How to Manage the Rising Costs of Insulin
Modern medicine has made a big difference in many lives. Some drugs can actually cure or treat the disease. But most drugs relieve the symptoms of illness and don’t fix the problem, Moreover, most have side-effects that limit their usefulness. Case in point: antibiotics and antidepressants.
- Antibiotics work well for acute and chronic infections, but are often used improperly, causing problems with mitochondria, and gut bacteria.
- Antidepressants help people feel better, when used appropriately – before they were available, people just suffered – but they also deplete the normal neurotransmitters.
We also have great pain medications, but every one of them has terrible side-effects and should not be used long-term. However, one drug stands out among all the others as a real benefit, not just relieving a symptom, but actually restoring function to the metabolism: INSULIN.
Insulin is not a drug; it’s a hormone. It is the metabolic hormone that allows nourishment to your cells. Cells in the body need amino acids to make proteins, and glucose (sugar) to make energy. Insulin is the hormone that lets them in. It is the key that unlocks the door, allowing the cell to take up both amino acids (protein) and glucose (sugar). This is very important because if you don’t have insulin, then you cannot get significant amounts of these nutrients into your cells and they will shrivel-up and die of starvation. You could eat all the food you want, but you would still die of starvation. That’s what happened to people with diabetes (what we now call type 1 diabetes mellitus – or T1DM) before the discovery of insulin.
Over the last 100 years since the discovery of insulin and its connection to diabetes, millions of lives have been affected by this one substance. There are now multiple patented insulin-like drugs that mimic the action of insulin but have different effects. Some bind very strongly to the insulin receptor, and stay around all day; others work very quickly and disappear. All of them require injection into the body because they are broken down in the intestine if ingested as a pill. The exception is for one inhaled version of insulin that can be taken-up in the respiratory system and used in the body.
The Trump-Biden Football Game
However, there is a dark side. Because it is one of the few “drugs” necessary for life, insulin has become a political football.
In July 2020 President Trump signed four executive orders that affects drugs, and specifically insulin. In essence They demanded:
- Federally Qualified Health Clinics would provide insulin at cost.
- Medicare programs would pay the lowest price on the international market.
- People would not be prevented from buying their insulin (and other drugs) from other countries.
- Rebates (kickbacks) to Pharmacy Benefits Managers would be eliminated.
The first Executive Order regarding insulin was published by the Federal Register on December 23rd. The stated purpose was to help those who are low-income, without insurance or have a high share-of-cost for their health care. The EO states:
“The list price for a single vial of insulin today is often more than $250 and most patients use at least two vials per month…”
“This final rule establishes that health centers receiving funding under section 330(e) of the PHS Act are expected to offer insulin… at or below the price the health center paid through the 340B Program, plus a minimal administration fee,”
Thus, the actual executive order does not regulate the cost of insulin, only that these clinics offer it at or below their cost of acquisition with a minimal administration fee. This doesn’t apply to pharmacies or private clinics, unless they receive federal funding as an FQHC.
When a new president takes office, the Executive Orders that have not been implemented are often suspended. Thus, when President Biden took office, he suspended all that President Trump had done, including this executive order.
I suppose it would be good to briefly discuss what an executive order is. The president of the United States has the tremendous job of executing all the laws made by congress. One of the “checks and balances” of the system, is that the president can choose not to enforce or execute certain laws. Also, because there are so many laws a huge bureaucracy has been created to administer them. The president writes executive orders to tell them what to do. The executive orders do not apply to individual citizens, only to those who work for the President of the United States. He is like the CEO of a very large corporation. He cannot dictate what the general population does, except as the laws enacted by congress are administered.
In this case, the president told clinics under federal controls to give insulin at or below their cost, which only affects those who use these clinics.
The Actual Cost of Insulin
Why has insulin become so expensive? There is a complex system that determines the cost of drugs in the United States. Drug companies, health insurance plans, and pharmacy benefits management companies (PBMs) all work together to raise the prices. Everyone makes more money if there is a higher price, so there is no incentive to lower prices. You might think that insurance companies, or PBMs want lower prices, but they make a percentage of what is bought and sold, or bonuses on what is written-off so the higher the price, the more they make. The government is not allowed to be part of that negotiation. 
Since insulin is necessary to sustain life, it is perfect for price increases. People will pay anything because they need it. The insurance companies know this, and since they make money based on how much they discount prices, they have an incentive to keep prices high. The manufacturers of insulin have stated that they could drop prices by almost 90% and still be profitable.So, about 90% of the cost of insulin is due to insurance companies and pharmacy benefits managers.
For these reasons, the cost of insulin has been increasing much faster than inflation. The cost of insulin has doubled since 2012. People without insurance who have diabetes, on average, spend over $10,000 per year on diabetic supplies, including insulin.Over the last twenty years, it has increased more than 15% per year. The United States represents about 15% of the market, but generates about 50% of the revenue.
Making Sense Of It All
It makes sense, then that President Trump would sign executive orders allowing acquisition of medications outside the United States and preventing PBMs from getting kickbacks. These two things will affect many more diabetics than the EO requiring FQHC’s to sell insulin at cost, because that cost is still high. He cannot in any way regulate the prices, except by allowing competition. Since the companies work on a global scale, then competition can work on a global scale. The four executive orders that were initially signed in July 2020, are now under a new chief executive. Federal agencies are not required to follow the orders of a previous chief. Their new boss will tell them what to do, and these orders are, in essence, rescinded, or at least on hold.
What does that mean for those with diabetes? Continued increases in cost. Even people with insurance pay out-of-pocket around $2,500 per year for diabetes supplies. Those without insurance can pay over $1,000 per month for insulin. The same vial of insulin that costs $360 in the United States is sold for $32 in Canada. Indeed, the world has become much smaller, and we can look to resources all over the world, as long as it’s legal.
While President Joe Biden would do well to allow competition to lower the prices of insulin, he does not have specific control over its actual cost. Moreover, whether FQHC clinics offer insulin at cost does not affect the price of insulin in the United States. All the rhetoric from pundits about President Biden causing insulin prices to go up is just not true. It is a shame that politicians continue to play games with people’s lives, we thought such things would end with World War II. It’s also a shame that our government does not seek the benefit of the people of the United States who have diabetes, but rather drug companies, insurance companies, and pharmacy benefits managers. Perhaps we could all encourage President Biden to institute these same orders.