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Who has succeeded in raising the prices of insulin medications? – Healthcare Economist

Perhaps surprisingly, the answer is PBMs, not drug manufacturers. This is one of the latest in a recent review of Good and Hernandez (2021). He tries to get to the bottom of this question, writing:

The emphasis on price control begins with the pharmaceutical industry, and it is easy to follow. Manufacturers in the US are allowed to set their own prices for new products, which are protected from competition through patent regulations…
However, cheaper medical prices are a bit of a mediator with more and more discounts. As a result, manufacturers are referring to the price of the drug (the price of the drug after all deductions) instead of the price list which represents the price of the drug… the rise in the price of the drug from 2007 to 2018

More convincing facts have been presented in the paper Van Nuys et al. (2021). Using the same method used to monitor the flow of funds through the drug distribution system (Sood et al. 2017), they find that:

Between 2014 and 2018, the average price of 32 insulin products increased by 40.1% (from $ 19.60 to $ 27.45), while the average price of an insulin received by manufacturers dropped by 30.8% (from $ 10.53 to $ 7.29). The total cost of using 100 units of insulin increased by 3.2% (from $ 15.11 to $ 15.59) while the $ 100 share of insulin used by manufacturers decreased by 33.0% (from $ 69.71 to $ 46.73) and the two health components decreased by 2%. (from $ 13.82 to $ 10.40). The share of insulin use rates by pharmacists’ supervisors increased by 154.6% (from $ 5.64 to $ 14.36), the share of pharmacies kept by 228.8% (from $ 6.21 to $ 20.42), and retailer shares increased by 74.7% to $ 8.09).

In summary, intermediates (PBMs, pharmacies) find a higher proportion of insulin costs compared to pharmacists. The pictures below are valid JAMA. Read the entire paper Pano.

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