Visante: Artificial Manufacturer Barriers to Competition Lead to High Insulin Prices

(Washington, D.C.) — A highly consolidated insulin market limits competition and allows dramatic price increases on new and existing brand-name products, according to a new Visante analysis: “Insulins: Managing Costs with Increasing Manufacturer Prices.” 

The Visante analysis finds that insulin list prices escalated over the past 5-10 years largely due to limited competition caused by an oligopoly of three drug manufacturers, a lack of alternative generic and biosimilar insulins, and drug manufacturers’ overuse of patent extensions. As a result of rising list prices, total gross sales – pre-rebate prices and discounts – for insulins increased from $22 billion in 2012 to $54 billion in 2019.

For their part, pharmacy benefit managers, PBMs, have held net insulin costs flat. Total net sales of all insulins were the same in 2012 as in 2019, at $13 billion respectively.

Visit PCMA’s website for more information and the full Visante analysis.

“PBMs have been able to moderate insulin costs for most consumers with insurance,” said JC Scott, President and CEO for PCMA. “But strategies that are being used to avoid competition through ongoing patent extensions on insulin products are a significant barrier to getting costs down even further. The key to reducing drug costs is by increasing competition among brands, biologics and generics, including for insulin products.”

The analysis highlights the follow-on biologic insulin Basaglar as an example of how competition is the key to reducing insulin costs for patients. Following Basaglar’s market introduction, the net cost of Lantus – the direct competitor product – decreased by almost 55 percent.

The Visante analysis also shows how PBMs are innovating clinical care programs that are helping beneficiaries with diabetes afford their medications and improve health outcomes. For example, some PBMs have introduced new programs to cap out-of-pocket costs on insulin.

In addition, PBMs commend the Trump Administration for creating a Medicare demonstration program designed to lower insulin costs for seniors.

While PBMs are keeping average out-of-pocket costs down for consumers with commercial insurance, PBMs understand that for too many consumers, including some Medicare beneficiaries, insulin costs are increasingly unaffordable. We look forward to working with policymakers to help every patient affordably access needed prescription drugs, including insulins.