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EDITORIAL: What Eli Lilly's new insulin says about our health care system



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What right does an individual have to access their lifeline? For those who require insulin, that access may have became much easier.

Eli Lilly and Co.’s move to sell their fast-acting insulin at half its original price is encouraging, but reminds us how broken the American health care system truly is.

The decision to roll out its new, generic Lispro insulin was announced March 4 as a continuation of Lilly’s commitment to “lower out-of-pocket costs for people who need insulin”. The new Lispro will contain the same molecule as Humalog, a common, pricier fast-acting insulin. Lispro will sell for $137.35 per vial.

This new price point is reason for celebration, but it also seems that it easily could’ve came sooner.

A 2018 study produced by BMJ Global Health estimated the cost of production for human insulin to be between $2.28 and $3.42, whereas analog insulin is between $3.69 and $6.16. Lispro, and the similar Humalog, are analog insulins.

Those numbers are fairly shocking to those unfamiliar to the pricing of insulin in the U.S., but are far from surprising for those who have either required the drug or know of someone who has.

Why such a steep cost? Many members of the industry commonly blame the cost of research for the high expense to consumers. Lilly’s former CEO, John Leichleter, once said about insulin doses: “Yes they can be expensive, but disease is a lot more expensive.

This is true, but what also must be considered is the continued price hike made by Lilly on Humalog. Individuals wouldn’t have to ration their insulin use or cut costs in other areas of their lives so often if not for the price inflation. Considering the storied increase, what reason does Lilly have to roll out a new, cheaper alternative at this particular moment?

Andrew Ching, a professor at Johns Hopkins University’s Carey Business School said in the L.A. Times Lilly can fend of critics "by offering a cheaper version."

“By keeping the branded version, it allows them to keep charging a high price to the segment of consumers who are willing to pay more,” Ching added.

Many of the individuals who are skeptical of the quality of Lispro may continue to pay more out of uncertainty about its quality.

While research costs and price hikes stand between consumers and insulin producers, there’s another large reason at play.

Pharmacy benefit managers are individuals hired by insurers and large employers. They create lists of drugs with their price to patients and negotiate with drug makers about lowering prices.

According to the American Pharmacy Association, PBMs “offer programs that provide value and flexibility to participants to help control prescription costs.” While true, the improved financial outcomes they create oftentimes benefit those other than the patient.

The two largest PBMs, as of 2016, were Express Scripts and CVS Caremark. The exclusions they make on their “formulary exclusion lists” compile more drugs each year, gaining leverage between drug companies about which products they will sell. This makes for certain insulins brands' pricing to rise much more than the year prior.

Steve Miller, chief medical officer of Express Scripts,  has even described the yearly rise in insulin prices as “extravagant”.

It’s undeniable that the release of Lispro will serve as a temporary renege from price gouging for patients dying due to the cost of insulin. However, it is not a sustainable solution. A much larger-scale reconsideration must take place about health care in America, and this exact issue shows us the state of disrepair it is in.

Studies on drug costs, coupled with Americans voicing their concern on the matter, lead to such a product entering the market. What must be done now is more work to make insulin, and other crucial drugs, more affordable.

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