetes advocacy groups responded to the bill

For advocacy groups like the American Diabetes Association, the new law includes the kind of policy change they’ve been pushing for years. “This is a historic moment, to see a national copay limit on insulin,” Murdock said.

“It is fantastic to see our years of advocacy pay off with this long-awaited insulin affordability bill. This important legislation will help our patients who have Medicare and are struggling to afford their insulin,” Endocrine Society President Ursula B. Kaiser said in a statement.

But the fact that privately insured patients won’t see this benefit as Democrats originally intended means the fight isn’t over yet. “Today’s passage of the U.S. House of Representatives’ Inflation Reduction Act represents progress for more than 3 million insulin users in Medicare, but we need to do more to ensure insulin affordability. for everyone.” JDRF, a type 1 diabetes advocacy group, wrote in a statement before Biden signed the bill into law.

Where could the cost reduction battle go next?

Some drug manufacturers offer copay limits that can help insulin users pay, but eligibility requirements can make them difficult to access. A low-cost insulin from a nonprofit drugmaker will hit the market in 2024. For now, advocates are pushing for policy change at the local and national levels.

According to the American Diabetes Association, 22 states and Washington DC have implemented insulin copay limits of $25 to $100 for a 30-day supply, which some advocates are looking to expand across the country. nationwide. Others are campaigning for Congress to consider the bipartisan INSULIN Act introduced in the Senate in July, which would encourage insulin manufacturers to reduce list prices and cap monthly insulin costs for diabetics. sugar is insured at $35.

“What no one thought could happen five years ago is now within reach, and we are determined to join this fight until it is achieved,” Murdock said.

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