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FDA describes plan to create competition and combat rising insulin prices

A plan to increase competition and bring down the price of insulin was presented this week by Food and Drug Administration (FDA) Commissioner, Scott Gottlieb, MD.  Balancing their consumer protection role while promoting beneficial new ways to advance patient care, he hopes to, “inspire competition that can help lower costs and broaden patient access.”  He also stated that generics are important to help bring pricing down.  “We’ve set out in recent months to advance new policies that are aimed at promoting more competition when it comes to biosimilar products,” Gottlieb said.

Understanding the issue and potential solutions, means understanding the following terms:

  • Biologics - drugs made from complex molecules manufactured using living microorganisms, plants, or animal cells.
  • Biosimilar - a biologic medical product that is almost an identical copy of an original product that is manufactured by a different company.
  • Generic drug - an exact copy of its reference medicine.
  • Pharmacy Benefit Managers (PBMS) - a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.

Commissioner Gottlieb said the FDA will recharacterize insulin as a biologic instead of a drug, in 2020.  This regulatory change should help drugmakers make biosimilar insulins available to people living with diabetes. He criticized some drug companies who he accused of using FDA regulations to block other companies from obtaining samples of their patented products, which makes it impossible for biosimilar drugs from being developed.

A study from the Schaefer Center at USC found the average U.S. list price of four insulin categories have increased 15-17% per year between 2012 - 2016.  This past summer (2018) the American Diabetes Association made recommendations for improving insulin access and affordability.  We summarized them in an article titled, “Insulin Access and Affordability: The Rising Cost of Treatment,” which mentions the average list price of insulin nearly tripled between 2002 and 2013.

Gottlieb understands the severity of the issue. “Access to affordable insulin is literally a matter of life and death for these Americans,” he said. “As a result, we’ve heard frequent reports of patients rationing insulin, and in some cases dying because they can’t afford the injections they need to survive.”

Cheryl Barry, RN, MS, CDE, Manager, Diabetes Education Program at the UMass Diabetes Center of Excellence says, "It is abhorrent that in the United States, people need to choose between taking their insulin or paying for other necessities and thus increasing their risk for the long-term complications of diabetes.” She added, “This is a start, but we still have a long way to go.”

Barry and her team of diabetes educators continue to hear patients complain that insulin is too expensive. Many have admitted to sometimes skipping doses to make it last longer.  “We hear so many people tell us that they used to pay $20 or $30 and now their co-pays are in the hundreds,” she says. “They have to sometimes decide between paying for their necessary insulin or paying their rent… they end up going without insulin, which can have severe consequences down the road.”

Three companies currently control 90% of the global insulin market, and produce all the insulin used in the U.S., according to the Congressional Research Service.   

Ironically, the drug companies often keep a relatively small portion of the list price increases. Patients who are uninsured or under-insured may pay out of pocket for these price hikes. Drug manufacturers use rebates generated by the gap between their rising list and net prices to pay for preferred status on pharmacy benefits managers formularies. Dr. Gottlieb pointed out that big profits end up in the hands of the PBMs. “Monopoly profits benefit every member of the drug supply chain, except the patients who most need access to affordable products,” he said.  “This includes diabetic patients in high deductible health plans who can find themselves paying list prices for these drugs that no one else pays.”

PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims, according to the American Pharmacists Association.

 “I am glad this issue has finally come to the forefront,” says Samir Malkani, MD, who in addition to caring for patients with diabetes at UMass Memorial Health Care and Milford Regional Medical Center, is the UMass Diabetes Center of Excellence Outreach Director for Affiliate and Member Hospitals.  “The substantial increase in the retail cost of insulin is disturbing because of the lack of transparency on the part of insulin manufacturers in providing justification for the price increase, as there have been no substantial improvements in insulin formulation in the past 15 years.”

Gottlieb acknowledged that the planned FDA policy changes won’t be soon enough for patients that are suffering today, and don’t have access to affordable insulin.  The issue has made national headlines and has the attention of the diabetes community.  It will continue to be a hot-topic until changes are implemented.