Humulin could be created in vats instead of harvested from cows or pigs, and it relieved doctors’ worries that the looming diabetes epidemic would cause a shortage.
“These were an incredibly efficient way of making insulin. We’d never run out; it would keep the prices under control,” Nathan said. “How that has changed.”
The Danish company Novo Nordisk began making its own bioengineered human insulin in 1991. Rather than lower the price, however, competition had an unusual effect: The list prices began to rise.
As concerns about drug prices have simmered among the public and politicians, the long history of insulin shows the ripple effect of the industry-wide practice of raising list prices of existing drugs: All boats rise with the tide. Price increases on old drugs recalibrate how much it costs to treat the disease, paving the way for new drugs to be launched at ever higher prices.
According to a Washington Post analysis of Truven Health Analytics data, over the past two decades, Eli Lilly and Novo Nordisk raised prices on their human insulins 450 percent above inflation, closely in sync.
That’s not what Eli Lilly anticipated, at least not publicly. When Humulin was introduced in 1982, company spokesman Ronald Culp told the New York Times, “The long-term desire is that the cost will come down, but at this point we cannot speculate on just how far.”
Since then, other insulins have come on the market in faster-acting or longer-lasting formulations. Experts have been divided about how beneficial those advancements are and whether they are necessary for many patients. Meanwhile, the new drugs’ prices have risen rapidly. Humalog, for instance, has soared from $21 a vial to more than $250 in the past 20 years.
“Yes, in a dramatic fashion, the newer insulins may not have been as large . . . as those previous leaps,” said Todd Hobbs, chief medical officer of Novo Nordisk in North America. “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.”
Critics don’t argue that the new drugs are ineffective or that there aren’t subsets of patients who do better or prefer the newer drugs. Instead, the debate centers on whether the benefit is worth the increased cost.
Pharmacy benefit managers — the middlemen hired by insurers to negotiate prices with drugmakers — have been among the loudest voices in that debate.
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