INSULIN IS UNAFFORDABLE FOR DIABETIC PATIENTS: WHAT IS GOING ON WITH DRUG PRICES!
HEALTH POLICY BLOG
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By Reza Ghafoorian, MD, Esq.
Drug prices, like everything else in health care, continue to increase each year. Recently, both chambers of Congress have warned pharmaceutical companies about increasing drug prices. There is strong bipartisan consensus that there must be something done to rein in out of control price increases.
Republicans and Democrats on the Hill are conducting sweeping investigations of drug industry price practices. Elijah Cummins, D-Md., Chairman of the House Committee on Oversight and Reform has already announced sweeping investigation of drug industry pricing practices, sending detailed information request to 12 major manufacturers. Senate Finance Committee, led by Chuck Grassley, R-Iowa, has also begun its own investigations into drug prices. In an interview, Mr. Grassley said “I have heard stories about people reducing their life-saving medicines, like insulin to save money. This is unacceptable and I intend to specifically get to the bottom of the insulin price increased.”
The price increases of insulin are particularly a sensitive issue because patients depend on the drug to try to maintain normal sugar levels and avoid complications of diabetes, including heart problems, blindness and amputation.
Insulin prices nearly increased 200 percent from 2002-2013, according to the American Medical Association. The annual cost of insulin in 2012 was $2,900 US. By 2016, the annual cost had increased to about $5,700 (a 97% increase in four years). For this reason, many Americans resort to purchasing their insulin from Canada which has a better handle on controlling drug prices for its citizens.
A handful of companies dominate the insulin market including Novo Nordisk, Sanofi and Eli Lilly and there is currently no generic form of insulin in the US market. In support of these companies and against a government crackdown on drug prices, the Pharmaceutical Research and Manufacturers of America has stated that insulin price spikes of a few years ago stabilized in recent years and Government price regulation will stifle innovation and deprive patients of timely access to innovative medication.
Insulin was isolated and patented in 1920’s by Dr. Frederick Banting and his colleagues. Dr. Frederick licensed the patent for only one dollar, essentially donating the drug to the public. Regardless of the selfless act by Dr. Frederick and his colleagues, insulin prices continue to rise each year. This is because, today’s insulin is different from its initial isolated form. For decades, insulin prescribed by doctors was derived from animals and injected with a very basic needle and syringe. Today, different modes and manufacturing are used to make insulin, including manufacturing the drug in bacteria using biotechnology and gene expression techniques. The delivery system is also different. Instead of needles and syringe, insulin in injected using pumps, pens and other methods. The new drug formulas, manufacturing methods and delivery devices protected by patents or other rights are partially responsible for causing increase in insulin prices.
The business of insulin and its accessories has proved lucrative for drug and device manufacturers. Although it is easier to understand the incentives behind for-profit drug and device manufacturers for focusing on treatment rather than cure of diabetes, it is not as easy to understand the motivation of charitable foundations in pursuing more lucrative treatment modes over cure options.
Disease-specific charitable foundations, such as Children with Diabetes Foundation, American Diabetes Association (ADA) and Juvenile Diabetes Research Foundation (JDRF) are active in funding and supporting research and development of treatment and devices used by diabetic patients. For example, in 2015, JDFR had twenty-eight industry partners. It had given $17 million to Medtronics to develop glucose sensors, and $4.3 million to BD (a New Jersey-based medical device manufacturer) to fund projects like creating small needles that reduce pain. In 2013, JDRF went the equity route and joined with PureTech Ventures to create a fund to fuel new diabetes start-ups.
About 19 years ago, Dr. Denise Faustman, a 25-veteran professor at Harvard Medical School suggested a potential “cure” for diabetes. Dr. Faustman suggested that bacillus Calmette-Guerin (BCG), a safe generic vaccine against tuberculosis, can rectify the errors in the tumor necrosis factor (TNF) pathway implicated in type 1 diabetes. In 2001, she showed that BCG reversed type 1 diabetes in genetically predisposed mice.
On the basis of her 2001 research, Dr. Faustman approached pharmaceutical, medical device companies and charitable foundations. The pharma industry did not support her research because BCG is a generic drug sold in the market for $1 per shot and there was no money to be made by drug manufacturers in supporting this cure pathway. Device manufacturers did not support her research because without insulin, there would not be a need for insulin delivery devices. Most interestingly, JDFR, world’s largest diabetes charity which spends $100 million a year on research and Helmsley Charitable Trust also refused to fund her research.
For several years, Dr. Faustman’s research remained unfunded until with support of Lee Iacocca, Dr. Faustman raised $9 million to start Phase I clinical trials. In 2012, she published her findings that people with long-standing diabetes had started to make insulin after receiving BCG. In 2018, Dr. Faustman published its latest findings showing long-term reduction in hyperglycemia in advanced type 1 diabetes. Many other trials have been conducted across the world using BCG, including diabetes trials.
Even today after several successful trials, ADA and JDFR are not lending support to Dr. Faustman to conduct her research. In a joint statement, ADA and JDFR cautioned the community to not get “too excited about Dr. Faustman’s research at this point, noting her study’s very small sample size and the fact that ‘the finding prompt thought-provoking questions but not definitive answers.” If JDFR had funded Dr. Fuastman, today we would have had a study with a large cohort to show better results and perhaps a cure. Today, she resorts to crowd sourcing to raise the $25 million+ needed for a larger trial.
In the first quarter of 2018, President Trump Administration introduced “American Patients First,” a blueprint to lower drug prices and reduce out-of-pocket patient costs. In this plan, the Department Health and Human Services has identified four challenges in the American drug market: High list prices for drugs; seniors and government programs overpaying for drugs due to lack of the latest negotiation tools; high and rising out-of-pocket costs for consumers; and foreign governments free-riding off of American investment in innovation.
The President Trump Administration has proposed four key strategies for reform: Improved competition; better negotiation; incentives for lower list prices; and, lowering out-of-pocket costs. These strategies will be implemented in two phases: 1) Actions the President may direct HHS to take immediately; and, 2) actions HHS is actively considering, on which feedback is being solicited.
We are currently far from an effective solution to the egregiously high drug prices. Pharmaceutical and medical device lobby is strong, when the currently proposed plans to control drug prices are weak and lack sufficient details. Yet, we do not have to wait for politicians to do something about the drug prices. We can also influence drug prices by ensuring that our donations find the right home for the right purposes and casting our votes for the right political candidates.
 Politics, On Both Ends of Capitol, Both Parties Warn Big Pharma on Drug Prices, Robert Pear, January 29, 2019
 AP, GOP senator pledges insulin probe as Congress holds hearings, Richardo Alonso-Zaldivar, January 29, 2019