According to a study published online in JAMA in September 2015, nearly 50% of the adults living in the U.S. have diabetes or pre-diabetes, that reflects the lack of production of insulin to lower blood sugar (known as Type 1 diabetes) or insulin resistance (known as Type 2 diabetes), where the body is either not producing enough insulin or not being able to effectively use the insulin produced.
It generally occurs in people who are obese, have a poor diet and/or do not follow a regular exercise regime that eventually leads to this metabolic syndrome.
Diabetes is a chronic disease that afflicts nearly 25.8 million Americans and is the seventh leading cause of death in the country that costs around $245 billion annually. It can also cause damage to blood vessels, the eyes and the kidneys, poor wound healing and devastating soft tissue infections.The American Diabetes Association estimates that the condition claims 70,000 lives annually.
Diabetes is an expensive, a chronic and a deadly disease. It is the seventh leading cause of death in the U.S. Insulin, a biologic drug(made up of living organisms and not the chemical compounds), is one of the primary treatments for diabetes. It was first discovered by the researchers, Fred Banting and Charles Best in 1923. They sold the patent for $1.00 to enable the diabetic treatment achieve quick and wide availability but in modern times it is priced beyond the reach of many Americans. The diabetic Americans, who almost always rely on the insulin to keep their blood sugar levels in check are now facing a mirage as the cost of insulin has tripled in the last 10 years, from $4.34 per milliliter in 2002 to 12.92 in 2013. In fact, a study reveals that since 2010, per-person spending on insulin in the US was more than spending on all other diabetic drugs. According to the Express Scripts 2014 drug trend report, for the fourth consecutive year, per person spending on the diabetes drugs was higher than any other class of traditional drug. There are a few potential explanations for this trend.
- First of all, being a biologic drug, it is more difficult and expensive to copy than standard drugs. As such there is not enough competition that could keep prices in check.
- Payers are constantly pushing for higher rebates. The CVS Caremark and Express Scripts put pressure on Sanofi, Eli Lilly et al. by excluding certain brands from their coverage list, so that they themselves can raise their wholesale prices.
- Almost all the insulin pumps and diabetic management kits are protected by strings of patents – for syringes, delivery systems and production processes making it hard to make any generic alternatives, even when they contain the medicines that are old. The re-patenting of the older drugs like insulin has rendered the medicines that once cost pennies many times more expensive in the modern era.
- The insulin market is all set to become more competitive because of abundant availability of the generic and bio-similar insulins. These insulins are made from the same protein structure as the existing brands and have the same glucose-lowering properties.
- The pharmaceutical companies also raise the prices of the medicines by choosing to sell them by prescription rather than over the counter, so that the insurers cover a price tag.
- A reality is that any drug company needs to sustain profit to run their business, pay their teams, invest fund into research and development, build and market new products and satisfy their investors. These successful insulin companies can help lead to increased innovation but if they are not able to make profits in diabetes, they would not work towards development of new therapies.
In the United States the threefold increase in the price of insulin over the past decade is alarming. It has become such a burden to both the patients and the payers that can possibly prohibit and deny some people access to a lifesaving therapy. The price spikes in the diabetic medications usually remain unnoticed by the patients covered by good health insurance because most of the times the insurance companies themselves demand lower prices from the insulin makers for their customers, but it’s the underinsured and the uninsured who feel the brunt of it.
While the pharmaceutical industry and the drug company might claim to invest 20 percent of their revenues in research and development, it is generally lower than the amount they spend on sales, marketing and administrative expenses.