Why treating diabetes keeps getting more expensive

Health

“In some ways you might want to put the [word] ‘improvements’ or ‘improved’ in quotes,” said Glen Stettin, a senior vice president at Express Scripts Holding, the largest pharmacy benefit manager. “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.”

In her kitchen in Washington, D.C., Laura Marston, 34, checks her insulin pump after putting in a new vial of the drug. (Jorge Ribas, The Washington Post)

List-price inflation

Drug companies have long argued that list prices are fiction. Health insurers hire pharmacy benefit managers to bargain for secret rebates and discounts off the list price. Insurance, and in some cases financial-assistance programs, then help patients with the rest of the tab.

All three drug companies that dominate the insulin market said that list-price inflation is deceiving for these reasons. But increasingly, as drug prices have grown and insurance companies have changed how benefits are structured, they do matter. There’s growing evidence that patients are shouldering more of the cost of their drugs.

Still, drug companies do not always realize the profit from the rising list price of insulin, said Enrique Conterno, a senior vice president at Eli Lilly. As the price increases, he said, drugmakers often give deeper rebates to pharmacy benefit managers. Those that don’t might receive less-favorable coverage from insurers, he said.

That’s led to a situation in which the list price for Humalog has increased about 150 percent since 2009 — but the net price of the drug after rebates has been flat, Conterno said.

That’s not to say that drug companies aren’t benefiting from list-price increases over the long term, or even in a given year. Last year, Lilly reported that the revenue from Humalog grew 9 percent in the United States, driven mostly by price increases. But last week, Lilly reported that Humalog’s U.S. revenues in the past quarter declined compared with a year ago, even though the company sold more of the drug, because of deeper rebates and discounts.

Ken Inchausti, a spokesman for Novo Nordisk, said in an email that price increases of its insulins “were offset by those rebates and other fees charged by wholesalers and others in the supply chain.”

Sanofi said that the net price for its best-selling drug, the insulin Lantus, has fallen over the past five years. Express Scripts said that the net price for that drug declined nearly 14 percent in 2015.

There have been few efforts to create a cheaper insulin. Walmart, for instance, sells Novo Nordisk's human insulin under the name ReliOn for $25 a vial. Eli Lilly is expected to release the first copycat insulin analog, a chemically altered form of insulin, at the end of this year.

But insulin is a large, complex molecule that can’t be easily made into a pill like a traditional generic. It requires an expensive process using living cells and a bioreactor.

In her kitchen in Washington, D.C., Laura Marston, 34, checks her insulin pump after putting in a new vial of the drug. (Jorge Ribas, The Washington Post)

Jeremy Greene, a physician and historian of medicine at Johns Hopkins University School of Medicine, said that when he began practicing medicine in Baltimore, he was surprised to find patients coming in with poorly controlled blood sugar. They weren’t taking their insulin, they said, because it was too expensive.

“It shocked me . . . that it could be true that this drug that had been around for 95 years was not available generically,” Greene said.

That leaves diabetes patients subject to the decisions that drugmakers and insurers make behind closed doors.

Patricia Bailey, 66, of Springville, Tenn., said that her insurer once switched her to a another brand of insulin without explanation or warning. Although the new drug works the same, she said, it’s disquieting to feel at the whim of a process she can’t control, and in the past she’s had allergic reactions to certain insulins. Her costs have only gone up, and now she pays about $400 out of pocket for a three-month supply.

Bailey is frugal with her insulin now. When she gets a “low reservoir” warning from her pump, she’ll leave it until the tubing is completely empty of insulin. If she runs out at night, she’ll leave it for a few hours, even though it means her blood sugar goes up.

She doesn’t consider it rationing, just stretching her insulin as far as it can possibly go — and she doesn’t tell her doctor.

That leaves a mixed legacy for one of the most important advances in modern medicine: Patients who were once called “living skeletons” on starvation diets can now live normal lives, thanks to drugs that are being constantly tweaked. But they feel like they’re being held captive to an ever-rising price tag on their lives.

“It’s the idea that I have no alternative, I have no choice, I have to pay whatever is asked of me,” Bailey said. “And it’s just continually, continually going up.”