by: David Hirsch, MD and Aruna Muthumanickam, MBBS
The discovery of insulin in 1921 revolutionized the medical treatment of diabetes, which until then had been a fatal disease. By 1922, the first person – Leonard Thompson, a 14-year-old boy from Toronto – was saved via insulin administration.
James Collip, Frederick Banting and Charles Best sold the patent rights for insulin for the equivalent of Can$3 in 1923 to the University of Toronto. The University granted royalty-free licensing rights to large pharmaceutical companies such as Eli Lilly. The entire endeavor was conceived of as a contribution to the good of humanity.
Through the years improvements in insulin therapy were made. NPH was developed in 1946. More recently, recombinant and longer-acting analog-insulins were created in the 1980s and 2000s. With the development of these new formulations came new patents, which kept prices high. During this period, unlike other Western countries, the United States relied on the free market to control insulin prices. This has resulted in the cost of insulin skyrocketing in the U.S., where insulin is ten times as expensive as in other Western Countries.
There are numerous reasons why insulin costs are so high and numerous challenges blocking price reduction. From production to patents to marketing, pharmaceutical companies have advantages that keep the price of insulin high for patients.
Federal drug laws define insulin as a “biologic” product, which limits the development of potentially cheaper generic versions as can occur with “chemical” drugs. The production of allowed “biosimilar” or “follow-on” products is a tedious, expensive, and resource-intensive process, similar to the production of a new drug, limiting cost savings to patients. The introduction of follow-on insulins such as Basaglar (Lilly) and Admelog (Sanofi) decreased the cost of insulin by only 10-15%.
Patent evergreening is the next hurdle. To make a patent “evergreen” means to keep it alive forever in a variety of ways. One such evergreen insulin is Sanofi’s hugely successful Lantus, which has received 74 patents. This “patent stacking” prohibits any generic competition for 37 years, almost twice the duration provided under U.S. law generally. Additionally, pharmaceutical companies may introduce “new” drugs that are simply tweaked versions of their existing drugs, also known as “product hopping.” Sanofi’s Toujeo, introduced when the patents for Lantus were expiring in some parts of the world, is Lantus at a higher concentration.
“Pay-for-delay” agreements further disincentivize pharmaceutical companies from introducing new and cheaper insulins. Companies with patented insulins pay other companies to not make generic or cheaper insulins. There also exist agreements between pharmaceutical companies that state that they will not compete on specific, unrelated brand-name drugs, including insulin. One such agreement stopped competition between Sanofi and Lilly, to protect the markets for Lantus and Cialis, respectively.
One of the biggest culprits in high insulin prices is rebating. Rebates refer to the money paid by pharmaceutical companies to pharmacy benefit managers to improve their rankings on an insurance company’s formulary. Through a process called non-medical switching, patients who have insurance plans with that company will then be preferentially prescribed (or switched) that particular insulin. The cost of these “rebates” are passed on to the patients. The NovoLog FlexPen list price increased 270% from 2003 to 2016, primarily in the cost of rebates, increasing the price to patients. One paper found that a $1 increase in rebates was associated with a $1.17 increase in list price.
Despite these challenges, recent developments in biosimilars and actions by Congress provide hope for people with diabetes struggling to pay for insulin. Semglee (Mylan) is the first FDA-approved biosimilar interchangeable insulin. Semglee costs $98.65 for a 10 mL vial, a 65% reduction from the list price of Lantus, which it is meant to substitute. The company is also offering patient assistance programs to lower the cost by $75 for a 30 day supply for insured patients and free insulin for uninsured patients.
Earlier this year, the Senate and House Judiciary Committee voted to ban pay-for-delay settlements and product-hopping through the Preserve Access to Affordable Generics and Biosimilars Act and the Affordable Prescription for Patients Act. These bills are now pending approval in the full House and Senate. On the 2nd of November, Democrats released their latest drug pricing proposal under the Build Back Better Act. The bill caps out-of-pocket prescription costs for Medicare enrollees at $2,000 per year. Furthermore, the bill caps copays on insulin for Medicare part D as well as private group and individual health insurance plans at $35. While copay caps do not solve the insulin price crisis (for example, the uninsured would not benefit), they do represent an important step in the right direction. Currently, the Build Back Better reconciliation package is pending a final vote in the House, expected sometime this week. We urge legislators to pass the Build Back Better Act, so that our patients can afford the life-saving insulin they desperately need.