Insulin Makers Respond to Outrage Over Skyrocketing Prices

Insulin Companies on Prices and Access

Novo Nordisk

From the company’s Director of Corporate Branding and Strategy Ken Inchausti:

DM) Since the last time we posed questions in April, what has your company done to help make insulin affordable for us for patients?

KI) Novo Nordisk recently modified the eligibility requirement for our patient assistance program to households that fall within 300% of the Federal Poverty Limit. (As an example, a family of four with a household income of $72,900 could qualify. Remember that U.S. median household income is around $53,000.)

Payers are looking for more rebates and discounts in their negotiations with companies like ours, and our rebates to payers have been increasing over the last several years. However, the out-of-pocket costs patients experience are based on benefit design, not so much the negotiated price of the medicine.

What does it cost to manufacturer one vial of your fast-acting insulin?

We don’t provide a cost-of-goods breakdown on our medicines. That is only one component of cost, and would give an incomplete picture.

What is your list price on your brands of insulin?

Those prices are available via WAC (Wholesale Acquisition Cost) listings, but keep in mind, many patients do not pay list price. Their insulin prices are negotiated by their employers, insurance companies and payers.

We know anecdotally that people are paying upwards of $300/month for their basic insulin. Why does your insulin cost so much?

Again, what a patient pays is determined by the health plan and the employer. Yes, we see a trend toward more patients going into high-deductible plans because either they’re affordable or because that’s all their employers offer. It’s a challenge we’re trying to figure out how to resolve, but we don’t have an answer just yet.

Why don’t you just lower the list price of your insulin?

Changing the list price would affect numerous payers and the relationships we would have with them, but remember that we do not control the entire supply chain of how medicines reach patients. Simply lowering the price of insulin would not be enough.

How do you respond to the EpiPen outrage and how that reflects on insulin pricing?

It shows that it’s a complicated issue, and that medicine access is a difficult topic to explain. More and more Americans are struggling to pay for their healthcare, and sometimes that involves paying for the medicines we make. But they aren’t the same issue – there hasn’t been innovation on EpiPen because it works really well. Insulin has required innovation because we all know the earlier versions were far from perfect. Despite some people diminishing the value of innovation in insulin as “incremental,” we know that many patients are benefiting greatly from these innovations.

Would Novo be willing to work with your insulin competitors to advocate on behalf of patients, to get payers and PBMs to lower the consumer price tag of insulin?

There are a number of reasons that would be difficult to do – most involving how to have that conversation within the scope of legal requirements. However, the ability to lower co-pays or co-insurance is in the hands the payer or the PBM because their clients (employers) play a role in how insurance is designed. Sometimes one insurance carrier will have different plan offerings based on their clients’ budget. So speaking to the payer and PBMs is not enough.

What we should also be talking about with these customers is what we can do to lower the cost of diabetes care in general, not just on the pharmacy benefit side.

What would you want the payers and PBMs to know?

They hear this from us already, but we would like them to consider taking a more “open access” approach to their formulary designs. Creating exclusions creates a lot of chaos for patients when they have to switch medications.

What would you want the Diabetes Patient Community to know?

We know that patients are struggling to pay for their healthcare, and sometimes that involves paying for the medicines we make. We hear it every day in our call center and we see it online. We have a team of people talking to payers, PBMs, policymakers, and others who have a say in how healthcare is delivered in the U.S.

Sanofi

From Sanofi, we received an initial statement from the PR team followed by specific answers from spokeswoman Susan Brooks:

“Sanofi understands the challenges of patient access and affordability for medicines, and we are committed to helping patients get the treatment that they are prescribed by their healthcare professional. We are committed to working in partnership to address patient affordability for our products.

“As part of our efforts to address these challenges, Sanofi has invested $1 billion over the past three years to develop and execute innovative, creative solutions with long-term impact to help people living with diabetes. Some examples of this are patient education as well as healthcare professional education, and direct assistance to patients through support programs, such as the Sanofi Patient Connection. We have also significantly increased the amount of rebates paid to PBMs and insurers over the past few years to remain included on formulary at a favorable tier that provides an affordable out-of-pocket cost to patients.“

DM) What has Sanofi specifically done to address this issue since it came to the forefront in Spring?

SB) We have had continued open dialogue with advocacy organizations and professional groups to find solutions to collaboratively address this issue. As a result, we have enhanced our efforts to connect patients with available resources that provide cost relief through our relationships with advocacy and professional groups. This helps to increase utilization of existing resources for which patients may not know they are eligible.

You mentioned the Patient Assistance Programs, which are great… but what resources exist for the under-insured or those on federal programs like Medicare/Medicaid who typically don’t qualify for that assistance?

In addition to providing medications at no charge for qualified patients, Sanofi Patient Connection (SPC) also helps the uninsured with access and affordability challenges. Nearly half of the annual work effort for the SPC program supports patients with diabetes in the navigation of their health insurance coverage such as benefit verifications and prior authorization support. Through the “SPC Education Center,” our counselors provide patients with information and support on accessing health insurance coverage via Medicaid and/or the Health Insurance Exchanges.

Federal regulations prohibit the eligibility of Medicare and Medicaid patients in branded co-pay assistance programs. However, SPC can provide medication at no cost to Medicare Part D patients who meet program eligibility requirements specific to this patient population. Patients can obtain more information and download a program application here.

It is also important to note that we provide Lantus to Medicaid at a 100% discount.

What is your list price of insulin that starts the negotiation process with payers?

While we understand that the publicly visible “list price” of pharmaceuticals is of interest in any discussion of healthcare costs, Sanofi is more focused on the affordability of our products for patients. Although some patients are exposed to the list price of their treatment, their out-of-pocket expense is to a much greater degree impacted by their insurance benefit design. Recent cost-shifting to the consumer by insurers through insurance design changes should be a key element of any discussion about the affordability of pharmaceuticals for the patient.

Would Sanofi be willing to sit down with your competitors in insulin manufacturing, to discuss with PBMs and insurers how to better address this issue?

While the extent to which we can have pricing discussions with our competitors is limited, we feel strongly that the healthcare industry value chain has to come together to address this collaboratively. The issue of affordability is one we are continuously working to address.

What would you want patients to know?

Sanofi works closely with payers to help ensure patient access to our medicines. We have significantly increased the amount of rebates paid to PBMs and insurers over the past few years to remain included on formulary at a favorable tier that provides an affordable out-of-pocket cost to patients.

Lilly

Statements from Lilly Diabetes spokeswoman Julie Williams, obtained in two parts, read:

“The reasons some people are experiencing higher out-of-pocket costs for their medicine are complex, and go beyond the medicine’s list price. The primary reason is the advent of new insurance plan designs – particularly the increased use of high-deductible health plans, which shift the costs to the consumer.

“Over the past few years, some people have moved from traditional co-pay insurance plans (where members paid predictable co-pay prices for prescription medicine) to high-deductible or co-insurance plans, leading to higher and unpredictable costs for consumers for extended periods of time. This means someone with a fixed co-pay for a medicine on a traditional plan now faces paying the ‘list price’ – which can be hundreds of dollars per prescription – until they meet their deductible. The deductible is often several thousand dollars. Lilly provides steep rebates, but they are not passed down by PBMs to people in high-deductible plans. This is something that needs to change.

“Discovering, developing and manufacturing insulin is very expensive and scientifically precise. We have invested billions of dollars in the discovery and manufacturing of insulin: from introducing the first commercial insulin in 1923, to the first human biotech insulin, to the first insulin analog, to a recent $1 billion expansion of our insulin manufacturing capabilities. These investments allow Lilly to develop new therapies that improve the lives of all people with diabetes and meet the growing demand for diabetes treatments.”

“Note that the IMS Health Institute (that tracks branded drug prices) reports that in 2015 nearly half of the $10.1B invoice price growth (for all medicines) was for insulin, but the increase was offset by rebates and price concessions.

“From 2010 to 2015, Lilly’s net price for Humalog, our most commonly used insulin, increased an average of 1.6 percent per year, and our net price for all insulin treatments combined increased an average of less than 5 percent per year.

“The high-deductible plans create much higher out-of-pocket costs than necessary for people using insulin. But we do offer some solutions:

• Our Lilly Cares program – for those who qualify – provides assistance to people who are struggling to afford their medications. In 2014, Lilly provided $530 million in medicines to more than 200,000 patients to ensure they have access to the medicines they need.
• For many of our medicines, we also offer co-pay assistance programs to help offset a portion of these higher out-of-pocket expenses in the form of savings cards.
• We also are actively involved on several fronts with many important leaders in the Diabetes Community to find solutions to the issues the community is facing.

“Over the last three years, The Lilly Cares Foundation gave qualifying people more than $378 million in diabetes medicines donated to it by Lilly. Most of the medicine ($375 million) was insulin. The Lilly Cares Foundation supported 39,000 people with diabetes in 2015.”

“Additional diabetes medication support was provided to Medicare Part D members and the Diabetes Camp Care program totaling $29 million over the past three years. People in the Medicaid program can purchase insulin for no more than $6 per month.”

“We’ve had numerous conversations with key stakeholders across the Diabetes Community, including key thought leaders and advocacy groups. People have had their prescription medication costs shifted to them more than other areas of healthcare. People with insurance today pay, on average, about 20% of their prescription drug costs out-of-pocket compared with about 5% of their hospital costs. Until the reimbursement models change, these issues will continue to exist.”

“Unfortunately, there are no easy solutions – particularly for people with high-deductible health plans. We are working very hard within our organization and with other parts of the healthcare system to discuss solutions. In order to help the most people in need, any solution will likely have to involve other industry members, payers, and the advocacy community. We will continue having discussions with key stakeholders within the health care system to identify solutions to this complex issue.”

Express Scripts Calls BS

It’s probably naive of us to think Big Insulin would reveal anything more than their current Patient Assistance programs and “conversations” they’re having… so we also reached out to leading PBM Express Scripts for their POV here.

And what do you know? They called BS on the above responses, saying it is the list price set by the manufacturer that is a big part of the drug cost — and that the insulin-makers are trying to one-up their competition by driving up list prices, even while offering payers and PBMs better discounts to ensure their products are covered in insurance formularies.

“It’s unconscionable when these price hikes happen, and the finger-pointing and blame game is just a distraction from what’s really going on,” says David Whitrap, Senior Director of Corporate Communications for Express Scripts. “It’s not the PBMs that are raising the prices of these drugs. It’s up to the manufacturers to show better judgment. They would do just as well by lowering their prices and offering smaller discounts to us. We’re indifferent to that, and our model is indifferent to that.”

According to Whitrap, Express Scripts has worked in other drug classes outside of diabetes to use competition so that manufacturers will lower their prices to get better coverage or access to patients. But that hasn’t worked in the insulin arena, where the opposite effect seems to happen. He sees the impending emergence of biosimilar insulins — Lilly’s Basaglar being first once it’s launched late this year — as having the potential to change the pricing model for insulin, but it’s too early to know just how that will play out.

(Stay tuned for our full interview with Express Scripts and on this Payer POV coming soon.)

Til It Hurts

It’s very frustrating that everyone on the decision-making end seems content with the message that out-of-control drug pricing is too scary and complex an issue for them to solve, and it’s really more someone else’s fault anyway… that even if they agreed to come to the table (which they haven’t), it wouldn’t do any good because other, more guilty powers are not on board.

In the end, those of us whose lives rely on insulin (and countless other medications) are left holding the bag here, while insurers, drug manufacturers, and PBMs simply say “we’re working on it” and continue raking in disproportional profits.

It’s infuriating and emotionally draining for patients, to say the least.

Thankfully, advocacy is happening and every little bit helps, like a recent blog post from D-Mom Meri who calls for us all to Rise Up; we echo her thoughts.

All we individual patients can really do is assert consumer pressure by raising our voices, which we intend to keep doing, ’till it hurts.