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According to an article in The Lancet, retail insulin prices (the amount one pays without insurance) have skyrocketed. Between 2007 and 2018, the cost of some insulin products has increased by more than 200%. People with little-to-no health insurance coverage have reported paying more than $1000 per month when higher insulin doses are required.

In response to the crisis triggered by high prices, the state of California is investing in making their own low-cost insulin and the New England Journal of Medicine reports  a non-profit company is hoping to bring affordable insulin to the market. These two plans could potentially bestow on some who require insulin the kind of insulin accessibility that patients in all other high-income countries enjoy.

Civica Rx, a nonprofit company in Lehi, Utah, said last March that it plans to make and sell generic versions of insulin to consumers at no more than $30 per vial and no more than $55 for a box of five pen cartridges.

Following the political pressure on this issue over the last few years, Eli Lilly & Co.’s announcement this March that it is slashing prices for its major insulin products, perhaps hoping to ease some pressure on Big Pharma according to a report by . Kaiser Health News.

In 2018, Novo Nordisk, amid public rancor over rising insulin prices, considered a 50% cut, according to the report. But the company’s board decided against it, noting that “many in the supply chain will be negatively affected ($) and may retaliate.” The company also feared that irate insurers might retaliate against Novo’s blockbuster diabetes and weight-loss drugs like Ozempic, which compete against Lilly’s Mounjaro.

Sanofi and Novo Nordisk did not directly respond to Lilly’s price-dropping move but noted, in statements, that their discount programs already provide cheap insulin for those who need them. Millions of Americans have used these coupons, but patients say they come with red tape and can be unreliable.

The three big insulin makers have fought off competition that could lower prices across the board. They’ve done this, for example, by introducing their own, slightly less expensive “authorized generics,” which discourage other companies from entering the insulin market. It wasn’t until 2021 that a competitor brought a long-acting “biosimilar” insulin – essentially a generic version of Lantus – to the market, and it has barely made a dent. The company, Viatris, which since sold its product to Biocon Biologics, did win entry to one formulary by creating an essentially identical product, tripling its list price and offering PBMs a big rebate.

Kaiser Health News says that insulin has come to embody the perversity of the U.S. health care system as list prices for the century-old drug, which 8.4 million Americans depend on for survival, quintupled over two decades to more than $300 for a single vial. Just because Lilly – which sells about a third of the insulin in the United States – lowers its price doesn’t mean all patients will pay less, even in the long run.

These kinds of behaviors have increasingly drawn congressional attention, and drug manufacturing attack ad campaigns, and it also casts light on the profiteering methods of the drug industry’s price mediators – the pharmacy benefit managers, or PBMs – at a time when Congress has shifted its focus to them.

Drugmakers have long ceased to be the only, or even primary, villain of the insulin price scandal. The three companies that produce nearly all the insulin in this country – Lilly, Sanofi, and Novo Nordisk – posted stagnant or declining revenue from their versions of the drug in recent years despite the steadily climbing list prices they charged. They’ve even advised investors that they don’t see insulin sales as a high-profit area anymore.

The focus is now upon the gigantic pharmacy benefit managers – owned by CVS Health and insurance giaInts UnitedHealthcare and Cigna – that have aggressively played the insulin makers off one another in a way that mainly fattened their own accounts, as was revealed in a scathing 2021 Senate Finance Committee report.

In theory, when pharmacy benefit managers negotiate contracts with drug manufacturers on behalf of insurers, they pass along savings to patients. In practice, while the hard-nosed bargaining may benefit the well-insured, it can hurt patients on fixed incomes and others less able to afford their insulin.

To compete for access to insured patients, according to the report, the three insulin makers in the 2010s steadily increased rebates and fees paid to the powerful PBMs, which are owned by or allied with major insurers. This spurred drugmakers to keep raising their list prices, because the more they paid in rebates – calculated as a percentage of list price – the better their placement on insurance formularies, the complex lists of drugs insurers cover for patients.

In other words, the more the insulin makers compete, the more consumers – the unlucky ones, anyway – may pay.

Most of the insulin list price increases have gone to PBMs, the go-between companies. For example, Lilly earned about $25 for each Humalog injection pen from 2013 to 2018, while the list price increased from $57 to $106. Net prices have remained stable the past few years and insulin revenues actually declined last year, according to recent Sanofi and Lilly financial reports.

Trade secrecy makes it hard to see which portions of the kickbacks end up as profit or savings for pharmacy benefit managers, insurers, pharmacies, or patients. But patients who are uninsured, are underinsured, or pay high deductibles can end up with whopping insulin bills, because their copayments are tied to the drug’s list price.