By Trisha Malhotra
A diabetes patient, Laura Marston, recalls her mother paying $25 for her first-ever vial of Humalog in 1996. Humalog is the brand name for a type of insulin. The same dose costs $296 in 2021. Drug companies in the US have virtually unilateral power to name their own price. To add to this, there are just three main manufacturers dominating the global supply of insulin, all of whom reside in the US and keep prices excruciatingly high. Without significant competition, and no regulatory body stepping in with negotiating power, there is nothing compelling these companies to lower their prices.
Why is insulin so expensive?
So why doesn’t the government step in? Industrialized countries like Denmark, South Korea, Austria, and Canada have stringent regulatory bodies that aggressively negotiate the prices of drugs before approving them for sale. Why is it that, in the US, the government is far less involved? There is one federal clause behind all this: Medicare Part D. In layman's terms, this clause prevents any governmental body from setting prices or negotiating the cost of drugs in Medicare Part D. Part D is a private plan that covers prescription drugs, including your insulin.
The reason this clause still remains valid is multifold, and will probably require both us and you to have law degrees to break down. To boil it down, there are people with reasonable arguments on both sides, those that are pro-government-involvement and those that are anti-government involvement. While this decade-long debate ensues in the US, as of now, pharma companies need only assess their drug’s effectiveness against a single placebo rather than other pre-existing products. After they do this bare minimum, they pick the price. Government negotiating remains explicitly illegal.
On the side of the people, insurance companies remain responsible for drug-pricing negotiations. With relatively little leverage against scaled-up prices, they are notoriously bad at it. Drug manufacturers also have lots of reasons to push the prices sky-high, one of which is paying off shareholders who invested with the promise of walking away with some of the biggest stock market profits. Imagine being in the shoes of one of these pharma executives. Your goal is to optimize your short-term profits. Hiking up the price of a drug like insulin, with millions of patients in dire need of life, seems like a sound strategy even if it has unsound morals.
Insulin cost per month in India
In India, the situation is just as bad. With an ethically ambiguous supplier, both the unaffordability and the scarcity of insulin have destroyed lives. In 2016, a study in Bengaluru evaluated how financially accessible insulin is to both public and private sectors. The conclusion was that the lowest-paid unskilled member of society would have to pay anywhere between 1.4 to 9.3 days’ wages so they could buy a month‘s worth of supply of insulin. Even those segments that are relatively well off pay a chunk of their earnings each month to afford what is akin to oxygen to a diabetic patient.
The Quint captured the case of 38-year-old Harsh Kohli, a type 1 diabetes patient, who has struggled with the condition since the age of 11. Kohli bears the expenses of him and his diabetic son (aged 7). The monthly costs of insulin analogs (a version of insulin that seems to provide better results than other forms) rack up to a minimum of ₹7000, which costs nearly ₹85,000 each year. That’s not all. Diabetes requires regular checkups, kits, and the purchase of other devices which need to be accounted for. Diabetes patients in India can spend an average of ₹1 lakh each year just to survive.
The Bottom Line
There is also the case of insulin being overprescribed. While it is similar to a pump being given to asthmatics, diabetes needs to be thought of as on a spectrum. A pre-diabetic individual can manage their condition with a healthy lifestyle. In most cases, they need not make the monthly investment in insulin analogs like Harsh and his son. However, pharma companies are not compelled to push this narrative to the public. At least in the US, what looks like an insulin epidemic seems to have arisen. The same epidemic seems to be sprouting up in India with insulin turning into the top-selling drug in recent years on end. So, with this journalistic backdrop, doesn’t it seem like bad advice to tell your diabetic relative to get on insulin? We’ll let you be the judge.