“Getting diagnosed today in 2019 in America with type 1 diabetes — it is a death sentence for some people.” — Quinn Nystrom
Nystrom was the coordinator of a bus trip last month for a dozen people who traveled from Minneapolis to London, Ontario, Canada. The purpose was not sightseeing, but to lay in a supply of insulin to combat type 1 diabetes. It was not the first trip — and technically what they did was against the law.
They traveled because the price of a vial of insulin can be $340 in the U.S. Someone who is at risk from type 1 diabetes — and that is estimated at about 7.5 million Americans (with 35 million from all forms of diabetes) — rely on insulin to stay alive. Some of those with type 1 diabetes need up to three vials a month to keep their life-threatening disease at bay.
They go to Canada because the cost of insulin there is $30 a vial. Do the math and it shows the difference in costs can be tenfold — $90 in Canada versus more than $1,000 a month in the United States if someone is paying list price.
Of course, insurance can knock it down — but in some cases, not so much. One of the Canadian travelers, Deb Souther, who has lived with diabetes for 46 years, told CBS News that even with insurance, her insulin costs are $700 a month. That is further complicated by the fact that health insurers have been shifting more health-care costs onto policyholders – and average deductibles have quadrupled in the past 10 years, according to news reports.
Small wonder, then, that about a quarter of Americans afflicted with type 1 diabetes ration their insulin, a gamble that can put them at risk even after just a few days.
Insulin is cheaper in Canada mainly because it has public health care. The Canadian government negotiates prices with drug companies and can cap prices, while in the U.S. the pharmaceutical companies negotiate with individual private insurance companies and — even with the advent of things like pharmacy benefit managers in the 1970s — they have been less than effective in dealing with drug manufacturers, in part because they get rebates from the manufacturers and are thus incentivized to keep prices high, according to a recent article in The American Prospect magazine.
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The differences are also found in the U.S. changing laws over the years; its system of patents and the tweaking of patents; and the introduction of DNA technology and “human insulin” made of bacteria instead of materials from the animal pancreas, which created drugs that were more effective and more costly.
For nearly a half-century, Eli Lilly dominated the insulin market and prices were relatively stable, but that began to change with new laws in the 1970s and developments in the 1980s. The wholesale price of insulin tripled from 2007 to 2017, according to The American Prospect, and the three pharmaceutical companies that manufacture it — Lilly, Novo Nordisk and Sanofi — take in billions in profits annually from insulin sales. The U.S. market is the hub, with 15 percent of global insulin users who account for almost 50 percent of their worldwide revenues.
The Canadian caravan of insulin buyers was appropriate for another reason — London, Ontario is but a short distance from the University of Toronto, where a lab team did the pioneering work with extracts from animal pancreases to develop insulin. The researchers, leery of commercialization of their discovery, sold their patent rights to the university for $1 apiece. The university briefly tried at first to manufacture insulin, but could produce only limited supplies and then sold the rights to Lilly and Nordisk.
That’s a sad footnote to today’s situation, where U.S. insulin costs have gotten out of hand and the response has been fragmented and disjointed. There are a couple of lawsuits over alleged price fixing and an investigation by the House Oversight Committee, with no results so far.
The frustration has lead two states to take action on their own. Florida passed a law that would allow large batches of drugs to be legally imported from Canada into the Sunshine State. Colorado passed a law capping insulin co-pays at $100 per month, but that only applies to state-regulated employer insurance plans.
Wisconsin legislators should take note of the insulin price surge, and determine if they need to step in to protect state residents who have been buffeted by high costs that can not only threaten their health, but their lives.