I had a face to face meeting with Eli Lilly yesterday, speaking specifically about insulin prices.
This is what they want you to know: The spike in insulin pricing was spurred by the Pharmacy Benefits Managers. That in itself wasn't a surprise to me, but there are a few details I want to share that I haven't seen reported before.
This is the story:
4 years ago Eli Lilly got a call from one of the major Health Insurance Benefits Managers saying they were no longer going to carry/cover their insulin anymore. That’s it. They were just dropping them off of the plan. Obviously, Eli Lilly was backed into a corner. It was either negotiate with the Benefits Manager or not have their insulin available to a giant part of the patient population in the US. They negotiated with them and gave them deep rebates on their insulin.
“Deep rebates?” You ask. “We didn’t see deep rebates.”
Eli Lilly explains the process like this: If they sell a $100 bottle of insulin to Pharmacy Benefits Manager for $40, the Pharmacy then sells the bottle of insulin to us for $100 and the Benefits Manager pockets the $60. They feel validated in doing so because they say they are using that $60 to pass savings onto the consumer by way of lower insurance premiums and the like.
That’s bullshit. If this is true, this is coercion. And it should be (is?) against the law.
Coercion: The practice of persuading someone to do something by using force or threats.
It seems as though to “fix” the problem, insulin companies felt the logical thing to do would be to inflate the list price of insulin so the Pharmacy Benefits Managers FEEL like they are getting a deal. So hypothetically, rather than sell a $100 bottle of insulin for $40, they could sell the PBM’s a $235 bottle of insulin for $100. Then they are making a profit. PBM’s are happy. Eli Lilly is happy. Who isn’t happy?
The insulin companies play down the list price because they say that isn’t what most people pay. Most people enjoy discounts through their insurance company.
Oh, but wait. The new trend with insurance companies are high deductible plans…so a lot of people are paying list price for months and months, most almost the full year, until their deductible is met. Our family of 11 just met our deductible in October. (Thankfully, our pharmacy benefits are not subject to meeting the deductible first. Yet…)
And the wave has just begun to crest. High deductible insurance plans are on the rise, and selling at an alarming rate, because it is all America can afford. (I use the term “afford” loosely.) Last night Doug and I were reviewing our benefits options online, and in bold letters on the website it said,
“YOU CAN SAVE SIGNIFICANT MONEY BY MOVING TO A HIGH DEDUCTIBLE PLAN!”
(I shuddered when I read it.) I believe we are only seeing the tip of the iceberg when it comes to accessibility to insulin and the like. It’s scary to say the least.
What about Canada?
When I asked why we could walk into a pharmacy in Canada and buy the SAME bottle of insulin for $35 that sells for $235 in the states, I was told it was because the Canadian Government demanded that price.
“How can you send it over there for just $35?” I asked.
“We’re losing money.” They said.
“So you figured, we’ll just have Meri make up the difference?” (I’ll get back to this shortly.)
The conversation then switched over to what I referred to as “generic” insulins coming on the market this coming year. The correct term, I found out, is “Bio-Similar” because it’s more complicated then just producing a pill of some sort. Eli Lilly is coming out with a Bio-Similar of Sanofi’s Lantus in December. Because it is just as complicated to make as the any other insulin, the cost difference isn’t really going to be apparent. Sanofi is retaliating, so to speak, by producing a “Bio-similar” of Eli Lilly’s Humalog. Already, CVS says they won’t cover Lantus anymore, and will only cover the generic, (wait, Bio-Similar) that Lilly is making.
“How is any of this going to help us!?” I asked.
“Compitition can drive down prices. It will be a good thing.”
“But insulin has been completely immune to the competition pricing wars, how am I supposed to believe it will begin now?”
It seems some (one?) insurance companies are already agreeing to put the “Bio-similars” under the generic pricing tier for co-pays. That will help some people. But how long with that last?
My next question was this: “So insurance companies will likely say, ‘We’re not covering Humalog anymore, we are going to use the Bio-Similar Sanofi is producing instead.’ If this happens, and the American Population can’t readily get their hands on Humalog, who is going to pay for Canada’s Humalog?”
Obviously they didn’t answer. It was a rhetorical question anyway.
But really, when I think about it, there is no way they are literally “losing money” on sending insulin to Canada. There HAS to be a benefit, or they wouldn’t send it. (I sent an email asking for clarity. I'll let you know if I receive a response.)
Two days ago Bernie Sanders sent out a bunch of tweets burning (Bern-ing?) insulin companies for their price hikes.
Eli Lilly and Novo Nordisk clearly care more about their profits than their patients. It's time to end their greed. pic.twitter.com/MqCsHNjzcO
Why has the price of Humalog insulin gone up 700% in 20 years? It's simple. The drug industry's greed. pic.twitter.com/SUeSbsr2Ka
It makes no sense that the same drug that costs $70 in France costs $450 in the US. We should reduce barriers to importation of drugs. pic.twitter.com/h3MzOSCI7g
How ridiculous is it that we want to open boarders for us to buy insulin from other countries because other countries have governments to negotiate and we do not.
We need to fix the problem at home. OUR HEALTHCARE SYSTEM IS BROKEN.
Eli Lilly asked me to point you guys to their assistance program, (link is HERE,) but I feel as though that’s a Band-Aid. Let’s work to fix the problem at the core.
Is anyone working to fix the problem?
Lilly insists they are. They already made a trip to Washington last month bringing light to the problem the Pharmacy Benefits Managers are giving them. The PBM’s are being put under a microscope and I think that can only be a good thing. Hallelujah! I’m thankful Lilly is taking strides to incite change. I encouraged them to be vocal about what they are doing. Our community feels so helpless right now.
We need hope.
Lilly is working with the other insulin companies to eventually meet with government agencies for change. They admit though, as large as they are, they are nothing compared to the insurance industry.
“Then you need allies!” I said. “Work with other manufacturers of life-sustaining drugs. Insulin and other drugs that keep people alive should be in their own class. There should be laws to increase accessibility and protect pricing .”
What would the rule be? Maybe, if a patient starts to die after 48 hours without the drug, it goes into a “Life-saving Drug Class.” And because of this, patients would be protected from price gouging. The more people fighting the better. I think Lilly, Novo and Sanofi are doing themselves a disservice working alone. The bigger the voice, the better chance for change.
And what about us? We want to help! One of the things Lilly brought up is the fact that we need more voices, no one is fighting. He pointed to six years ago when insurance companies began to say they weren’t going to cover one insulin, and patients needed to switch to another insulin, most patients just switched. There was no big fight. (Never mind these families were backed into a corner and most didn’t know they could fight, but whatever…) The Diabetes online community is ready to fight now. We need a place to channel our voices. Where can we do that?
They didn’t have an answer for me, but later we were encouraged to speak to our congressmen and senators. Bernie’s onboard. We need everyone else on board too.
My main message to Eli Lilly yesterday was this: The ramifications of what is happening are more far reaching than they think. They believe people aren’t paying the full list price of insulin, but they are. Many MANY people are, and family’s lives are in ruin because of it. High deductible plans have run rampant the last couple years. Deductibles are just going to get higher. People are suffering, and it is real and far more prevalent than they think. I appreciate their savings plan that offers assistance, but this is too big for that to make the difference we need. Change needs to be wrought now, there is too much at stake for my children, and my friends, for us to let things continue as they are. I shudder to think what the state of our country will be in a few years with health care going in the direction it is. The wave has begun to rise and it’s building steam…what will the crash of that wave bring? I personally know families that can’t afford insulin. Literally they have to skip a mortgage payment to pay for insulin. I personally know people who ration their insulin. They use less than their bodies need because they can’t afford it.
That keeps me up at night.
It is wrong.
I’m sorry that the insulin companies were forced into a corner and had to make hard choices to keep their products in the market. But those choices had consequences…as all choices do.
And in this circumstance, those consequences are dire.
We need change. And we need it now.
(Disclosure: Eli Lilly did not ask me to write a blog post. Every opinion in this piece is mine and mine alone. I think that's pretty obvious, but I thought you should know. Also, when I met with them they bought me a Diet Coke. Disclosure complete.)