Jan 23, 2019

Insulin prices propel higher spending among diabetics

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Data: Health Care Cost Institute; Chart: Naema Ahmed/Axios

The amount that people with Type 1 diabetes spent on insulin, before subtracting rebates and discounts, doubled from 2012 to 2016 while daily insulin use mostly stayed flat, according to a report from the Health Care Cost Institute, which analyzed health insurance claims from that time span.

The big picture: There are some limitations with the report's data. Regardless, insulin prices and out-of-pocket costs have enraged diabetic patients and parents, who have been at the forefront of the drug pricing debate by explaining how difficult it is to obtain the life-or-death medication.

By the numbers: The average patient with Type 1 diabetes spent $5,705 insulin in 2016, according to HCCI.

  • That represents 31% of that patient's gross health care spending for the year.
  • In 2012, gross insulin costs represented a relatively lower 23% of the average diabetic's health care spending.

Yes, but: There is a major caveat. The report does not factor in rebates and discounts, and therefore the spending totals don't reflect what was actually paid.

  • Insulin makers say their net prices have barely budged over the past several years because most of the price increases go toward health insurers and pharmacy benefit managers in the form of rebates.
  • However, HCCI modeled a scenario that assumed 50% of an insulin product's list price went toward rebates or manufacturer coupons, and the firm still found insulin prices were the leading reason for higher spending among patients with diabetes.
  • Neither Sanofi nor Novo Nordisk addressed specific questions about that rebate scenario. Eli Lilly did not respond to any questions.

What they're saying: Sanofi and Novo Nordisk both issued statements that blamed rebates, high deductibles and other insurance designs as the reasons for higher spending, and they said most of their patients can get insulin for less than $50 per month.

  • HCCI did not break down insulin costs by out-of-pocket spending versus premiums.

The bottom line: It's not as though the situation is about to change. Two of the three major insulin makers, Sanofi and Novo Nordisk, raised prices on their products for 2019, while Eli Lilly has not publicly made a decision yet. Meanwhile all three companies are in Congress' crosshairs.

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