11 ms·

Insulin Wars: How insurance companies farm out dirty work to doctors patients

100 points by yarapavan 8y ago

AlexandrB 8y ago
The reason seems pretty clear from contrasting these two passages: > The pricing is all the more infuriating when one considers that the discoverers of insulin sold the patent for $1 each to ensure that the medication would be affordable. > The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions.
- ddingus 8y ago
  There is a great living for someone to make a generic. No need to make bazillions. Crowd fund it. Or, regulate. Both would be just fine with me.
  - refurb 8y ago
    A generic already exists - Walmart insulin. Apparently it’s not that great.
    - maxerickson 8y ago
      It's Novo Nordisk, not Walmart. Walmart just charges a low, no nonsense, cash price for it. Know how pharmacies work and you can get it for about the same price elsewhere: https://www.goodrx.com/novolin-n https://www.goodrx.com/novolin-n
    - ddingus 8y ago
      Yes I read that. I wonder if better is still possible, but not just being done.
ceejayoz 8y ago
> There are several reasons that insulin is so expensive. It is a biologic drug, meaning that it’s produced in living cells, which is a difficult manufacturing process. Seems like this is a fairly minimal component. Per the chart at https://twitter.com/odavis_/status/930094350478045184 https://twitter.com/odavis_/status/930094350478045184, the price has gone up 10x in the last twenty years or so. It has presumably not gotten more difficult to manufacture.
- tomalpha 8y ago
  Insulin demand is apparently increasing at quite a rate[0] It's plausible that that could contribute significantly to price increases. Not, to be clear, that I'm defending that or the actions described in the NYT article. [0] https://uk.reuters.com/article/us-health-diabetes-insulin/millions-left-behind-as-diabetes-drives-surge-in-insulin-demand-idUKKCN1NQ00B https://uk.reuters.com/article/us-health-diabetes-insulin/mi...
  - ceejayoz 8y ago
    That article is talking about needing to increase production 20% over twelve years, which doesn't seem like a major obstacle. It also highlights pricing as the issue more than production capacity.
- refurb 8y ago
  That’s list price. Interestingly, net prices have barely budged in the last decade. Up only single digit percentage.[1] As the list price rose and rebates grew, Novo ended up paying more and more rebate money into the health insurance system. Employers used these extra payments to offset costs in any area, including hospital and physician payments. Health plans used them to reduce premiums and also offset other healthcare costs. PBMs retained a portion of these rebates as their profits. [1]https://www.drugchannels.net/2016/12/novo-nordisk-sheds-new-light-on-pbm.html?m=1 https://www.drugchannels.net/2016/12/novo-nordisk-sheds-new-...
  - ceejayoz 8y ago
    https://www.nytimes.com/2018/07/27/health/rebates-high-drug-prices-trump.html https://www.nytimes.com/2018/07/27/health/rebates-high-drug-... > Even as insurers’ drug spending has grown slowly, critics say the rebate game has served to inflate the list price of drugs, which consumers are increasingly responsible for paying. This is especially true for expensive specialty drugs, which treat serious conditions like cancer and multiple sclerosis — and whose prices have been skyrocketing. > As the cost of these products has gone up, insurers have raised deductibles and out-of-pocket contributions so that many of the sickest Americans must now pay thousands of dollars a year to cover their drug costs. These out-of-pocket costs are calculated using something close to the list price of a product, not the net price.
refurb 8y ago
Interestingly, Walmart sells generic insulin. The same stuff used decades ago, for only $25 a vial. However, the advances in insulin since then mean it’s a much more burdensome therapy. https://insulinnation.com/treatment/why-walmart-insulins-arent-the-answer-to-high-insulin-prices/ https://insulinnation.com/treatment/why-walmart-insulins-are...
- deleted 8y ago
  [deleted]
- Eridrus 8y ago
  So this implies that the articles blame on greedy drug manufacturers tweaking formulas to keep patent protection isn't really correct since they have made progress in actually improving the drug. Not to say there is no greed here, but our policy has been that if you do the work of making a new drug, you get to charge whatever you want for an extended period of time. This is the result of the policies we have chosen.
  - refurb 8y ago
    Correct. What we may view as a marginal tweak to create a new product, might mean better blood surgar control, fewer sticks and better health for diabetes patients.
tomohawk 8y ago
This is exactly what you get when there is no transparency, and everything is driven by non-market forces. Why not create an actual market where all medications, medical services, tests, etc, have a known price and people can make decisions based on cost, quality, and other factors?
- rhinoceraptor 8y ago
  We could also fix the way medicine works so pre-diabetics are put on an appropriate, low carb diet so they don't end up with diabetes and all of the horrible complications in the first place. Medicine as a whole will be looked back upon very poorly with how it handled diet, sleep, sunlight exposure, etc.
  - gumby 8y ago
    It's not like doctors and actuaries don't know this. For reasons poorly understood (though there are many theories) most people have a difficult time changing whatever lifestyle was hurting them in the first place. People also have a poor model of how health care works (most people seem to think it's like getting your car fixed: go to "mechanic" and have problem fixed). Finally the educational level that needs to be addressed is quite low (e.g. the FDA requires that medical labeling assume a fifth grade eduction; since most people take two headache tablets, most are set at a level where two is not dangerous, etc). Thus, for example, the ADA diet advice recommends you have a "small" amount of carbs ("have a smaller slice of cake, or have an orange instead") in the hope that at least they can reduce the severity of the symptoms. Too large a goal might lead to no compliance at all. And the actuaries at the insurance companies have figured out the lifetime cost of putting someone on maintenance therapy vs more aggressive treatment that in most cases people won't follow. A case in point: I was diagnosed with prediabetes and my endocrinologist would only prescribe mainline treatment without additional investigation. Legally she could order any test she wanted but not only would the insurance company bounce anything nonstandard (by their standards) but the hospital management would hassle her as well. I was lucky: I had the money and the education to find and work with a different doctor and found an underlying illness. Once treated, a bunch of symptoms (of which diabetes was just one) went away. The system is not set up to help people like me (though sadly it's not clear how it could even with infinite funding).
Zimahl 8y ago
I can't read the article, it's behind a paywall. But from the comments I get that people don't truly understand that there isn't just one thing called 'insulin' that is universally the same. As the husband of a type-1 diabetic who has been on $25 Walmart generic insulin and $1000 name-brand insulin (we have insurance, obviously we don't pay that amount), I can tell you they are not the same. For my wife, she never has unexpected highs/lows on the more expensive insulin. So, sure, non-generic insulin is probably more expensive than it should be. But there was serious research and development done to make these better insulins, and thankfully someone did because they can make life just that easier to manage for a type-1 diabetic.
- refurb 8y ago
  This is a great point. They might all be insulin’s, but the “tweaking” the author refers to means real benefits to patients.
- lozenge 8y ago
  Try incognito mode. The article is about patients having to switch insulins every few months due to their insurance changing their minds on what's covered and what isn't.
LorenPechtel 8y ago
I still think the approach I proposed years ago would be a big help: Turn the usual arguments on their head, prohibit all negotiation. Drug companies would be required to sell to all customers at the same price. This would end all cost-shifting, it's fair for all and forces the drug companies to actually compete on the end price. This would end this sort of preferred drug shifting, it would end the game of state Medicaid often mandating the name brand rather than the generic because most of the money is federal and the state receives a big enough rebate that it's cheaper for them. Applied internationally (we don't have direct authority over foreign drug companies but we could make it a condition of importing them to the US that they follow our pricing rules) and the big subsidy to the UHC countries goes away.
- jamroom 8y ago
  I agree 100%. The approach I like is what I call "lowest negotiated price". How it would work is that buyers (i.e. insurance companies) could still negotiate for a lower cost, but whatever that cost ends up being is the cost _everyone_ pays. This allows buyers to continue to try to get a better price if they can, while likely making sure the price that is agreed upon is fair to all.
  - newnewpdro 8y ago
    That sounds like an interesting solution. It makes me ponder a "highest negotiated salary for $position" approach to combat income inequality
    - jamroom 8y ago
      We have most of that in a union. You can literally trace the decline of middle class income to the decline of union membership - i.e.: https://www.russellsage.org/sites/default/files/Stone_Arthurs_TablesFigures.pdf https://www.russellsage.org/sites/default/files/Stone_Arthur...
  - refurb 8y ago
    There is evidence that this would actually increase prices across the board. How do we know? Such a system already exists. The price that Medicaid plans pay is either 23% less than the average price paid or the “best price” (if lower). When this was instituted, drug companies actually pulled back on their discounts to non-Medicaid accounts, so as to not trigger the “best price”.
pkaye 8y ago
> The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions. Wait don't the patents eventually expire on the old formulations?
- SpikeDad 8y ago
  Exactly. And that's why drug companies spend 100% of their advertising and promotional budget on the new patented drugs. It's well worth it if they can get doctors to switch prescriptions to the new medications with huge profits and no generic than continue to prescribe the in some cases identically effective old drugs that are now cheap and generic. And it works. Not to be a big insurance company shill but they're often the last line of defense against your doctor trying to prescribe an identical, brand name product for the equivalent generic.
dhruvp 8y ago
This is a common problem in healthcare and I think it comes down to these issues: 1. Pharmaceuticals have natural monopolies on these drugs (due to regulation, market power, etc.). 2. The public and end consumers are largely unaware when these monopolies are exercising their power to increase costs. This is because there is no one price, you don't actually pay the actual price (if you're on insurance), and it's difficult to actually realize what the price of a drug is. 3. Many insurance companies don't have strong incentives to combat price increases. [1] As these prices increase, consumers become more and more reliant on insurance. [2] Insurance companies have targets for what percent of their expenses they are allowed to devote to administrative costs (buildings, salaries. etc). As the cost of drugs rises, they can increase salaries etc. while keeping the percent devoted to administrative costs constant. [3] Insurance companies are also largely monopolies. End consumers usually take whatever their employer gives them and in most states there are only a few providers. As such, they don't have much pressure to have more competitive plans. 4. Pharmaceuticals companies respond to demands to increase shareholder value by increasing drug prices. This is exactly what we'd expect them to do as per their incentives. ------ The solution to me is the following: 1. Allow the safe import of drugs from overseas to create a more competitive market (the US has strong regulations against importing drugs mainly due to safety concerns). See this(https://www.pbs.org/newshour/health/u-s-make-easier-import-prescription-drugs https://www.pbs.org/newshour/health/u-s-make-easier-import-p...). 2. Regulate pharmaceuticals and insurance companies as the monopolies they are, or dramatically lower the barriers to entry in the space. 3. Reduce the power of pharmaceutical companies to lobby and reinforce the regulations that help them preserve their monopolies. They have every incentive to lobby for protection and it's no surprise that healthcare industry has by far the biggest lobbying spend in the US - nearly double that of Oil & Gas (https://www.opensecrets.org/lobby/top.php?indexType=i&showYear=a https://www.opensecrets.org/lobby/top.php?indexType=i&showYe...). ------ The book American Sickness(https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?...) discusses just how far we are from any type of perfect competition in this industry and the resulting effects on consumers. I really enjoyed it and it's a great book if you're interested in the space.
aaavl2821 8y ago
> It is hard to know where to direct my rage. Should I be furious at the drug manufacturers that refuse to develop generics? Should I be angry at the P.B.M.s and insurance companies that juggle prices and formularies to maximize profits, passing along huge co-payments if they don’t get a good enough deal? Should I be indignant at our elected officials who seem content to let our health care system be run by for-profit entities that will always put money before patients? > The answer is all of the above. But what’s most enraging is that drug manufacturers, P.B.M.s and insurance companies don’t have to pick up the pieces from the real-world consequences of their policies. That falls to the patients. I think this is an important and balanced quote. Often in the public debate, drug pricing and access, which are two separate concepts, are conflated. A drug can be priced fairly but be inaccessible to patients because insurance companies and PBMs want to hold costs down. This often happens with drugs that treat lots of people. Because of the high volume, insurers will have massive expense for covering a drug, even at fair (i.e. Cost effective) prices. So they fight tooth and nail (often using the media as a weapon) to reduce price. Drug manufacturers won't lower price (often bc they will lose money if they do), so insurers deny An example of this is CAR-T therapies. Cost effectiveness research shows that cost per QALY is within acceptable ranges but payers make it hard to get the drug. I think the same was true of the curative hep c drugs but don't recall the cost-benefit analyses. These drugs were incredibly effective and many people would benefit from them, so payers saw a huge potential expense and denied care until competitors emerged In some cases though, pricing is the bigger issue. This often happens with established drugs where manufacturers increase prices, or drugs with limited competition. Insulin is an example where both pricing and access are not great, i.e. PBMs / insurers and manufacturers are probably equally at fault Drug pricing and access is a complex and highly competitive negotiation between manufacturers and payers and the media is a powerful weapon used in this negotiation. Lots of lobbying done as well. And there are many behind the scenes players with a stake in the debate (i.e. Hospitals wanting the public to blame drug companies for high healthcare costs). This seems like a balanced article to me, but take articles about healthcare with a healthy dose of skepticism
MrTonyD 8y ago
Maybe 20 years back I remember reading an article describing how many generics were intentionally ineffective - missing key ingredients - and secretly created by the drug manufacturer themselves in order to increase sales. It was a big article in the New York Times if I recall.
amriksohata 8y ago
I always say this, but reading that makes me think thank God for the NHS in the UK. Health and education should never be a business. The pharmaceutical companies are so strong and greedy in the US they want people on their drugs, rather than look for preventing the problems. They often lambast and send confusing scientific studies out to ensure no alternative therapies succeed over their drugs.
- ninjin 8y ago
  As a Type 1 diabetic in the UK I feel inclined to agree and disagree. Yes, the drug price negotiation is great and keeps my insulin affordable. However, the NHS comes with its own ailments that we should admit. For Type 1 diabetics in particular, technological support in the form of insulin pumps, continuous glucose metres, and closed-loop systems are only handed out readily to children, while in the US they are far more commonplace since they are covered by insurance. Personally, it took me 3 1/2 years of fighting to get my pump – something that I would have had in months if I would have remained in Japan. One week ago I finally got it and what a difference it makes in terms of control. However, a continuous glucose monitor is nowhere in sight and I frankly do not expect to get one within a decade. Perhaps a pseudo-continuous glucose monitor like the FreeStyle Libre if I am lucky. My diabetes team in London is great and pro technology, but I can only imagine those that are less well-informed on how to make the system (NHS) work or live out in the country. Do they receive the technology they need to manage this disease? For those of us with Type 1 diabetes that seek technological support, do read up over at Insulin Pumpers UK [1]. Also, never feel ashamed to seek the technology that would help you live longer and less constrained by our illness. [1]: http://www.insulin-pumpers.org.uk/ http://www.insulin-pumpers.org.uk/
  - amriksohata 8y ago
    Agreed lots of flaws, what I like is because it's state based it's in their interest to cut costs of medicine rather than try give as much medicine as they can to increase profits
- maxerickson 8y ago
  In the US, dental and vision care are much more business-like than healthcare in general. Prices are reasonable and care is quite advanced. If there was no protection racket, dentistry would be even cheaper. Which isn't to say that running them as businesses is necessarily the right idea, but the regulatory morass that is broader US healthcare probably doesn't teach us everything there is to know about healthcare as a business. (people get angry when you do things like call a $200 filling "cheap", but it lasts for 15+ years and you get to keep the tooth. It's cheap!)
hirundo 8y ago
> This pricing is, of course, hidden from most patients, except those without insurance, who have to pay full freight. The rest of the story flows from this. The ordinary price mechanism is broken because the patient isn't the customer, and the customer is paramount to any business. As long as most patients don't care what it costs most of the time, it will stay broken.
- HarryHirsch 8y ago
  * As long as most patients don't care what it costs most of the time, it will stay broken* Say what? With insulin it's "your money or your life".
  - talltimtom 8y ago
    As a patient, you don’t care if the drug costs 25$ with 20 covered by insurance or 2005$ with 2000$ covered by insurance. That is what he means. List price doesn’t matter to insured patients.
amgreg 8y ago
Luckily I never had to take insulin, as I am not diabetic. I had a dog, however, who needed it. She was prescribed Humulin-N, which is not generic. The generic insulin would not be adequate for her, according to the vet. When I got to the pharmacy, I was amazed to learn that it would cost us ~200 USD each time I needed a vial, which I would not be able to afford; I had pet insurance, but it wasn't any help. I have family in Brazil. Identical medication is sold there for around 10 USD. By "identical" I mean exactly the same -- including brand name (Eli Lilly). Thus, every time a family member was coming to the USA, they'd bring me a few vials purchased from a local pharmacy that honored our US-issued prescription. The price difference is shocking. I can only imagine the despair of many Americans who cannot afford the insulin they need and have no access to alternative markets such as I had.
- dotuser 8y ago
  You can get novolin-n at Walmart for about $26 a vial without a prescription. I’m a type 1 diabetic and fallback to this when I’m unable to get a prescription.
  - amgreg 8y ago
    We ended up finding Novolin N at Walmart, before the Brazil solution, but our Dr. dissuaded us from switching. You probably know this better than I, but the doctor advised us that Humulin N and Novolin N are not interchangeable; while they are the “same” insulin (NPH), the manufacturing process is different, affecting dosage. In our pet’s case, the Dr. had conducted a series of exams to determine Humulin N dosages — which he advised us we would have needed to redo if we switched her to Novolin. I think in humans it is easier to get blood readings, but in the dog’s case the Dr. needed to keep her in hospital to do a series of “curves;” this was expensive, so we did not want to redo.
    - dotuser 8y ago
      Interesting, for me (and your dog's mileage may vary), humulin and novolin are interchangeable. I bought humulin at walmart before they switched to novolin but I rarely use NPH. I only need it when either I don't have insurance or I need a new prescription because my insurance decided to switch to another preferred basal insulin. It's easy for me to see any changes since I can monitor my blood sugars but for a dog, that could be a challenge and probably requires a stay at the vet to run tests.
tracker1 8y ago
While not for everyone, there's religious-like contention on all sides... but a ketogenic diet and fasting focus can help most people get off of insulin. It isn't easy and takes more effort for some than others. I've been mostly off of insulin for well over a year, though I do keep a vial in the fridge for emergencies, I tend to have a spike once in a while. Personally, I think it's about time for medical patents to all but be disbanded. The terms are too long, revision patents should not be allowed, and there should be dual-sourcing requirements for FDA approval. If there aren't two mfg's (cannon have a shared parent owner), you cannot sell the thing.
- refurb 8y ago
  I’d argue you’d get far fewer advances in drugs with a system like that.
  - tracker1 8y ago
    I'd argue most new drugs aren't "advances"
    - refurb 8y ago
      Tell that to cancer patients who are living longer than ever.
      - rhizome 8y ago
        The word "most" doesn't imply an absolute.
        refurb 8y ago
        I assume OP is talking about “me too” drugs. However, there is an argument that they offer a lot of value too. Incremental improvements is why we have a single pill therapy for AIDS with minimal side effects. It took dozens of “me too” drugs to get to that point.[1] [1]https://www.acsh.org/news/2012/05/10/me-too-drugs-are-innovative-too https://www.acsh.org/news/2012/05/10/me-too-drugs-are-innova...
rbobby 8y ago
Why is insulin not an over the counter medicine? Would having it OTC cause problems on the scale of alcohol? What's the "value add" of having a doctor renew an insulin prescription?
- rhema 8y ago
  Probably because its a serious drug that impacts metabolism in unsafe ways. I think it can also be abused as a component of extreme muscle building drugs.
- syn0byte 8y ago
  The number of unexplained but apparently natural heart attacks in middle aged people with disgruntled partners would sky rocket. Weight trainers can and probably already do (ab)use insulin to maximize their gains by manipulating blood sugar levels during workouts. self-diagnosed and self-medicated diabetics showing up at hospitals that have no indication of this and pump them full of glucose.
  - conanbatt 8y ago
    > The number of unexplained but apparently natural heart attacks in middle aged people with disgruntled partners would sky rocket. Are you saying that insulin has to be prescribed to prevent murder?
- maxerickson 8y ago
  I initially said "In many states it is available over the counter." A better response is that several older, more difficult to manage versions are available over the counter.
- dreamcompiler 8y ago
  First because overdosing on insulin is fatal. That's not unique to insulin; overdosing on Tylenol is fatal too, but with insulin you don't get any warning: With a slight OD you'll feel your brain get foggy and you can chew some candy to fix the problem, but with a big OD you just pass out and die. Second because the peculiarities of insurance often mean prescription drugs are cheaper to the patient than OTC drugs. Making insulin OTC might well make it more expensive.
nisa 8y ago
Not sure how possible such an idea is, but why not create a public utility that creates essential medication for the lowest possible price? In the end Medicare seems to pay already huge amounts of money for some medications and there must be know-how in the federal government or other public institutions on how to manufacture medications. I'm not trolling. Like clean water, this is maybe an area were society should not tolerate market failure or cronyism.
- UncleEntity 8y ago
  > ...but why not create a public utility that creates essential medication for the lowest possible price? One possible reason I can think of is then nobody would develop new essential medications because they know the government will just nationalize it after they spend the billions getting it approved through the FDA. And everyone + dog would be calling their medication "essential" in order to get the benefits of governmental production.
- talltimtom 8y ago
  Let’s say we do this, and you create a state funded company that creates cheap insulin, let’s say they can sell it for 25$ in Walmart. What then happens is that to sell that drug to the insurance companies they negotiate with the Phamacy Benefits Managers they will say to them:”We want a 66% rebate!!” They’ll say errr? At what price? The PBM will say:”we don’t care, insurance covers the price”. So that company ends up putting a list price at 74 but providing a 66% rebate to the PBM so they still get their profit... but then the next year the PBM comes back saying “well, we are going to need a bigger rebate because the competitors where willing to raise their prices even more and thus giving us bigger rebates” You essentially have a party who’s getting every company to compete on who is willing to sell at the highest list price who’s driving negotiations against the producers who only stand to gain by higher prices. The American system is rotten to the core.
en4bz 8y ago
For those wondering I found this on WebMD. > In 2000, the first long-acting synthetic insulin was approved by the U.S. Food and Drug Administration. Looks like it will still be at least another year before a viable generic enters the market.
- kgwgk 8y ago
  It has been available for a couple of years already: https://investor.lilly.com/news-releases/news-release-details/basaglarr-insulin-glargine-injection-100-unitsml-long-acting https://investor.lilly.com/news-releases/news-release-detail... More competion may be coming (or maybe not): https://www.fiercepharma.com/pharma/mylan-pressing-forward-lantus-biosim-prevails-patent-challenge-against-sanofi https://www.fiercepharma.com/pharma/mylan-pressing-forward-l...

100 points by yarapavan 8y ago

The reason seems pretty clear from contrasting these two passages: > The pricing is all the more infuriating when one considers that the discoverers of insulin sold the patent for $1 each to ensure that the medication would be affordable. > The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions.

ddingus 8y ago
There is a great living for someone to make a generic. No need to make bazillions. Crowd fund it. Or, regulate. Both would be just fine with me.
- refurb 8y ago
  A generic already exists - Walmart insulin. Apparently it’s not that great.
  - maxerickson 8y ago
    It's Novo Nordisk, not Walmart. Walmart just charges a low, no nonsense, cash price for it. Know how pharmacies work and you can get it for about the same price elsewhere: https://www.goodrx.com/novolin-n https://www.goodrx.com/novolin-n
  - ddingus 8y ago
    Yes I read that. I wonder if better is still possible, but not just being done.

ceejayoz 8y ago

> There are several reasons that insulin is so expensive. It is a biologic drug, meaning that it’s produced in living cells, which is a difficult manufacturing process. Seems like this is a fairly minimal component. Per the chart at https://twitter.com/odavis_/status/930094350478045184 https://twitter.com/odavis_/status/930094350478045184, the price has gone up 10x in the last twenty years or so. It has presumably not gotten more difficult to manufacture.

tomalpha 8y ago
Insulin demand is apparently increasing at quite a rate[0] It's plausible that that could contribute significantly to price increases. Not, to be clear, that I'm defending that or the actions described in the NYT article. [0] https://uk.reuters.com/article/us-health-diabetes-insulin/millions-left-behind-as-diabetes-drives-surge-in-insulin-demand-idUKKCN1NQ00B https://uk.reuters.com/article/us-health-diabetes-insulin/mi...
- ceejayoz 8y ago
  That article is talking about needing to increase production 20% over twelve years, which doesn't seem like a major obstacle. It also highlights pricing as the issue more than production capacity.
refurb 8y ago
That’s list price. Interestingly, net prices have barely budged in the last decade. Up only single digit percentage.[1] As the list price rose and rebates grew, Novo ended up paying more and more rebate money into the health insurance system. Employers used these extra payments to offset costs in any area, including hospital and physician payments. Health plans used them to reduce premiums and also offset other healthcare costs. PBMs retained a portion of these rebates as their profits. [1]https://www.drugchannels.net/2016/12/novo-nordisk-sheds-new-light-on-pbm.html?m=1 https://www.drugchannels.net/2016/12/novo-nordisk-sheds-new-...
- ceejayoz 8y ago
  https://www.nytimes.com/2018/07/27/health/rebates-high-drug-prices-trump.html https://www.nytimes.com/2018/07/27/health/rebates-high-drug-... > Even as insurers’ drug spending has grown slowly, critics say the rebate game has served to inflate the list price of drugs, which consumers are increasingly responsible for paying. This is especially true for expensive specialty drugs, which treat serious conditions like cancer and multiple sclerosis — and whose prices have been skyrocketing. > As the cost of these products has gone up, insurers have raised deductibles and out-of-pocket contributions so that many of the sickest Americans must now pay thousands of dollars a year to cover their drug costs. These out-of-pocket costs are calculated using something close to the list price of a product, not the net price.

refurb 8y ago

Interestingly, Walmart sells generic insulin. The same stuff used decades ago, for only $25 a vial. However, the advances in insulin since then mean it’s a much more burdensome therapy. https://insulinnation.com/treatment/why-walmart-insulins-arent-the-answer-to-high-insulin-prices/ https://insulinnation.com/treatment/why-walmart-insulins-are...

deleted 8y ago
[deleted]
Eridrus 8y ago
So this implies that the articles blame on greedy drug manufacturers tweaking formulas to keep patent protection isn't really correct since they have made progress in actually improving the drug. Not to say there is no greed here, but our policy has been that if you do the work of making a new drug, you get to charge whatever you want for an extended period of time. This is the result of the policies we have chosen.
- refurb 8y ago
  Correct. What we may view as a marginal tweak to create a new product, might mean better blood surgar control, fewer sticks and better health for diabetes patients.

tomohawk 8y ago

This is exactly what you get when there is no transparency, and everything is driven by non-market forces. Why not create an actual market where all medications, medical services, tests, etc, have a known price and people can make decisions based on cost, quality, and other factors?

rhinoceraptor 8y ago
We could also fix the way medicine works so pre-diabetics are put on an appropriate, low carb diet so they don't end up with diabetes and all of the horrible complications in the first place. Medicine as a whole will be looked back upon very poorly with how it handled diet, sleep, sunlight exposure, etc.
- gumby 8y ago
  It's not like doctors and actuaries don't know this. For reasons poorly understood (though there are many theories) most people have a difficult time changing whatever lifestyle was hurting them in the first place. People also have a poor model of how health care works (most people seem to think it's like getting your car fixed: go to "mechanic" and have problem fixed). Finally the educational level that needs to be addressed is quite low (e.g. the FDA requires that medical labeling assume a fifth grade eduction; since most people take two headache tablets, most are set at a level where two is not dangerous, etc). Thus, for example, the ADA diet advice recommends you have a "small" amount of carbs ("have a smaller slice of cake, or have an orange instead") in the hope that at least they can reduce the severity of the symptoms. Too large a goal might lead to no compliance at all. And the actuaries at the insurance companies have figured out the lifetime cost of putting someone on maintenance therapy vs more aggressive treatment that in most cases people won't follow. A case in point: I was diagnosed with prediabetes and my endocrinologist would only prescribe mainline treatment without additional investigation. Legally she could order any test she wanted but not only would the insurance company bounce anything nonstandard (by their standards) but the hospital management would hassle her as well. I was lucky: I had the money and the education to find and work with a different doctor and found an underlying illness. Once treated, a bunch of symptoms (of which diabetes was just one) went away. The system is not set up to help people like me (though sadly it's not clear how it could even with infinite funding).

Zimahl 8y ago

I can't read the article, it's behind a paywall. But from the comments I get that people don't truly understand that there isn't just one thing called 'insulin' that is universally the same. As the husband of a type-1 diabetic who has been on $25 Walmart generic insulin and $1000 name-brand insulin (we have insurance, obviously we don't pay that amount), I can tell you they are not the same. For my wife, she never has unexpected highs/lows on the more expensive insulin. So, sure, non-generic insulin is probably more expensive than it should be. But there was serious research and development done to make these better insulins, and thankfully someone did because they can make life just that easier to manage for a type-1 diabetic.

refurb 8y ago
This is a great point. They might all be insulin’s, but the “tweaking” the author refers to means real benefits to patients.
lozenge 8y ago
Try incognito mode. The article is about patients having to switch insulins every few months due to their insurance changing their minds on what's covered and what isn't.

LorenPechtel 8y ago

I still think the approach I proposed years ago would be a big help: Turn the usual arguments on their head, prohibit all negotiation. Drug companies would be required to sell to all customers at the same price. This would end all cost-shifting, it's fair for all and forces the drug companies to actually compete on the end price. This would end this sort of preferred drug shifting, it would end the game of state Medicaid often mandating the name brand rather than the generic because most of the money is federal and the state receives a big enough rebate that it's cheaper for them. Applied internationally (we don't have direct authority over foreign drug companies but we could make it a condition of importing them to the US that they follow our pricing rules) and the big subsidy to the UHC countries goes away.

jamroom 8y ago
I agree 100%. The approach I like is what I call "lowest negotiated price". How it would work is that buyers (i.e. insurance companies) could still negotiate for a lower cost, but whatever that cost ends up being is the cost _everyone_ pays. This allows buyers to continue to try to get a better price if they can, while likely making sure the price that is agreed upon is fair to all.
- newnewpdro 8y ago
  That sounds like an interesting solution. It makes me ponder a "highest negotiated salary for $position" approach to combat income inequality
  - jamroom 8y ago
    We have most of that in a union. You can literally trace the decline of middle class income to the decline of union membership - i.e.: https://www.russellsage.org/sites/default/files/Stone_Arthurs_TablesFigures.pdf https://www.russellsage.org/sites/default/files/Stone_Arthur...
- refurb 8y ago
  There is evidence that this would actually increase prices across the board. How do we know? Such a system already exists. The price that Medicaid plans pay is either 23% less than the average price paid or the “best price” (if lower). When this was instituted, drug companies actually pulled back on their discounts to non-Medicaid accounts, so as to not trigger the “best price”.

pkaye 8y ago

> The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions. Wait don't the patents eventually expire on the old formulations?

SpikeDad 8y ago
Exactly. And that's why drug companies spend 100% of their advertising and promotional budget on the new patented drugs. It's well worth it if they can get doctors to switch prescriptions to the new medications with huge profits and no generic than continue to prescribe the in some cases identically effective old drugs that are now cheap and generic. And it works. Not to be a big insurance company shill but they're often the last line of defense against your doctor trying to prescribe an identical, brand name product for the equivalent generic.

dhruvp 8y ago

This is a common problem in healthcare and I think it comes down to these issues: 1. Pharmaceuticals have natural monopolies on these drugs (due to regulation, market power, etc.). 2. The public and end consumers are largely unaware when these monopolies are exercising their power to increase costs. This is because there is no one price, you don't actually pay the actual price (if you're on insurance), and it's difficult to actually realize what the price of a drug is. 3. Many insurance companies don't have strong incentives to combat price increases. [1] As these prices increase, consumers become more and more reliant on insurance. [2] Insurance companies have targets for what percent of their expenses they are allowed to devote to administrative costs (buildings, salaries. etc). As the cost of drugs rises, they can increase salaries etc. while keeping the percent devoted to administrative costs constant. [3] Insurance companies are also largely monopolies. End consumers usually take whatever their employer gives them and in most states there are only a few providers. As such, they don't have much pressure to have more competitive plans. 4. Pharmaceuticals companies respond to demands to increase shareholder value by increasing drug prices. This is exactly what we'd expect them to do as per their incentives. ------ The solution to me is the following: 1. Allow the safe import of drugs from overseas to create a more competitive market (the US has strong regulations against importing drugs mainly due to safety concerns). See this(https://www.pbs.org/newshour/health/u-s-make-easier-import-prescription-drugs https://www.pbs.org/newshour/health/u-s-make-easier-import-p...). 2. Regulate pharmaceuticals and insurance companies as the monopolies they are, or dramatically lower the barriers to entry in the space. 3. Reduce the power of pharmaceutical companies to lobby and reinforce the regulations that help them preserve their monopolies. They have every incentive to lobby for protection and it's no surprise that healthcare industry has by far the biggest lobbying spend in the US - nearly double that of Oil & Gas (https://www.opensecrets.org/lobby/top.php?indexType=i&showYear=a https://www.opensecrets.org/lobby/top.php?indexType=i&showYe...). ------ The book American Sickness(https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 https://www.amazon.com/dp/B01IOHQ9LO/ref=dp-kindle-redirect?...) discusses just how far we are from any type of perfect competition in this industry and the resulting effects on consumers. I really enjoyed it and it's a great book if you're interested in the space.

aaavl2821 8y ago

> It is hard to know where to direct my rage. Should I be furious at the drug manufacturers that refuse to develop generics? Should I be angry at the P.B.M.s and insurance companies that juggle prices and formularies to maximize profits, passing along huge co-payments if they don’t get a good enough deal? Should I be indignant at our elected officials who seem content to let our health care system be run by for-profit entities that will always put money before patients? > The answer is all of the above. But what’s most enraging is that drug manufacturers, P.B.M.s and insurance companies don’t have to pick up the pieces from the real-world consequences of their policies. That falls to the patients. I think this is an important and balanced quote. Often in the public debate, drug pricing and access, which are two separate concepts, are conflated. A drug can be priced fairly but be inaccessible to patients because insurance companies and PBMs want to hold costs down. This often happens with drugs that treat lots of people. Because of the high volume, insurers will have massive expense for covering a drug, even at fair (i.e. Cost effective) prices. So they fight tooth and nail (often using the media as a weapon) to reduce price. Drug manufacturers won't lower price (often bc they will lose money if they do), so insurers deny An example of this is CAR-T therapies. Cost effectiveness research shows that cost per QALY is within acceptable ranges but payers make it hard to get the drug. I think the same was true of the curative hep c drugs but don't recall the cost-benefit analyses. These drugs were incredibly effective and many people would benefit from them, so payers saw a huge potential expense and denied care until competitors emerged In some cases though, pricing is the bigger issue. This often happens with established drugs where manufacturers increase prices, or drugs with limited competition. Insulin is an example where both pricing and access are not great, i.e. PBMs / insurers and manufacturers are probably equally at fault Drug pricing and access is a complex and highly competitive negotiation between manufacturers and payers and the media is a powerful weapon used in this negotiation. Lots of lobbying done as well. And there are many behind the scenes players with a stake in the debate (i.e. Hospitals wanting the public to blame drug companies for high healthcare costs). This seems like a balanced article to me, but take articles about healthcare with a healthy dose of skepticism

MrTonyD 8y ago

Maybe 20 years back I remember reading an article describing how many generics were intentionally ineffective - missing key ingredients - and secretly created by the drug manufacturer themselves in order to increase sales. It was a big article in the New York Times if I recall.

amriksohata 8y ago

I always say this, but reading that makes me think thank God for the NHS in the UK. Health and education should never be a business. The pharmaceutical companies are so strong and greedy in the US they want people on their drugs, rather than look for preventing the problems. They often lambast and send confusing scientific studies out to ensure no alternative therapies succeed over their drugs.

ninjin 8y ago
As a Type 1 diabetic in the UK I feel inclined to agree and disagree. Yes, the drug price negotiation is great and keeps my insulin affordable. However, the NHS comes with its own ailments that we should admit. For Type 1 diabetics in particular, technological support in the form of insulin pumps, continuous glucose metres, and closed-loop systems are only handed out readily to children, while in the US they are far more commonplace since they are covered by insurance. Personally, it took me 3 1/2 years of fighting to get my pump – something that I would have had in months if I would have remained in Japan. One week ago I finally got it and what a difference it makes in terms of control. However, a continuous glucose monitor is nowhere in sight and I frankly do not expect to get one within a decade. Perhaps a pseudo-continuous glucose monitor like the FreeStyle Libre if I am lucky. My diabetes team in London is great and pro technology, but I can only imagine those that are less well-informed on how to make the system (NHS) work or live out in the country. Do they receive the technology they need to manage this disease? For those of us with Type 1 diabetes that seek technological support, do read up over at Insulin Pumpers UK [1]. Also, never feel ashamed to seek the technology that would help you live longer and less constrained by our illness. [1]: http://www.insulin-pumpers.org.uk/ http://www.insulin-pumpers.org.uk/
- amriksohata 8y ago
  Agreed lots of flaws, what I like is because it's state based it's in their interest to cut costs of medicine rather than try give as much medicine as they can to increase profits
maxerickson 8y ago
In the US, dental and vision care are much more business-like than healthcare in general. Prices are reasonable and care is quite advanced. If there was no protection racket, dentistry would be even cheaper. Which isn't to say that running them as businesses is necessarily the right idea, but the regulatory morass that is broader US healthcare probably doesn't teach us everything there is to know about healthcare as a business. (people get angry when you do things like call a $200 filling "cheap", but it lasts for 15+ years and you get to keep the tooth. It's cheap!)

hirundo 8y ago

> This pricing is, of course, hidden from most patients, except those without insurance, who have to pay full freight. The rest of the story flows from this. The ordinary price mechanism is broken because the patient isn't the customer, and the customer is paramount to any business. As long as most patients don't care what it costs most of the time, it will stay broken.

HarryHirsch 8y ago
* As long as most patients don't care what it costs most of the time, it will stay broken* Say what? With insulin it's "your money or your life".
- talltimtom 8y ago
  As a patient, you don’t care if the drug costs 25$ with 20 covered by insurance or 2005$ with 2000$ covered by insurance. That is what he means. List price doesn’t matter to insured patients.

amgreg 8y ago

Luckily I never had to take insulin, as I am not diabetic. I had a dog, however, who needed it. She was prescribed Humulin-N, which is not generic. The generic insulin would not be adequate for her, according to the vet. When I got to the pharmacy, I was amazed to learn that it would cost us ~200 USD each time I needed a vial, which I would not be able to afford; I had pet insurance, but it wasn't any help. I have family in Brazil. Identical medication is sold there for around 10 USD. By "identical" I mean exactly the same -- including brand name (Eli Lilly). Thus, every time a family member was coming to the USA, they'd bring me a few vials purchased from a local pharmacy that honored our US-issued prescription. The price difference is shocking. I can only imagine the despair of many Americans who cannot afford the insulin they need and have no access to alternative markets such as I had.

dotuser 8y ago
You can get novolin-n at Walmart for about $26 a vial without a prescription. I’m a type 1 diabetic and fallback to this when I’m unable to get a prescription.
- amgreg 8y ago
  We ended up finding Novolin N at Walmart, before the Brazil solution, but our Dr. dissuaded us from switching. You probably know this better than I, but the doctor advised us that Humulin N and Novolin N are not interchangeable; while they are the “same” insulin (NPH), the manufacturing process is different, affecting dosage. In our pet’s case, the Dr. had conducted a series of exams to determine Humulin N dosages — which he advised us we would have needed to redo if we switched her to Novolin. I think in humans it is easier to get blood readings, but in the dog’s case the Dr. needed to keep her in hospital to do a series of “curves;” this was expensive, so we did not want to redo.
  - dotuser 8y ago
    Interesting, for me (and your dog's mileage may vary), humulin and novolin are interchangeable. I bought humulin at walmart before they switched to novolin but I rarely use NPH. I only need it when either I don't have insurance or I need a new prescription because my insurance decided to switch to another preferred basal insulin. It's easy for me to see any changes since I can monitor my blood sugars but for a dog, that could be a challenge and probably requires a stay at the vet to run tests.

tracker1 8y ago

While not for everyone, there's religious-like contention on all sides... but a ketogenic diet and fasting focus can help most people get off of insulin. It isn't easy and takes more effort for some than others. I've been mostly off of insulin for well over a year, though I do keep a vial in the fridge for emergencies, I tend to have a spike once in a while. Personally, I think it's about time for medical patents to all but be disbanded. The terms are too long, revision patents should not be allowed, and there should be dual-sourcing requirements for FDA approval. If there aren't two mfg's (cannon have a shared parent owner), you cannot sell the thing.

refurb 8y ago
I’d argue you’d get far fewer advances in drugs with a system like that.
- tracker1 8y ago
  I'd argue most new drugs aren't "advances"
  - refurb 8y ago
    Tell that to cancer patients who are living longer than ever.
    - rhizome 8y ago
      The word "most" doesn't imply an absolute.
      - refurb 8y ago
        I assume OP is talking about “me too” drugs. However, there is an argument that they offer a lot of value too. Incremental improvements is why we have a single pill therapy for AIDS with minimal side effects. It took dozens of “me too” drugs to get to that point.[1] [1]https://www.acsh.org/news/2012/05/10/me-too-drugs-are-innovative-too https://www.acsh.org/news/2012/05/10/me-too-drugs-are-innova...

rbobby 8y ago

Why is insulin not an over the counter medicine? Would having it OTC cause problems on the scale of alcohol? What's the "value add" of having a doctor renew an insulin prescription?

rhema 8y ago
Probably because its a serious drug that impacts metabolism in unsafe ways. I think it can also be abused as a component of extreme muscle building drugs.
syn0byte 8y ago
The number of unexplained but apparently natural heart attacks in middle aged people with disgruntled partners would sky rocket. Weight trainers can and probably already do (ab)use insulin to maximize their gains by manipulating blood sugar levels during workouts. self-diagnosed and self-medicated diabetics showing up at hospitals that have no indication of this and pump them full of glucose.
- conanbatt 8y ago
  > The number of unexplained but apparently natural heart attacks in middle aged people with disgruntled partners would sky rocket. Are you saying that insulin has to be prescribed to prevent murder?
maxerickson 8y ago
I initially said "In many states it is available over the counter." A better response is that several older, more difficult to manage versions are available over the counter.
dreamcompiler 8y ago
First because overdosing on insulin is fatal. That's not unique to insulin; overdosing on Tylenol is fatal too, but with insulin you don't get any warning: With a slight OD you'll feel your brain get foggy and you can chew some candy to fix the problem, but with a big OD you just pass out and die. Second because the peculiarities of insurance often mean prescription drugs are cheaper to the patient than OTC drugs. Making insulin OTC might well make it more expensive.

nisa 8y ago

Not sure how possible such an idea is, but why not create a public utility that creates essential medication for the lowest possible price? In the end Medicare seems to pay already huge amounts of money for some medications and there must be know-how in the federal government or other public institutions on how to manufacture medications. I'm not trolling. Like clean water, this is maybe an area were society should not tolerate market failure or cronyism.

UncleEntity 8y ago
> ...but why not create a public utility that creates essential medication for the lowest possible price? One possible reason I can think of is then nobody would develop new essential medications because they know the government will just nationalize it after they spend the billions getting it approved through the FDA. And everyone + dog would be calling their medication "essential" in order to get the benefits of governmental production.
talltimtom 8y ago
Let’s say we do this, and you create a state funded company that creates cheap insulin, let’s say they can sell it for 25$ in Walmart. What then happens is that to sell that drug to the insurance companies they negotiate with the Phamacy Benefits Managers they will say to them:”We want a 66% rebate!!” They’ll say errr? At what price? The PBM will say:”we don’t care, insurance covers the price”. So that company ends up putting a list price at 74 but providing a 66% rebate to the PBM so they still get their profit... but then the next year the PBM comes back saying “well, we are going to need a bigger rebate because the competitors where willing to raise their prices even more and thus giving us bigger rebates” You essentially have a party who’s getting every company to compete on who is willing to sell at the highest list price who’s driving negotiations against the producers who only stand to gain by higher prices. The American system is rotten to the core.

en4bz 8y ago

For those wondering I found this on WebMD. > In 2000, the first long-acting synthetic insulin was approved by the U.S. Food and Drug Administration. Looks like it will still be at least another year before a viable generic enters the market.

kgwgk 8y ago
It has been available for a couple of years already: https://investor.lilly.com/news-releases/news-release-details/basaglarr-insulin-glargine-injection-100-unitsml-long-acting https://investor.lilly.com/news-releases/news-release-detail... More competion may be coming (or maybe not): https://www.fiercepharma.com/pharma/mylan-pressing-forward-lantus-biosim-prevails-patent-challenge-against-sanofi https://www.fiercepharma.com/pharma/mylan-pressing-forward-l...