Diabetes drugs compete with prices that rise in lockstep

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A pattern of insulin makers matching each others price increases “certainly indicates a market that isn’t competitively healthy,” said David Balto, an antitrust lawyer and former Federal Trade Commission policy director. However, if two companies act independently to follow each other’s price increases, it’s not an antitrust violation, he said.

The survey covered drugs brands with U.S. sales of at least $350 million last year, according data compiled by Bloomberg. It focused on the average wholesale price, a benchmark that’s roughly equivalent to what an uninsured patient might pay at the pharmacy without the 15 to 20 percent discounts that big health plans get, said Jim Yocum, executive vice president for DRX.

Hitting the donut hole

Insulin treatment has remained generic resistant because incremental improvements over the years have received new patents, according to Jeremy Greene, an associate professor at the Johns Hopkins University School of Medicine.

“If any drug should be available generically, it should be insulin,” Greene said. The new insulins are “not so much better that it justifies the presence of people who can’t afford any drug.” A Sanofi statement said “today’s insulins are markedly improved” from those of a century ago.

Stan Lynam, a retired real-estate agent with diabetes in Riverbank, Calif., said he will soon have to stop taking Levemir and Novolog. In the first three months of the year, his prescriptions for the two drugs cost his insurance plan $2,343, according to statements he received.

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Lynam reached a coverage gap known as the “donut hole” in his Medicare drug plan in early April, he said. That would mean he would have to pay 45 percent of the drugs’ costs to continue using them.

Hand tremors

“If I were to buy the Levemir or Novolog, I would have to stop eating and turning on the lights,” said Lynam, who is 70 and said he lives with his wife on $3,000 a month, mostly Social Security. Later this month, he’s planning to switch to an older, cheaper insulin that is harder to use because it doesn’t come in a pen injector, and his hand tremors make him worried about handling syringes.

Insulin manufacturers “are sticking it to us,” he said. “They are not trying to compete.”

“How much a patient pays is based on a negotiation between the payer and the pharmacy,” said Novo Nordisk’s Inchausti. He said the company couldn’t comment fully without knowing details of a patient’s health plan.

The wholesale U.S. price for a five-pen, 15-milliliter pack of Lantus is almost $450, or about $375 with a health-plan discount, according to DRX.

Cheaper in France

In France, the same amount — which patients on higher doses might use in a month — costs 62.42 euros ($70), according to a French government website. In Norway, Lantus pens cost 574.6 kronor ($76), according to the website of the Norwegian medicines agency.

Some manufacturers have recently boosted discounts as insurers and benefits managers have excluded more-expensive brands from lists of covered drugs. Gilead Sciences Inc. has said discounts for its hepatitis C drugs — priced at $1,000 a day or more — would rise significantly this year.

The Gilead case is an exception, according to DRX’s Yocum. When discounts are given, he said later price rises on branded drugs, sometimes occurring twice a year, usually more than compensate for the prior markdowns.

Joel Zonszein, an endocrinologist at Montefiore Medical Center, in New York City, said he frequently sees patients who can’t afford insulin. Co-payments have risen to as much as $50 a month from $5 or $10 five years ago, and the higher prices mean health plans sometimes restrict coverage, he said.

A number of his Medicare patients have stopped taking insulin when they reached the donut-hole coverage gap, Zonszein said. The problem “really has become more acute every year,” he said. “I have these patients and I really don’t know what to do for them.”