List prices for insulin have kept increasing over time, in part because of incremental clinical developments that some experts say afford negligible benefits, Carolyn Johnson reports for the Washington Post's "Wonkblog."
According to "Wonkblog," the researchers who initially developed insulin sought to keep the drug affordable and accessible. To do so, they sold their patent for the drug to the University of Toronto for $1 per person listed on the patent.
Insulin's patent expired about 75 years ago. Since then, several drugmakers have made incremental clinical developments to drug, which have yielded new products with new patents.
Some of the developments were "substantial" changes to the drug, according "Wonkblog." For example, insulin at first was extracted from the macerated pancreas of farm animals, but advancements in genetic engineering enabled researchers to develop a human version of the drug produced by modified bacteria. Eli Lilly's Humulin, which debuted on the U.S. market in 1982, was the first bioengineered version of the drug to be sold in the United States.
In 1991, Novo Nordisk began selling its bioengineered insulin in the United States. But although the entrance of a new competitor into the market typically keeps prices down, in this case the list prices for insulin began to rise. According to a Washington Post analysis of Truven Health Analytics data, Eli Lilly and Novo Nordisk over the past 20 years increased the prices of their bioengineered insulins by 450 percent above inflation.
Meanwhile, some experts say recent improvements to insulin have not resulted in significant clinical benefits but have allowed drugmakers to receive new patents for the products and sell them at higher prices.
David Nathan, a Harvard Medical School professor, said, "I don't think it takes a cynic such as myself to see most of these drugs are being developed to preserve patent protection." He added, "The truth is they are marginally different, and the clinical benefits of them over the older drugs have been zero."
Pharmacy benefit managers also have debated whether newer formulations of insulin are worth their high costs.
Glen Stettin, a SVP at Express Scripts, said, "For some people, some elements of convenience or how the insulin works for them may be different. But for most people, most of the time the improvements are not really improvements at all."
Drugmakers defend higher prices
According to "Wonkblog," drugmakers cited several reasons for the price increases.
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Todd Hobbs, CMO of Novo Nordisk in North America, said, "I think it's tough to compare the price increases over the decades, but if you look at the advancements from where we were 25 years ago, it's been considerable."
In addition, drugmakers have said they increase older drugs' prices so they can generate funds to launch new and improved products.
Further, drugmakers have noted that their drugs' list prices do not reflect actual patient costs. According to the drugmakers, pharmacy benefit managers negotiate rebates and discounts for the drugs. In addition, drugmakers offer financial assistance programs for certain patients.
Moreover, Enrique Conterno, a SVP at Eli Lilly, said drug companies do not always profit from higher list prices. According to Conterno, when drugmakers raise list prices they also tend to give greater rebates to pharmacy benefit managers to ensure health insurance companies continue to cover their products.
For example, Conterno said although the list price of the insulin Humalog has increased by about 150 percent since 2009, the drug's net price after rebates are considered has remained the same.
In addition, Eli Lilly told CNBC, "A permanent solution that gives everyone who uses insulin reasonable access will require leadership and cooperation across many stakeholders, including manufacturers, PBMs, payers, and policymakers" (Johnson, "Wonkblog," Washington Post, 11/1; Popken, NBC News, 11/2; Jose Vielma, CNBC, 11/1).
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