Feb 4, 2020

Pharmaceutical Companies to Blame for Out-of-Control Prices for Life-Saving Drug


During tonight’s State of the Union address, President Trump is expected to address the mounting crisis of affordability caused by the out-of-control price of prescription drugs. One drug in particular has been at the forefront of this crisis for millions of Americans diagnosed with diabetes: insulin.

Over the past decade, Big Pharma has continued to hike the price of insulin at rates far out-pacing inflation, despite little or no improvement to the life-saving drug. This practice has forced too many Americans to turn to drastic measures like traveling to Canada to purchase their medication or rationing their insulin supply, often with devastating or deadly consequences.

When insulin was first created, the inventors sold the patent for only one dollar. But between 1996 and 2006, the price of insulin increased by 700 percent. And in 2016, the average price per month reached $450, leaving one-in-four American diabetic patients struggling to afford this life or death medication.

Meanwhile, the three largest manufacturers of insulin – Novo Nordisk, Sanofi and Eli Lilly – continue to engage in a number of egregious pricing practices to keep prices at the expense of American patients. These brand name drug companies control 99 percent of the marketplace and face no true generic competitor to drive down prices, allowing them to continue raising prices with little fear of competition.

  • Novo Nordisk, Sanofi And Eli Lilly “Appear To Have Increased [Prices] In Lockstep Over A Number Of Years, Prompting Allegations Of Price Fixing.” (Tiffany Stanley, “Life, Death And Insulin,” The Washington Post, 1/7/19)
  • “When Charted Side By Side, The [Three Manufacturers’] Price Increases Seem To Be In Synch,” Something Known As Shadow Pricing. “In most industries, competition drives down prices. In this case, the competitors appear to increase prices side-by-side – something that’s been referred to as ‘shadow pricing.’ At least three companies – Eli Lilly & Co., Novo Nordisk, and Sanofi Aventis – make and sell insulin. Despite this competition, prices have steadily climbed over the past decade, taking single or double-digit list price increases in a year. A 10-milliliter vial of Sanofi’s long-acting insulin, Lantus, first hit the US market at $34.81 a vial in 2001, according to data from Truven Health Analytics … In other words, the competition seems to have done nothing to push prices down. In fact, when charted side by side, the price increases seem to be in synch.” (Lydia Ramsey, “There’s Something Odd About The Way Insulin Prices Change,” Business Insider, 9/17/16)
  • The Price Of A 10-Milliliter Vial Of Eli Lilly’s Humalog Insulin Cost $93 In 2009 But The Same Vial Now Costs $275. “In 2009, the list price for a 10-milliliter vial of Humalog, a fast-acting insulin made by Eli Lilly, was about $93. Today it costs closer to $275.” (Rachel Gillett & Shayanne Gal, “One Chart Reveals How The Cost Of Insulin Has Skyrocketed In The US, Even Though Nothing About It Has Changed,” Business Insider, 9/18/20)
  • “Similarly, Novo Nordisk’s Fast-Acting Insulin Novolog Cost Almost $93 For A 10-Milliliter Vial In 2009. Today, It Costs About $290.” (Rachel Gillett & Shayanne Gal, “One Chart Reveals How The Cost Of Insulin Has Skyrocketed In The US, Even Though Nothing About It Has Changed,” Business Insider, 9/18/20)
  • “Sanofi’s Popular Insulin Brand Lantus Was $35 A Vial When It Was Introduced In 2001; It’s Now $270.” (Tiffany Stanley, “Life, Death And Insulin,” The Washington Post, 1/7/19)
  • Sanofi Has Filed 74 Patent Applications For Lantus. (“Overpatented, Overpriced: Lantus Special Edition,” I-MAK, 11/1/18)
  • According To The Initiative for Medicines, Access and Knowledge (I-MAK), Sanofi’s “Lantus Is … Highly Overpatented” For The Purpose Of Being Able To “Preserve And Extend Its Ability To Keep Competition At Bay While Hiking Prices.” “Lantus is also highly overpatented. Though Sanofi’s primary patents on Lantus expired in 2015, the company has filed 70 secondary patent applications in the U.S. – 95 percent of its total – since the drug was first approved and put on the market in 2000. If granted, these additional patents would give Sanofi monopoly protection for up to 37 more years – almost double the duration provided under U.S. law. Why would a pharmaceutical company file so many patents after a drug is already on the market? Quite simply to preserve and extend its ability to keep competition at bay while hiking prices.” (Tahir Amin, “Patent Abuse Is Driving Up Drug Prices. Just Look At Lantus,” STAT, 12/7/18)

Despite Eli Lilly’s attempt to score some positive public relations points this past year by announcing a generic version of their top-selling insulin Humalog, reports reveal that “the cheaper option has not made much of a difference across the United States,” and did little to introduce real competition into the market to lower prices.

And as brand name drug companies try to point fingers at everyone else in the drug pricing supply chain in an effort to distract from their price-gouging and anticompetitive tactics, it’s important to remember Big Pharma is responsible for setting and deciding to hike list prices.

Now is the time for Congress and President Trump to deliver on their promise to lower prescription drug prices for Americans by advancing market-based solutions to hold Big Pharma accountable.

See CSRxP’s infographic detailing solutions with significant bipartisan consensus in Congress HERE.

Read more on bipartisan, market-based solutions to hold Big Pharma accountable HERE.