On Dec. 10, the US House Committee on Oversight and Reform released its final report after a three-year investigation into pharmaceutical pricing and business practices in the United States, with a focus on the three insulin manufacturers that control 90% of the global market. The report comes at a time at which insulin advocates and state leaders have worked to cap the co-payment for insulin for those with insurance under the Build Back Better Act.

In the United States, 32.4 million Americans have diabetes, and one in four diabetics report rationing insulin due to affordability issues. Eli Lilly, Novo Nordisk, and Sanofi have drastically increased the list price of insulin over the past two decades, but have made no change in their formulas.

Big Pharma report
Twelve drugs and ten companies in total were investigated, and it was found that these companies raised prices on those twelve drugs over 250 times, to a cost that was about 500% greater than when they were initially introduced to the market. It was found that drug companies "aggressively" raised prices to meet revenue goals, while executive compensation arrangements created motivations to raise prices.

"The Committee's analysis found that taxpayers could have saved more than $25 billion over a five-year period for just seven of the drugs investigated — Humira, Imbruvica, Sensipar, Enbrel, Lantus, NovoLog, and Lyrica — if private Medicare Part D plans had obtained the same discounts as other federal health programs that are empowered to negotiate," read the report.

According to the report, drug companies target the US market for higher prices while using the Medicare program to increase revenue, all while maintaining or reducing prices across the rest of the globe. Those who are under Medicare Part D plan have no option to negotiate drug pricing.

The report mentions that Medicare Part D plans have significantly smaller rebates when compared to other federal health care programs, and that if those plans had obtained the same discounts as other federal programs for the three most used insulins (Lantus, Humalog, and NovoLog), then Medicare could have saved over $16.7 billion from 2011 to 2017.

The report stated that Medicare accounted for over 41% of insulin sales from Novo Nordisk in 2014. An internal Novo Nordisk presentation slide in Oct. 2013 said, "Part D is the most profitable market for the Novo Nordisk insulin portfolio."

Novo Nordisk, Sanofi, and Eli Lilly have engaged in strategies that suppress competition to maintain monopolies over the market, according to the report. Strategies include aggressively marketing to patients and physicians, forcing patients to product-hop or switch medications, and contracting with pharmaceutical benefit managers (PBMs) and insurance agents, which prevents competitor products from receiving rebates and discounts.

"The three insulin companies have engaged in strategies to maintain monopoly pricing and defend against competition from biosimilars," read the report.

In addition to forcing patients to switch medications, the three insulin manufacturers have engaged in shadow pricing, which is raising drug prices in synch with competitors, or, each other. According to the report, senior executives at all three manufacturers have encouraged shadow pricing.

"In a discussion among Novo Nordisk employees about an Eli Lilly price increase for a different diabetes product on December 24, 2015, a Novo Nordisk pricing analyst remarked, 'maybe Sanofi will wait until tomorrow morning to announce their price increase... that's all I want for Christmas.'"

Insulin price hikes
The United States accounts for 50% of global insulin revenue, even though it only accounts for about 15% of the global market.

In 1996 the price of Eli Lilly's Humalog was $20.82 per vial, but it's currently priced at $274.70, according to the report. From 1996 until 2017, the price of Humalog increased over 1,200%, and in 2019, Humalog generated $1.67 billion in net revenue in the US.

In 2001 Novo Nordisk's NovoLog cost $39.75 per vial, but it now costs $289.36 for the exact same vial. Since 2001 Novo Nordisk has increased the price of Novolog 28 times, resulting in a cumulative price increase of 628%, and in 2019, the company generated $1.18 billion in net revenue in the US.

Sanofi's Lantus, a long-acting form of insulin, was priced at $34.81 per vial in 2001; however it is now priced at $283.56. In 2019 Sanofi generated $1.14 billion in net revenue in the US from this medication.

Investigation recommendations
"The Committee's investigation shows that uninhibited price increases have fueled corporate profits and executive compensation and that drug companies raise prices in order to meet revenue targets. Data obtained by the Committee undermines claims by the pharmaceutical industry that rebates provided to PBMs are the primary driver of price increases," read the report.

The report also indicated support for both Medicare negotiation and an inflation penalty, which would be applied when a manufacturer raises drug prices faster than the rate of inflation. Both recommendations are present in the Build Back Better plan.

Insulin4All
Washington's Insulin4All chapter advocate Kevin Wren met with Sen. Patty Murray (WA), Sen. Tina Smith (MN), and Rep. Anna Eshoo (CA) on Dec. 7 to discuss Build Back Better. Wren was diagnosed with type 1 Diabetes in 2001 at the age of 15.

"I first rationed insulin in 2009. I was underinsured and I was working two jobs just out of college," Wren said. "The price for my insulin was over $1,000 for one month's supply, and that's well beyond my means. I kind of gambled with my life as many diabetics have done, and rationing insulin is a living nightmare.

"Food is poison and your blood turns to acid. It only takes a few days before you succumb to ketoacidosis. So many have. I've been hospitalized for days with it. It's painful and it's awful. I was fortunate to survive because I was able to access my dad's insulin. I was fortunate to have a parent with diabetes."

Sen. Murray mentioned that too many diabetics are torn between paying for their essential needs or paying for their life-saving medication.

"I've heard from people in my state who have insurance, who worked their whole lives, who saved their money, but still had to work an extra job and move in with their family so they could afford their insulin," Murray said. "I know of college students who have rationed their insulin and put their own life at risk just to try and make ends meet."

She brought up how COVID-19 has been a critical reminder to how crucial affordable healthcare is.

"People need insulin to live," Murray said. "No one should have to choose between their insulin and necessities like food, or housing, or childcare, or anything else. People fighting diabetes have enough to worry about without constantly dreading the question: How in the world am I going to pay for this?"

Sen. Smith also brought up how every day she hears of Minnesotans who are struggling to pay the price for their prescribed medications and acknowledged how Americans are forced to pay three times more for their medication than people in other countries.

"Drug companies raise the price of drugs like insulin year after year, with no other reason than that they can," Smith said. "Even during this pandemic, drug companies raised the price of prescription medicines, more than one thousand prescription medicines. The Build Back Better Act will finally give Medicare the authority, the mandate, and the tools to negotiate for lower prices for certain medications, including insulin."

The Build Back Better Act would reduce the cost of prescription drugs by allowing Medicare the option to negotiate drug prices. In addition, it would place a co-pay cap on insulin at $35 per month for those with private and public insurance.

"It's dehumanizing not being able to afford insulin," Wren said. "Our desire to live is exploited and extorted by pharmaceutical manufacturers Eli Lilly, Novo Nordisk, and Sanofi. I think Build Back Better will make great strides in holding them accountable for the price increases that have incurred over the years."

Democrats are hoping to pass the Build Back Better Act by Christmas.