The truth about insulin pricing

March 9, 2020
It’s Podcast Monday. I AM BIO Episode 4, Trying Our Patients, is now available—and if you care about the impact of drug pricing legislation on new cures, you won’t want to miss it. Don’t forget to rate, review, and subscribe wherever you get your podcasts. (Apple,…

It’s Podcast Monday. I AM BIO Episode 4, Trying Our Patients, is now available—and if you care about the impact of drug pricing legislation on new cures, you won’t want to miss it. Don’t forget to rate, review, and subscribe wherever you get your podcasts. (Apple, Spotify, and Google)

While the spread of the coronavirus and the administration’s “shift in tone” will dominate the news this week, we also want to take a look at two other important issues for the biotech industry: the truth about insulin pricing, and the White House’s response to a court ruling on biofuels exemptions. Here are just under 1,000 words, about 4 and a half minutes.

The truth about insulin pricing

Insulin's a big target in the drug pricing debate—but a new report shows net prices of Sanofi’s insulin products are actually down, reports FiercePharma, though the savings are not passed along to patients. What can we do about it? 

Just the facts, please. “Since 2012, the net price of Sanofi insulins has declined by 41%. Over the same period, the net price for commercial and Medicare Part D plans of our most prescribed insulin, Lantus, has fallen 37%,” says the latest pricing report from the drug manufacturer (and BIO member). 

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Sanofi gave a LOT of rebates: “In 2019, 55% of our gross sales were given back to payors as rebates, including $5.5 billion in mandatory rebates to government payors and $8.4 billion in discretionary rebates.”

But rebates aren’t getting to patients: For Lantus specifically, “average out-of-pocket costs for patients with commercial insurance and Medicare has risen approximately 62%.”

In other words: “Given that insulin net prices are declining, patient out-of-pocket costs should be declining as well. However, that is not always the case, as benefit designs may result in patient out-of-pocket costs exceeding plans’ net cost.” 

So, what can we do about it? Reducing health care costs requires holistic solutions that actually address the reasons why costs continue to go up, like high-deductible insurance plans and the ever-increasing copays and coinsurance for medication. As we’ve argued, one place to start would be ensuring rebates are passed along to patients instead of padding the profits of middlemen. 

Clearly, drug price controls are not the answer, either. “The failure of declining net prices for four consecutive years, or of list price reductions, to fix patient access and affordability challenges demonstrates that focusing solely on the list price of medicines will not guarantee that patients will be able to access and afford the medicines they need,” says Sanofi


More Health Care News: 

AP: Behind the scenes, scientists prep for COVID-19 vaccine test
“Dozens of research groups around the world are racing to create a vaccine as COVID-19 cases continue to grow. Importantly, they’re pursuing different types of vaccines — shots developed from new technologies that not only are faster to make than traditional inoculations but might prove more potent.” 

Bloomberg: The search for new drugs for coronavirus faces long odds
“The most significant obstacles to getting viable therapies to market are likely to be timing and the global extent of infection. In the case of SARS, the virus spread fast for nine months but then burned itself out, thanks in part to aggressive efforts to stop its transmission.” 

Reuters: Pfizer weighs working with BioNTech on potential coronavirus vaccine
BIO member Pfizer Inc. is considering a collaboration with Germany’s BioNTech SE, which has an mRNA-based drug development platform.

The Washington Post (Opinion): Amid all the pandemic fear, some impressive leaps in science
“The understandable dread about a spreading virus should not overshadow remarkable developments in the speed and transparency of biomedical science,” says the editorial board.


The back-and-forth on biofuels

After a court ruled Trump’s EPA had gone too far with its exemptions to the biofuel requirements, there’s been some back-and-forth over what the administration would do next. Now, we have an update—and it’s not great.

As background, Trump’s Environmental Protection Agency (EPA) has granted an unprecedented number of Small Refinery Exemptions (SREs) to the Renewable Fuel Standard (RFS), which requires a certain percentage of biofuels to be mixed in U.S. transportation fuel. 

An appeals court ruled the EPA “overstepped” its authority on a few exemptions, asking EPA to reconsider three 2016 exemptions in Wyoming, Utah, and Colorado because the refineries in question “had not received exemptions in the previous year.”

The White House said, sure, we’ll take a look—and according to reports, considered paring back the number of SREs. 

But now, they’re ready to fight the court ruling, with Reuters reporting “a major campaign…by senators representing oil states, including Senator Ted Cruz of Texas, helped push the administration to shift course and consider an appeal” over the next two weeks.

The fossil fuel industry’s happy. Senate Environment and Public Works Chairman John Barrasso (R-WY) applauded Trump “for his decision to fight for small refinery workers in Wyoming and across the country. If allowed to stand, the court’s decision would effectively end hardship relief for small refineries under the Renewable Fuel Standard.”

But exemptions go to big oil companies, too—and they led to dozens of temporary and permanent shutdowns and layoffs in the U.S. biofuel industry last year.

What they’re saying: “Appealing this decision is going to bring more skepticism to the industry. And we’ve got 43,000 jobs that are at stake here just in Iowa," said Sen. Chuck Grassley (R-IA)

Stephanie’s Sage Words: It’s very unfortunate to hear the administration has chosen to go in this direction. They are doubling down on policies that have already been determined illegal and will be reaffirmed by the courts. This delay will only increase the pain biofuel producers and farmers are already feeling; further undermining innovation and investment in sustainable fuels. – Stephanie Batchelor, VP of BIO’s Industrial and Environment Section

BIO Beltway Report

President Trump’s Monday: On Friday, Trump changed his schedule, again, and visited the CDC after all. He also announced a new chief of staff: former Republican Congressman Mark Meadows of South Carolina. Today, Trump continues his fundraising swing through Florida, while coronavirus response remains the administration’s focus.

What’s Happening on Capitol Hill: The House and Senate are in session, with half a dozen coronavirus hearings expected through the week.

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