Why does insulin cost so much in America?
Brittany Gilleland was 12 years old when she was diagnosed with Type 1 diabetes. She needed daily insulin injections to survive. When she turned 20, she was dropped from her family’s insurance plan. Uninsured and barely able to make ends meet, she struggled to pay the $250 per month needed for insulin. After her husband joined the U.S. Navy she was able to get her insulin at a lower cost through the Navy’s health plan. Even so, she remains outraged that pharmaceutical companies continue to take advantage of millions of Americans who need insulin to survive. Last year, she started blogging about her Diabetic Journey to raise awareness about diabetes and the rising cost of insulin in America.
29 million Americans live with some form of diabetes, many of them requiring insulin for treatment. They pay the highest prices for the drug compared to anywhere in the world. A vial of insulin costs one-fifth as much in Europe, one-sixth in the U.K. and just one-twentieth in India.
To make matters worse, the price of insulin has risen exponentially over the last five years. A prescription that used to cost $24 to fill now costs between $300 and $450. The price rise affects the uninsured and under-insured the most, many of whom can no longer afford to buy insulin at its list price any more.
Drug manufacturers make insulin available to insurance companies at a much lower price via middlemen called pharmacy benefit managers. The difference between the list price and the lower price negotiated by the pharmacy benefit managers is called the spread. Part of the spread is pocketed by the pharmacy benefit managers, leading to a perverse incentive in which the higher the list price of the drug, the higher the earnings of the pharmacy benefit managers.
The three big pharmaceutical companies that manufacture insulin, Sanofi, Novo Nordisk and Eli Lilly, have raised prices in lock-step over the last 10 years, leading Senator Bernie Sanders to ask the Department of Justice and the Federal Trade Commission to investigate whether the drug manufacturers have colluded in setting prices.
President Trump, as part of his effort to overhaul Obamacare, suggested that high drug prices should be reined in. The week prior to his inauguration, he claimed that pharmaceutical companies are “getting away with murder”.
On January 30, 2017 Brittany Gilleland joined a class action lawsuit against the three big pharmaceutical companies that manufacture insulin, Sanofi, Novo Nordisk and Eli Lilly, alleging that they conspired to raise insulin prices by 150 percent over the last five years, potentially putting patients at risk because they couldn’t afford the drug.
Just before the lawsuit was filed, Ms. Gilleland wrote on her blog, “Our lives are in the hands of pharmaceutical greed and we need the price gouging of life-sustaining medication to end.”
Millions of Americans have been diagnosed with diabetes. Their lives are affected not just by the disease, but also by the high prices for the insulin treatment they need, prices that have been raised relentlessly by the pharmaceutical industry. Follow the articles in this series and share your own story in the comments.
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