In much of Europe, the cost of insulin is about a sixth of
what it is here. That’s because the government negotiates prices directly with
the drug manufacturers. In this country an invisible group of businesses,
called pharmacy benefit managers (PBMs), do the negotiating.
Supposedly they are negotiating for lower drug prices on behalf of insurers, such
as employer plans and Medicare Part D. The problem is that PBMs are
money-making enterprises: they get “rebates” (kickbacks) from drug manufacturers
whose products get the okay from insurers. Though they're supposed to be driving down costs, how can they resist choosing the products with the largest
rebates? They don’t resist. They make big bucks: the three biggest PBMs—Express
Scripts, CVS Health, and OptumRx—bring in more than $200 billion a year in
revenue. Industry analysts estimate that these payments, and other back-room
deals, amount to as much as 50 percent of the list price of insulin.
Added to the problem is the fact that, even though insulin
has been around for almost a century, there is no generic form available in the
US. Just three pharmaceutical companies hold patents for insulin: Eli Lilly,
Sanofi, and Nordisk. Together, these companies made more than $12 billion in profits in
2014, a big portion of which is from insulin sales. What's more, they’re able
to extend their patents by making little tweaks to the molecules, effectively
making them “new” drugs. (After patents run out on older drugs, companies usually stop
making them.) Not only that, the three manufacturers keep raising their prices.
For example, the price of Humulin RU-500 rose by 325 percent from 2010 to 2115. A racket indeed.
Some smart consumers are fighting back. Anthony Di Franco,
who has had diabetes for ten years, set out to learn whether insulin could be
home-brewed on a small scale. (Don’t try this at home.) After some research, he
concludes; “We can do it, and we can do it now. All of the tools already
exist.” Last year, the Open Insulin project raised $16,656 to
demonstrate the technological feasibility of manufacturing insulin (it involves
injecting certain genes into bacteria). As their website explains, “Industrial
protocols for insulin production don't support generic production. They're
complex, decades-old, and often encumbered by patents. Ours will be simple and
open. All protocols we develop and discoveries generated by our research will
be freely available in the public domain.” Hooray for them!
I keep saying I will stop ranting about pharmaceutical
companies. I seem unable to do this. Sorry.
For an introduction to this blog, see I Just Say No; for a list of blog topics, click the Topics tab.
For an introduction to this blog, see I Just Say No; for a list of blog topics, click the Topics tab.