Washington – When Sens. Richard Blumenthal and Elizabeth Warren surveyed the nation’s pharmacies, they found most of them failed to stock a lower-cost “authorized generic” form of insulin that could help many of the nation’s diabetics.
The Democratic senators also revealed the weaknesses in a drug industry tactic of selling a cheaper form of their brand name drug in the hopes of blunting public outrage over the high cost of medicine.
Last March, under political pressure to cut the price of the life-saving drug, Eli Lilly pledged to distribute a generic form of its brand name, $300-per-vial insulin drug, Humalog, at half the price.
At the end of the year, Blumenthal, D-Conn., and Warren, D-Mass., found that Lispro was not available in 83% of the pharmacies surveyed and many pharmacists were unaware of, or not adequately informing their customers, about the availability of the lower-cost Lispro. The senators had commissioned a survey, by telephone, by their staffs of nearly 400 pharmacies.
“It’s a bait-and-switch,” Blumenthal said. “Eli Lilly boasted about its generic and failed to make it available.”
Eli Lilly said Lispro was used by more than 67,000 Americans in November, and 50,000 in October. That’s a fraction of the 7.4 million Americans with diabetes who use some form of insulin, which keeps a diabetic’s blood sugar level from getting too high or too low.
The drug company says more Americans are not using Lispro because pharmacy benefits managers and health insurance companies don’t prioritize access to lower-cost drugs, preferring instead the rebates they receive from drug manufacturers such as Lilly for more expensive brand-name drugs.
“Like Senators Warren and Blumenthal, Lilly would like to see even broader use of Insulin Lispro because it’s a real solution that lowers co-pays for people living with diabetes,” the company said. “But the senators’ paper fails to identify the system challenges that have inhibited access of this new lower list price option.”
Unlike true generics, which are produced by competing drug companies, authorized generics are sold by the original manufacturer at a discounted price. The authorized generic has marketing exclusivity until the original brand drug loses its patent, which means the drug maker maintains its monopoly for that drug.
The Food and Drug Administration has a list of more than 1,200 authorized generic drugs, including Zoloft, Lipitor and Lopressor.
In the case of insulin, a drug that was first produced 100 years ago, drug manufacturers have kept their patents and generic companies at bay by making small changes to their products.
Three pharmaceutical companies — Sanofi, Novo Nordisk, and Eli Lilly — dominate the insulin market, producing more than 80% of the global insulin supply.
“These companies have taken advantage of limited market competition by steadily hiking insulin prices, even though experts estimate insulin could be profitably produced for $7 to $11 per patient per month,” the Blumenthal-Warren report said. “The cost of insulin has risen by over 1,200 percent since the 1990s.”
The report said that at least 12 Americans have died as a result of rationing insulin in the past three years, and roughly one in four patients with diabetes have reported skipping doses or rationing their intake due to the high price of the drug.
On average, diabetics use two to four vials per month, meaning those without insurance face costs of more than $1,000 per month without rebates or discounts.
And those with insurance may face steep co-pays.
Eli Lilly said insurers are using rebates from drug companies to lower premiums for all of their customers instead of lowering co-pays for chronic medicines like insulin.
“It’s why payers prefer higher list priced, higher rebated products,” Eli Lilly spokesman Gregory Andrew Kueterman said.
He also said wholesalers and pharmacies “solely decide whether to distribute or stock Insulin Lispro.”
“They are well aware and have access to Insulin Lispro,” Kuterman said.
Blumenthal dismissed the pharmaceutical company’s argument.
“Eli Lilly is blaming everyone but itself,” he said.
He said he and other Democrats will keep pressing Eli Lilly and other makers of insulin to drop their prices.
“Insulin is a life-saving drug that is necessary for survival, ” Blumenthal said. “It’s not a luxury or convenience folks can live without.”
Meanwhile, America’s Health Insurance Plans, a health insurer trade group, said the promotion of authorized generics like Lispro is “a distraction” that does not result in any savings to consumers.
“Now the Big Pharma company has two drugs on the market – the original, high-priced brand, and the lower-cost generic alternative,” said AHIP spokeswoman Catherine Donaldson. “It still has the corner on the market. And it wins regardless of which drug the consumer chooses.”
She said she appreciated that an authorized generic offers a lower-priced alternative.
“But why not simply drop the price of the branded drug so everyone can save?” Donaldson asked.
In Canada, insulin is sold at about one-tenth of the list price in the United States. Last month, the Trump administration proposed regulations that would allow states to import cheaper prescription drugs from Canada – but it excluded insulin and other complex biologic drugs.
Congress has also faltered in its attempts to rein in the costs of pharmaceuticals, which continue to rise.
On New Year’s Day, Bristol Myers Squibb, Gilead Sciences, Biogen and other drugmakers increased list prices on 50 drugs, by a median of about 5%. Additional price increases are expected in the following weeks.
I am very much concerned about the quality as I was switched to other forms and that had negative qualities to it and caused my sugar numbers to rise as well as my blood pressure went up also?? My blood pressure meds were discontinued so I had to switch to whatever the CVS or Atena allowed and that went up and also my sugar numbers went up but the one that worked for me was no longer available anywhere!! So quality is a very rean issue for me!!! We are all at risk from corporate decisions on their profits over our health !!
Sure, Lilly is hiding behind the logistic issues, but they also have a point. Most manufacturers do not sell directly to consumers and middlemen make independent decisions about what and how much to carry. However, Lilly is paying rebates to those distributors. If Lilly really cares, they can make the rebates contingent on carrying the authorized generic as well as the brand name. P&G does that sort of thing to grocery chains in spades and the pharmaceuticals have similar clout in drug store distribution.
See the blog by Adam J. Fein, Ph.D. called Drug Channels on the topic ‘The Gross-to-Net Bubble’ to understand the very significant role played by insurance companies, plan sponsors and PBMs in driving up the list prices and costs of name brand prescription drugs.
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