An estimated 26.9 million people of all ages (8.2% of the U.S. population) have been diagnosed with diabetes. A further 7.3 million adults ages 18 years or older (21.4 percent of adults with diabetes) are estimated to have diabetes but are undiagnosed. For people with diabetes, insulin is essential for them to live but in the US, insulin prices have been much higher than elsewhere in the world resulting in crippling costs for users, so much so that some people cannot afford to buy the drug.
One of the major achievements of Democrats and the Biden administration in passing the Inflation Reduction Act (IRA) at the end of last year was that it allowed Medicare to negotiate down the price of insulin for those over 65.
Effective January 1, 2023, out-of-pocket costs for insulin are capped at $35 per monthly prescription among Medicare Part D enrollees under the Inflation Reduction Act (IRA). A similar cap takes effect in Medicare Part B on July 1, 2023. An estimated 1.5 million Medicare beneficiaries who use insulin would have saved $734 million in Part D and $27 million in Part B if these caps had been in effect in 2020.
Thanks to the pressure exerted on prices by that move, one of the major manufacturers of the drug has announced that they will reduce the price of the drug for everyone.
High insulin prices have not earned any U.S. manufacturer many friends, with list prices increasing 54% from 2014 to 2019.
Most troublingly, an estimated 1.3 million uninsured people with diabetes and patients with inadequate insurance have resorted to rationing their insulin. Skipping doses because of high insulin prices has sometimes had tragic and even deadly consequences.
Part of the problem with the existing system is that some patients, especially if they’re uninsured or have high deductibles, end up paying the list price – which can mean spending $1,000 or more a month on insulin. This can be a crushing financial burden.
Lilly’s new $35 out-of-pocket cap means that privately insured patients and those without insurance requiring insulin will spend no more than that monthly for copays. Its 70% reduction in the list price of two popular name brand insulins, Humalog and Humulin, will bring some financial relief. And the company has also reduced its generic lispro’s list price to $25 a vial, down from $126.
Lilly has put pressure on its biggest competitors, Novo Nordisk and Sanofi, to follow suit.
These lower prices could also make Lilly’s insulins affordable to cash-paying patients. As a result, these insulins could be added to the list of drugs provided by pharmacies that are disrupting the U.S. prescription drug industry, like Mark Cuban’s Cost Plus Drug Co. and Blueberry Pharmacy. These companies provide low-cost drugs with transparent markups or through membership programs, typically without insurance.
It is things like this that significantly improve the lives of so many people.
Bernie Sanders has been railing about high insulin prices for years, pushing for the government to be able to negotiate insulin prices. There is no doubt that these moves are a result of public pressure created by his tireless efforts. But he is not stopping there. He wants to reduce the prices to $20 a vial. The man never gives up on his efforts to improve health care for everyone.
His ultimate goal is to expand Medicare to cover everyone, creating effectively a government-run universal health insurance plan that would get rid of the extortionist private, for-profit health insurance companies. Such a system would give the government much more power to negotiate health care costs across the board.