WASHINGTON — Fifteen years ago, a patient with diabetes might have paid $175.57 for a 20-milliliter vial of the long-acting insulin Humulin R U-500.
Today, he’d shell out $1,487 for the same tiny vial, according to wholesale acquisition cost data from Elsevier’s Gold Standard Drug Database.
It’s easy to cast blame on the drug makers: Just three pharmaceutical companies, all of them massive, global enterprises, control the vast majority of the $27 billion global insulin market: Sanofi (SNY), Eli Lilly, and Novo Nordisk (NVO). And they always have, virtually since the drug was discovered back in 1921.
But a thorough review of the drug’s nearly 100-year history reveals a much more complicated story: one that makes it clear that the drug makers, their generic counterparts, doctors, and, increasingly, the Food and Drug Administration itself all share blame for the broken insulin market. And while there are a slew of ideas being floated for solving this problem — everything from seizing drug patents to capping how much people with diabetes can pay out of pocket for insulin — multiple policy experts told STAT that creating generic competition is likely the key to bringing costs down for the more than 7.5 million Americans who rely on the drug.
As Congress gears up to investigate the market — already, Sanofi will testify before the Senate Finance Committee next week and Rep. Diana DeGette (D-Colo.) has pledged to bring the big three companies before her Energy and Commerce subcommittee — it’s worth questioning whether there isn’t reason to call others, like generic manufacturers or FDA Commissioner Scott Gottlieb — to testify, too.
“Everyone is at fault, which makes it hard to figure out how to fix it,” Dr. Walid Gellad, who heads the University of Pittsburgh’s Center for Pharmaceutical Policy and Prescribing, told STAT.
Modern insulins mimic the insulin hormone that is normally produced by the pancreas, regulating the amount of glucose in a user’s blood. People with diabetes inject the product either because their pancreas doesn’t create insulin on its own, or because the body has become resistant to the insulin their body produces.
Exactly who discovered the drug first is controversial; even the Nobel prize awarded for its discovery has been called into question. The researchers honored, Frederick Banting and John J.R. Macleod, were just two in a team of researchers at the University of Toronto that eventually discovered how to use insulin to treat diabetes. And Banting publicly fumed that Macleod did not deserve the award over an assistant, Charles Best.
Banting sold the patent for the product to the University of Toronto for just $1, hoping that the product would be readily available, given how vital the discovery was to treating a once fatal condition.
Eli Lilly was the first drug maker to produce the product on a large scale; early versions relied on insulin from livestock like cattle and pigs. Since then, the three manufacturers have developed long-acting and slow-release variations, and a host of other products, some of which are now nearly identical to what the body produces on its own.
For most of the drug’s history, generic manufacturers had little interest in entering the market. The insulin market wasn’t nearly as lucrative as it is today. In 1999, for example, Eli Lilly sold $701 million worth of insulin in the U.S., according to SEC filings. In 2017, Lilly took in $2.6 billion for just two of its insulin products.
“Twenty years ago, many of these products were so inexpensive the investment value just wasn’t there for generics,” said David Gaugh, senior vice president of sciences and regulatory affairs for the Association for Accessible Medicines.
That began to change in the last decade, around the same time drug makers started to spike their prices. In 2008, Humalog, Eli Lilly’s best-selling and most expensive insulin product, grossed more than $1 billion in U.S. sales — 12 years after it hit the market. In 2017, Lilly sold $1.7 billion worth of the drug. The increased revenue in Lilly’s coffers was due largely to price increases, a fact Lilly admits over and over in its own annual reports to shareholders.
Today, there is just one copycat version of insulin — and it is manufactured by Eli Lilly. The product, Basaglar, copies a pricey Sanofi product, Lantus, that is the world’s top-selling version of insulin. It’s roughly 15 percent cheaper than Lantus.
There are other factors, too, that have deterred generics manufacturers that might otherwise have been interested.
Doctors are reluctant to prescribe older insulin products — the ones that are eligible for generic competition, according to the American Medical Association. That’s despite the fact that research shows that many people with diabetes respond just as well to older insulins, according to research published in the journal Diabetes Care. A 2014 study from the Institute for Clinical and Economic Review also found that there’s adequate evidence to suggest older insulins are just as effective as newer insulins for people with type 2 diabetes.
Dr. Kasia Lipska, an assistant professor of medicine at Yale, told STAT that prescribing older insulin is to “go against the tide.”
“This totally thwarts generic competition because if the off-patent drug is seen as already irrelevant, there is no impetus to invest in it,” Lipska said.
While even the American Medical Association acknowledged in a recent policy statement that “guidance and educational materials can help younger physicians become more comfortable with prescribing more affordable insulin alternatives,” some doctors maintain that they shouldn’t be blamed for the current insulin affordability crisis.
“When we first starting using Humalog and Lantus, the difference between the two in terms of cost were minimal, but there were modest differences in hypoglycemia,” Dr. Irl Hirsch, a professor of medicine at the University of Washington, told STAT. “Since cost wasn’t a big concern, how can one blame the physicians?”
Branded drug makers deserve a share of the blame for the concentrated market, too.
Their strategy for keeping generic competition at bay? Filing patents — lots of them. Each of the major manufacturers has hundreds of unexpired patents related to their products, the devices that deliver the drugs, and the methods for manufacturing them.
Sanofi, which manufactures Lantus, has been singled out in particular for allegedly repeatedly making small changes to its product to file for new patents. It has filed 74 patents on some version of that drug alone, according to I-MAK.
Sanofi battled Lilly over its Basaglar product, too, citing patent infringement — effectively delaying the drug’s attempted 2014 launch for nearly two and a half years while the two duked it out in court. And Mylan, which has developed another copycat for Lantus, has its own patent dispute with Sanofi, one that began in 2017. (Mylan’s product also hasn’t yet been approved by FDA.)
“Our scientists’ inventions are novel and nonobvious as recognized by the patents we have been awarded by the US Patent & Trademark Office,” Sanofi spokesperson Ashleigh Koss, told STAT. “By protecting our patented inventions, we are paving the way for the discovery of new medicines to address unmet medical needs.”
The fear of similar patent disputes may also be discouraging other generic manufacturers from considering less lucrative copycats, Gaugh, from the generics’ lobby, told STAT.
“There’s all types of patents that are involved,” AAM’s Gaugh said. “Whether it be process patents, manufacturing patents, device patents … packaging patents, labeling patents and trademarks, all those are different methods used to prevent [competition].”
Right now, however, the biggest roadblock to a generic insulin may actually be regulatory.
Insulin regulation is messier than perhaps any other drug because of its science and its unique history.
Insulins are technically biologics, a label used to describe drugs or therapies derived from living cells and organisms. But policymakers in Washington didn’t have a framework for regulating biologic drugs and their copycat counterparts, biosimilars, until 2010, when Congress laid out the start of that framework in its Biologics Price Competition and Innovation Act. As part of that law, Congress said insulin — which had previously been regulated like any other drug — would be regulated as a biologic beginning in 2020.
Congress left the logistics of that transition up to FDA — and the agency’s transition plan wasn’t as flexible as generic makers had hoped, at least for encouraging a generic insulin.
The FDA’s policy decrees that any insulin application that’s still pending before the agency on March 20, 2020, will be rejected. Any applicant would then have to start over and reapply under a new biosimilar pathway.
Given the lengthy timeline for drug development — along with an uncertain and often timely FDA approval process — the hard stop in 2020 has made it dicey for drug makers to submit a potential generic insulin application for several years now.
Even companies who have insulin products in development and are ready to file their applications with the FDA are now waiting to apply until after 2020, given they want to avoid going through the time and money of applying in 2019, only to be rejected on the March 20, 2020, date, AAM explained to the FDA in March 2016.
“[T]he policy is already having a devastating effect on current development programs for many important protein products, including insulins,” AAM wrote in its most recent letter to the FDA on the subject, adding that the policy “conflicts with the relevant statutes, is arbitrary and capricious,” words often used by companies to signal they will sue over a policy.
When it was first proposed, generic drug makers blasted the 2020 cliff, saying it would “impair patient access to affordable alternatives” to insulin and other drugs.
Gottlieb said at an industry conference in December that the FDA had “carefully considered all comments received on the prior draft guidance,” however, the FDA rejected the major change generic drug makers wanted: changing the FDA’s policy for drug applications pending before the agency on March 20, 2020.
“We are carefully considering steps for pending applications if they’re pending before March 20, 2020 to minimize disruption to development programs,” FDA spokesperson Lyndsay Meyer told STAT. “At this time, the agency anticipates that it will impact few, if any, applications.”
“Sponsors have known about this transition for a decade. They’ve had time to prepare,” Meyer added.
Multiple lobbyists and consultants STAT spoke with all agreed that the FDA has the ability to interpret the law in a way that doesn’t delay generic insulins. AAM has suggested that the FDA simply rely on the data included in any application already pending on March 20, 2020, and allow a sponsor to amend its application with any additional information that might be needed, given the application will now be considered by the FDA to be a biologic, not a drug.
“The opportunities for FDA to really expedite competition are huge,” said Gillian Woollett, a senior vice president at Avalere Health. “The opportunities to encourage sponsors are all available now. So what I don’t understand is why FDA and HHS are saying all the things they’re saying [about encouraging new generic competition] and they’re not doing the things they can do now that would actually promote competition.”
As lawmakers in both parties eye drug prices as a potential area for bipartisan consensus and collaboration, it’s evident that insulin is near the top of the congressional to-do list.
Three separate congressional committees have held hearings in the last two months on drug pricing, and at each, the issue of insulin affordability loomed large. Two committees have already launched investigations of insulin makers, and another plans to have an insulin maker testify later this month.
Lawmakers, too, are already weighing legislation to lower insulin costs. The Congressional Diabetes Caucus has proposed a sweeping package of proposals for increasing insulin affordability that includes a legislative proposal to require insulin makers to disclose how they set their prices and another that would direct the FDA to expedite review of lower-cost insulins.
“Who would believe that 100 years later there are only three manufacturers?” House Ways and Means Chairman Richard Neal (D-Mass.) said. “It’s pretty wild when you consider that.”
Ike Swetlitz contributed reporting.