Amid raging debate over the cost of insulin, a new report finds prices in the U.S. were often five to 10 times higher two years ago than in all the other countries in the Organization for Economic Cooperation and Development, an intergovernmental group that was created to stimulate economic progress and world trade.
In 2018, the average U.S. price per standard unit across all types of insulin was $98.70, compared with $6.94 in Australia, $12.00 in Canada, $7.52 in the U.K., and $8.81 across all other OECD countries combined, according to the report by the RAND Corp., which conducted the analysis on behalf of the Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation.
About the Author Reprints
Bottom line – insulin is over-priced in the U.S. Priced correctly, rebates which drive up the costs, would not be necessary. PBMs negotiate rebates, charge administrative fees and have other proprietary fees from the manufacturer that add to the costs of a drug. The drug(s) then get preferred status on the PBM formulary (drug list) and the competitor product(s) blocked (not covered). Who ultimately pays for this? Pharma…..I think not. The PBM…..I think not.
Since drug costs to payors in PBM contracts are based off discounted AWP lets consider this:
Lilly’s AWP for their authorized generic insulin lispro 100u/ml pen is half the price of their branded insulin lispro – Humalog 100u/ml pen. Generic admelog 100u/ml pen is about 53% less than Humalog. The PBM preferred product – Humalog. Cover the generic and both the manufacturer and PBM lose out. Cover the authorized generic and the PBM loses out. Cover the brand and the manufacturer and PBM make out. And the payor gets a rebate. How much is the rebate? It’s “proprietary”. Trust us. “It’s a really
great rebate”.
Dr. Fein,
1. Can you please give us a citation for your figure of 80 to 100%, and to what fraction of insulin-users it applies?
2. I actually don’t think this is shoddy research. The paper itself is available freely from the RAND website https://www.rand.org/pubs/research_reports/RRA788-1.html. There are serious problems with getting real-world pricing data, given the opacity of the US distribution system and payment agreements, but they seem to have used the data they can get. If you know of better data, by all means cite them.
The data are readily available, so there is no excuse for the authors’ bad assumptions.
Try SSR Health, which supplies net price data to ICER.
Average insulin rebates/discounts off list price for 2018: Medicaid = 89%, other payers = 70% (per “Changes in List Prices, Net Prices, and Discounts for Branded Drugs in the US, 2007-2018,” JAMA, March 2020, page 857
https://drugch.nl/32R7xY5)
In my professional opinion, rebates and discounts for insulin are even deeper in 2020. For example, Eli Lilly reported that the 340B discounted price (= Medicaid net price) for its insulin is 10 cents per 10-mL vial. That’s 0.04% of product’s list price. https://drugch.nl/3hmQrXJ
So, I stand by my assessment: Shoddy, unreliable research. Being “freely available” is not a sign a quality.
Shoddy research. Rebates on insulin are 80% to 100% off list prices. The 50% figure has zero credibility or relevance.
Nonetheless, I’m sure the inaccurate conclusions from this shoddy research will be widely reported by hundreds of gullible, innumerate journalists.