How much SHOULD insulin cost?

If you’re one of the millions of Americans with insulin-dependent diabetes (or if you have a family member who is, or you are a generally caring person that thinks people shouldn’t be price-gouged, or if you just don’t like to see big pharmaceutical companies raking in people’s hard-earned dollars), then you have cause to be upset about the cost of insulin.

Even insulin users lucky enough to have good insurance can still find themselves in life-threatening situations when co-pays go up or coverage changes unexpectedly. Some families must pay upwards of $1,000 a month for the lifesaving drug.

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In a perfect world, no one would have diabetes. But since a perfect world seems to be on backorder, what might insulin cost if the world were just a bit more perfect? A group led by researchers at Health Action International, Geneva University Hospitals and the University of Geneva, and Boston University began a global study called Addressing the Challenge and Constraints of Insulin Sources and Supply. The three-year study set out to figure out what insulin would cost in the presence of healthy competition.

The researchers wanted to estimate a “competitive but profitable” price for producing regular human insulin, analog insulin, and biolsimilar insulin. Biosimilar insulins are like generic drugs in that they are designed to work the same as a current product but are not 100 percent identical (hence biosimilar). Analog insulin is a man-made substance similar to human insulin but altered to produce better results.

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Price Estimates

The research, published in BMJ Journals, calculated projected prices by estimating the cost of raw materials, manufacturing, formulation, transport, development and regulatory costs, and a reasonable profit (see the full explanation of their methods here).

Researchers presented a competitive-to-conservative price range to account for the fact that several price elements had to be estimated. They concluded that:

  • Regular human insulin could cost $48 to $71 (US dollars) per patient per year
  • Neutral protamine Hagedorn insulin (a biosimilar) could cost $49 to $72 per patient per year
  • Analog insulins could cost $78 to $133 per patient per year (except for determir, which was up to $365 a year)

Their estimated biosimilar prices “markedly lower” than current analog prices. If these more affordable options were available globally, then it stands to reason that other insulin types would be forced to come down in order to stay competitive.

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The study noted several limitations:

  • Several cost estimates were necessary to calculate prices
  • Prices assume purchase directly from manufacturer (including a markup for transportation)
  • The possibility of additional supply-chain markups
  • Prices were estimated per 10mL phial formulation, not pen or cartridge formulations

The lack of a pen and cartridge formulation estimate is a serious limitation as so many rely on pumps and pens, but the hope is that the lower cost for phial formulations would lead to lower costs for all formulations.

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Researchers conclude that in a world with a “robust, competitive biosimilar market” for insulin, manufacturers could still profit while offering human insulin for $72 a year or less and analog insulin at $133 a year or less. The international perspective on the profitability of insulin needs to change in order to convince new companies to enter the market.

The world isn’t perfect yet, and lack of competition is one of many problems that plague the insulin market. But if the results of the study get the right attention, and the World Health Organization prequalifies biosimilar insulins (as study authors hope), the global insulin market could change, impacting the everyday lives of millions of people with insulin-dependent diabetes around the globe.

And in our view, that would make the world a little more perfect.

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