How Profit-Driven Pricing Endangers People with Type 1 Diabetes
Written by Rylie Levine
Insulin insecurity is a growing concern in the US, as Type-1 diabetics rely on this drug for survival even when pharmaceutical companies continue to raise prices. Whether faced with unaffordable healthcare, institutional unresponsiveness, or major life transitions, Americans have quickly learned that they cannot rely on healthcare systems to support their diabetic needs. Unfortunately, US healthcare systems are not supported in a way that can address each adult’s Type 1 Diabetic needs.
Due to the need for insulin, this drug can be classified as unique. It becomes a burden to get hands on it in the US because of patents, production monopolies, and insufficient insurance coverage. Sadly, this leads to insulin rationing, diabetic ketoacidosis, and mental health issues. More specifically, in 2018, 1 in 4 patients cut back on insulin because of its cost, which led to an overwhelming amount of tragic deaths due to insulin rationing.
To explain the reasoning behind these cruel actions diabetics are forced to take, Pharmacy Benefit Managers (PBM), and the rebate system needs to be taken into account. A rebate can be defined as a percentage of the listing price on a medication designated by the PBM, which is then listed on the health insurance plan formulary or placed into a pharmacy. Rebates account for 30-70% of the costs a person is forced to pay for out-of-pocket insulin when they either don’t have insurance or have not met their deductible. PBMs come into the picture as they take a proportion of the rebate as a profit and give the remaining money to either Medicare, employer health plans, or standalone insurance companies.
The brutal truth about this process is that it is easily avoidable. Insulin manufacturers directly benefit when PBMs raise the market price of insulin. PBMs act as the middleman when selling insulin, and ultimately accumulate around 70% of the current list price of insulin. However, insulin manufacturers would likely resist any changes to the current system because of how the PBMs directly impact their profits. While PBMs initially started out intending to obtain drugs more efficiently for patients, they are now more focused on profit-driven strategies. Rebates continue to grow in the insulin market, and PBMs like CVS Caremark, Express Scripts, and Optum Rx are gaining the power to enforce them. As a result, diabetics are paying great out-of-pocket prices, and insulin pricing can now be classified as an example of how unregulated drug pricing systems are motivated by profit and prioritize profit over patients.
In 2023, Medicare (Inflation Reduction Act) began to cap the cost of insulin to $35/month for seniors for those supported by Part D. The Medicare drug coverage helps to pay for brand-name generic drugs that citizens need, but this is optional and not offered to everyone. However, only around 80% of those with Medicare have Part D, while the other 20% do not. This places the 20% in a vulnerable position. Additionally, in terms of Medicaid, this service is not protected by federal legislation; instead, state by state, putting more diabetics at risk for insulin rationing and other fatal pathways.
Overall, insulin insecurity does not come from a lack of knowledge or amount of the good; instead, it comes from a healthcare system that thrives with the help of profit-driven pricing companies. This life-saving drug can no longer be managed in the hands of PBMs, who are trying to maximize their profits. Despite Medicare and Medicaid efforts to accommodate US citizens, there is ultimately no present solution to work around the middleman. As long as the insulin market is valuing profits over patients, this insecurity will persist, and diabetics will be left vulnerable. Type 1 Diabetics lack the necessary body functions to produce their own insulin, and therefore depend on this drug. They need to be protected from the profit-driven dangers that exist in the US today. To address this issue, Congress must pass stricter laws on the insulin industry, specifically targeting PBMs and the rebate system that allows profit-driven insulin pricing.
Sources
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