Tag: drug costs

80% With Diabetes Eligible for New Drugs, but Cost Is a Barrier

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March 6, 2023 — More than 80% of U.S. adults with type 2 diabetes meet the criteria to use new treatment drugs, such as semaglutide, which is marketed as Ozempic, according to a new study published in the Annals of Internal Medicine.

However, only about 1 in 10 of those who meet the criteria used the drugs in recent years, the study found. In addition, the high prices for some of the drugs means they may put them out of reach as the first drug treatment for these patients. Most people with type 2 diabetes are prescribed metformin initially, but generally have other medications added on, but some of the newer drugs are now recommended as first-line treatment for some.

“It’s critical that we continue to study the best ways to manage type 2 diabetes (including medications and lifestyle changes), but it’s also important to examine how available these methods are to people,” says lead author Shichao Tang, PhD, a researcher with the Division of Diabetes Translation at the CDC’s National Center for Chronic Disease Prevention.

“This includes researching how many people are using certain tools or medications and how many people are eligible for them, which was the aim of this study,” Tang says.

A 2022 report from the American Diabetes Association and European Association for the Study of Diabetes recommended the use of certain drugs, such as Ozempic, which is given as a weekly injection, with other similar drugs available as daily injections, and oral tablets, for patients with type 2 diabetes.

This is because, as well as lowering blood sugar, these new drugs have been found to reduce the risks of complications of diabetes, such as heart disease and kidney disease, and they also result in weight loss, compared with older drugs.

The researchers estimated that, for the 22.4 million U.S. adults with diagnosed type 2 diabetes, about 82.3% would meet the recommended criteria to use drugs from these two new classes. About 94.5% of Medicare recipients with type 2 would be recommended to use them as well.

However, only 3.7% of those who met the criteria used them during the study period and just 5.3% of those eligible for the oral tablets used them.

About 9.1% used either of them before the most recent 2022 guidelines, which opened up the medications as first-line treatment for patients with type 2 diabetes.

Based on retail prices listed on a US-based website, a 30-day supply of an oral tablet drug can cost about $550-$600/month, while common injected drugs can run from a few hundred dollars for a daily injection or close to $1,000 for a version given weekly.

Prior studies suggest that the two drug types could be cost-effective as second-line treatments, the authors note. However, the current costs would need to drop by 70% for them to be cost-effective as first-line treatments.

Additional studies are needed to understand if the new treatments are cost-effective for certain patient subgroups as first-line medications.

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March 6, 2023
Eli Lilly Slashed Insulin Prices. This Starts a Race to the Bottom.

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Bram Sable-Smith and Samantha Young

When drugmaker Eli Lilly announced Wednesday it will slash the list price for some of its insulin products following years of criticism from lawmakers and activists that the price of the lifesaving hormone had become unaffordable, the news raised questions about what will happen to other efforts to provide low-cost insulin.

Civica, a nonprofit drugmaker based in Utah, for example, has said it plans to begin selling biosimilar insulin for roughly $30 per vial by 2024 — $5 more than the new price of Eli Lilly’s generic insulin.

In December, billionaire entrepreneur Mark Cuban said his new company, the Mark Cuban Cost Plus Drug Co., planned to sell low-cost insulin. And California is poised to launch an ambitious program to manufacture its own brand of the hormone, as well as generics of other high-priced prescription drugs.

Drug pricing experts welcomed the Eli Lilly news, predicting the move won’t undercut those efforts. And these other initiatives to bring lower-cost insulin to market, in turn, would put pressure on Eli Lilly to keep its prices down. Together these will help, not hamper, what could become a race to the bottom on insulin prices.

“The more competition, the more stable this solution will be so that five to 10 years from now the prices won’t go up again,” said Dr. Vincent Rajkumar, a Mayo Clinic oncologist who has been a critic of high drug costs.

The pressure could cause further ripples. Following Eli Lilly’s news, Sen. Bernie Sanders (I-Vt.) sent letters to the two other major insulin makers, Sanofi and Novo Nordisk, calling on them to follow suit.

People with diabetes, especially those with Type 1 who need the drug to survive, will benefit. Yet even while some of Eli Lilly’s persistent critics praised the move, they noted work remains to make insulin widely affordable.

“Additional competition and other accountability moves are still incredibly necessary because the companies can raise their list price again at any time,” said Elizabeth Pfiester, founder of T1International, a nonprofit that advocates for people with diabetes. “That’s why the government also needs to regulate insulin manufacturers to hold them accountable.”

Cuban’s company did not respond to requests for comment on how the Eli Lilly cuts might affect its efforts. But Civica’s plan remains unchanged following the news, said spokesperson Debbi Ford.

“From the beginning, we have said we are not entering medicine markets for market share,” Ford said. “We are participating for market impact.”

Democratic California Gov. Gavin Newsom tweeted Wednesday that “sky high prices for insulin have put it out of reach for too many” and his state will manufacture its “OWN insulin and ensure all who need access to this medicine” can afford it.

“Now, Eli Lilly is lowering their cost,” Newsom wrote. “Let’s keep it up.”

Last year, California lawmakers approved $100 million for the state to contract for cheaper insulin and make the lifesaving drug, cutting out drugmakers and go-between companies that add to the price consumers pay. Newsom has said that California’s insulin would be available “at a cheaper price, close to at cost.” Officials haven’t said when the state’s insulin will be available, though, or exactly how much it will cost.

“California’s goal was to get competition into the market however they can manage it,” said Robin Feldman, a professor at the University of California College of the Law-San Francisco who studies the insulin market. “If California’s entry results in bringing prices down from other manufacturers, that will be a good thing.”

Eli Lilly’s price cuts apply to what it described as its “most commonly prescribed” insulins, but Feldman noted those are older insulin products. Although California officials haven’t released details about which insulin products would be included in its program, Feldman said she expects the state will offer a variety to cover the market.

“It’s not aimed at any one company or any one drug,” she said. “It’s aimed at making affordable insulin available to market and putting pressure on other companies.”

Washington and Maine are also exploring ways to bring cheap insulin to consumers, and large insurance companies pledged millions in an agreement with Civica to manufacture cheaper insulin.

The cadre of newcomers aim to break open the insulin market because three pharmaceutical companies — Eli Lilly and Co., Sanofi, and Novo Nordisk — have long dominated the U.S. insulin supply and allowed their prices to escalate. The price of one of Eli Lilly’s products, for example, rose from $21 to $255 per vial between 1996 and 2016.

St. Louis University law professor Dr. Michael Sinha said Eli Lilly may have seen a threat from the discount insulin initiatives.

“This might be a response to some of those initiatives and the looming threat of really steep losses in terms of market share,” Sinha said.

University of California-San Diego pharmaceutical professor I nmaculada Hernández offered another possible reason for the price cut: changes to how drugs are paid for by Medicaid.

Beginning in 2024, Hernández said, drugmakers could be on the hook to pay fees, known as rebates, to Medicaid for drugs like insulin that have had steep price hikes. By lowering the list price of insulin, Eli Lilly could avoid those costs, Hernández said.

Hernández said that understanding the incentives behind Eli Lilly’s decision to cut list prices could help lower the price of other drugs that patients have trouble affording. If the makers of those other drugs also slash their list prices ahead of 2024, it could show the effectiveness of the new federal policy. If they don’t, it might underscore the importance of factors unique to insulin like public pressure by politicians and activists or market competition from initiatives like California’s.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Bram Sable-Smith and Samantha Young

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March 2, 2023
Is $3.5 Million a Fair Price for a Lifesaving Gene Therapy?

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Feb. 15, 2023 — Gene therapies have the power to cure serious, even fatal, diseases. Yet what captures public attention is often not the transformative effects but the enormous price tags.

At $3.5 million, Hemgenix, the new gene therapy for hemophilia B, has recently been named the most expensive drug on the planet, unseating another gene therapy, Skysona.

“I didn’t believe the prices we’re seeing now would ever happen,” says Colin Young, PhD, director of drug development pipeline research at Tufts Medical Center. “I’m continually amazed every time a new price comes out.”

Hemgenix is record-setting, but hardly an anomaly. Skysona, a treatment for a rare neurological disorder, launched at $3 million in September 2022. Zynteglo, a gene therapy for a genetic blood disorder, debuted just one month earlier at $2.8 million. In 2019, Zolgensma was priced at $2.1 million as a treatment for spinal muscular atrophy, a fatal genetic disease affecting infants and young children. Several other treatments land in the hundreds of thousands.

Yet the remarkable results lead some to call gene therapy a relative bargain. These drugs have the potential — in some cases, the proven ability — to cure illness with a single dose. This liberates patients from the physical, emotional, and financial burden of living with a serious disease, often one requiring highly expensive treatments.

“It’s a big paradigm shift,” says Sarah Emond, chief operating officer of the Institute for Clinical and Economic Review (ICER), a nonprofit that independently evaluates the cost of medical treatments. “Up until now, most drugs have been something that you take for chronic conditions forever.”

That’s because gene therapy does not treat symptoms. It targets the cause, the genetic defect behind a disease, swapping out faulty code or even inserting a gene that’s missing. Sometimes, this happens in a petri dish, and the healthy cells are transferred to the patient. Other times a vector, usually a virus, delivers the genetic material to the patient’s cells.

Treatment is currently confined to monogenic diseases — those caused by a single gene mutation — and the conditions are typically rare, with patient populations in the hundreds or low thousands. But treatments for more common conditions, like sickle cell disease, are on the very near horizon.

“This wasn’t even in my wildest imagination 20 years ago,” says Stephan Grupp, MD, PhD, medical director of the Cell and Gene Therapy Laboratory at the Children’s Hospital of Philadelphia.

In 2017, Kymriah — a cell-based gene therapy Grupp helped develop for a type of pediatric leukemia — was the first to be approved by the FDA. The clinical trial showed astonishing promise, with 90% of patients going into remission.

“There were almost 20 years of trials when nothing seemed to be working,” Grupp recalls. “And then, boom, it went from doing nothing to doing everything.”

One of the clinical trial patients, Emily Whitehead — now a well-known name in gene therapy — had been close to hospice. Twenty-three days after her infusion, her leukemia was gone.

“Some combination of disbelief and ecstasy” is how Grupp describes his reaction at the time. “We had no idea this was possible. We did mouse experiments in the lab, but that’s not guaranteed to translate into anything.”

Over a decade later, Emily, now 17, is still healthy. Gene therapy cured her cancer.

The Financial Picture

For every successful treatment like Emily’s, dozens more fail.

“[Drug companies] are really lucky if 1% of their ideas actually make it to the clinic,” says Young. “Then they’re pretty lucky if 1% of those actually make it to a product. There’s a very, very high attrition rate.”

The few treatments that make the cut can cost up to $1 billion dollars to develop, yet they may ultimately benefit fewer than 100 patients a year.

“Most of the companies eventually go bankrupt or get bought, even the ones that are successful,” Young says. “These things cost a hell of a lot to develop.”

Bluebird Bio, the company that makes Skysona and Zynteglo, is “very close to running out of money,” he says. This could threaten the launch of its sickle cell therapy regardless of the drug’s promise.

Research and development is only one part of the financial picture. Manufacturing costs are also steep.

Take the viral vectors, the most common delivery system for gene therapies. Inside production facilities you’ll find towering steel vats resembling the kind you might see on a brewery tour. “They go up to the ceiling — they’re enormous,” says Nicole Paulk, PhD, a University of California San Francisco researcher who studies technologies that could make gene therapy cheaper.

These vats are the bioreactors where viral vectors are produced. Despite their size, each one might yield only enough vector for a few patients, “‘like single digit,” says Paulk. “It’s a super labor-intensive process.”

During purification, much of the virus — up to 80% — is lost; a battery of FDA safety tests further depletes each batch.

This is just one step in a highly complex manufacturing process — the single biggest driver of gene therapy’s cost, according to Paulk. “Every step is just very expensive. These prices sound astronomical to people. But they are justified at the moment.”

Production is still mostly done by humans, with drug companies relying on the same methods developed in academic labs. This inefficiency spikes costs — and creates batch-to-batch variability. Even something as small as the way a technician holds a tube could affect the end product. Automation will improve quality control and bring production costs down, enabling more drugs to enter the market.

Some labs are also developing “off-the-shelf” cells for certain products, like the CAR T therapies for leukemia and blood cancer. This could yield multiple treatments per batch versus the current “bespoke” method, a weeks-long process where “you have to make a fully qualified lot of drug for every single patient,” says Grupp.

‘What’s the Value of a Life?’

Even if efficiency and competition improve, not everyone is confident that will translate to lower price tags. “We haven’t seen that for any other drug,” says Young, who points out that as more CAR T products enter the market, “they come out at the same price.”

That’s because pricing isn’t solely linked to manufacturing costs. “These companies believe the price should match the clinical benefit,” says Emond.

When gene therapies prove to be life-transforming — even lifesaving — that leads to a very high dollar amount. “You’re sort of deciding, ‘What’s the value of a life?’” says Young.

When calculating target prices, ICER incorporates a range of factors, including the economic burden the health care system can sustain without a spike in premiums. Perhaps its most critical consideration, however, is clinical benefit.

“The magnitude of change — how much better a patient feels on the drug — comes directly from the patients in the clinical trial,” says Emond. This data is converted into “quality-adjusted life years,” or QALYs, which aims to capture both quality and quantity of life before and after treatment. The analysis includes the cost savings of treatments no longer needed.

The latest ICER report suggests Hemgenix should be priced at around $2.9 million — some $600,000 less than its market price. A big reason for the still seven-figure price tag is the IV infusions of clotting factor that Hemgenix could eliminate. “If the gene therapy is sufficiently durable,” that is, if it works as intended,— “then it doesn’t take too many years to write off the cost of the alternative,” says Young, since earlier therapies can cost upwards of $750,000 a year.

Yet ICER refuses to take this number as a given, calling those other therapies “extremely overpriced.”

If drugs were priced strictly according to efficacy, those that confer life-changing benefits, like gene therapies, could cost seven figures without straining the system, says Emond. “We shouldn’t overpaying for drugs that bring marginal clinical benefit,” she insists.

The U.S. Health Care System

Understanding the problem of pricing requires a wider view of our country’s fragmented health care system, a capitalistic model where drug prices are the highest in the world and insurers are mostly price takers.

Red tape notwithstanding, insurance generally covers gene therapy, leaving most people responsible for only the deductible. Still, because “there really isn’t any [payer] approaching monopoly power,” says Young, the market renders insurers essentially impotent when it comes to negotiation.

Drug manufacturers “try to figure out what the market will bear and just set that price. And it’s typically going to be accepted,” Young says. “You basically can’t persuade the payers in European countries to pay that much,” since there’s often a government agency deciding which drugs will be reimbursed at what price. In 2021, Bluebird Bio pulled Zynteglo from Europe after withdrawing it from Germany, where health officials rejected its target price of $1.8 million.

But the U.S. landscape may be changing: The new Inflation Reduction Act permits Medicare, for the first time, to negotiate the prices of certain high-cost drugs that lack competition. This will go into effect in 2026, though the eligible drugs haven’t yet been announced.

Right now, the most urgent question is one of access. “Realistically, we’re stuck with the sort of prices we’re looking at,” says Young. “We just have to find payment mechanisms,” especially as gene therapies for more prevalent conditions advance in the development pipeline.

“Imagine if these therapies work for more common cancers — lung cancer, breast cancer,” Grupp says. “That would be a whole new day in therapy. But how are we going to pay for this?”

With an influx of eligible patients, the health care system could be seriously strained.

Take sickle cell disease, the most common genetic disease in the U.S., affecting one out of every 500 Black Americans. This year, the FDA is expected to approve two gene therapies for the disease. Generally, “this population has lower rates of commercial insurance than other populations that have gotten [gene therapies] until now,” says Grupp. “We’re going to have to deal with the impact of these prices on Medicaid.”

Moving Forward

One possible solution is outcomes-based pricing. This refunds some or all of the treatment’s cost if results don’t last.

“If you’re going to price these very expensive therapies for their curative potential, then if they stop working later, we have to get some of that value back,” says Grupp. An outcome-based agreement might, for example, refund a patient with hemophilia who must return to prophylaxis after receiving Hemgenix.

This type of guarantee is already being implemented for other gene therapies.

If patients with leukemia aren’t in remission 30 days after receiving Kymriah, the hospital treating them isn’t billed. The maker of Luxturna, a gene therapy for a rare form of blindness, offers rebates based on light-sensitivity tests taken shortly after treatment and 2 1/2 years later. Bluebird Bio, the maker of Zynteglo, promises a refund of up to 80% if patients require red blood cell transfusions within 2 years.

Innovative payment plans could be another answer. Bluebird Bio offers an installment option, reducing the upfront cost of gene therapy for insurers. AveXis, maker of Zolgensma, also has a pay-over-time structure, with payments spread out for as long as 5 years. Some insurers are allowing patients to pay their deductible over time rather than all at once, to reduce the impact on patients.

The high-risk pool model, where small insurers combine their resources and share the cost of gene therapies, could also improve patient access.

“If you’re a self-insured company and somebody needs a $3 million therapy, it basically kills your health plan,” says Young. Programs like Cigna’s Embarc, which allows companies to pay a flat fee per employee to guarantee coverage of gene therapy, could help solve this problem.

It’s this type of creative thinking that may be the key to propelling the industry forward.

“I totally get the gut reaction, like a million dollars is insane. That number seems fanciful to people,” says Emond. But gene therapies themselves are fanciful, offering the kinds of results researchers couldn’t fathom even 2 decades ago.

“We could be on the precipice of transforming the way we think about and treat disease. … We have to reward swing-for-the-fences innovation with high prices,” Emond says, then tempers her position with a blunt reminder. “Remember that price is a conscious choice.” Drugmakers choose what they charge — and how they choose could determine the future of gene therapy.

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February 15, 2023
Biosimilars May Finally Stop the Rocketing Cost of Insulin

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Oct. 26, 2022 – Trapper Haskins, a 45-year-old musician with type 1 diabetes, says the price of insulin is a constant stressor in his life. The Nashville resident takes two types of insulin daily and sometimes must ration the medicine because his insurance plan caps how much of the pricey drug he can receive each month. Insulin “isn’t like a high blood pressure medication,” he says. “Some days you need more, and then you get to the end of the month and you’re afraid you’ll run out.”

Research shows that among people with type 1 and type 2 diabetes, about one in four must ration their supplies due to cost. In general, most people with diabetes need two or three vials of insulin a month. Each vial can cost hundreds of dollars, meaning patients’ costs could easily reach $1,000 a month.

“The price of insulin has tripled in the last 10 years, and it’s creating a national crisis,” says Lizheng Shi, PhD, a professor of health policy at Tulane University in New Orleans. .

There are 1.5 million people with type 1 diabetes in the U.S. who can’t buy their own insulin and are entirely dependent on it to keep their blood sugar in a safe range. The vast majority of people with diabetes, some 37 million, have type 2 diabetes, which usually results in the use of blood sugar-reducing medications until insulin is introduced later on because the body no longer responds to its own.

The high cost of insulin is largely due to a lack of competition and too few makers of the current products, says Shi. One of the best hopes for more affordable insulin is to increase market competition and drive down prices with the introduction of so-called biosimilar drugs, which are highly similar versions of the original biologic medications – and typically far less expensive.

Creating Competition in the Market

In July 2021, the FDA approved the first biosimilar product that could be used interchangeably with current insulin products. Called Semglee, it’s a long-acting insulin analog and the generic form of Lantus, the world’s leading basal insulin, whose patent expired in 2016. Semglee, which is made by the drug company Mylan, is now available under some 2022 insurance plans and is approved for patients with type 1 and type 2 diabetes. But Semglee isn’t inexpensive – it’s around $133 per vial without insurance. Some versions of Lantus retail for more than $300.

The introduction of insulin biosimilars won’t bring major price cuts anytime soon, says Jing Luo, MD, an assistant professor of medicine at the University of Pittsburgh. One reason, he says, is that it takes years for drugmakers to develop the expertise and capacity to scale up production of biosimilars. Still, Luo is optimistic that we’ll get there in the next 2-3 years, and once we do, it could mean insulin would cost 10 times less.

Luo cites the work of the nonprofit Civica Rx. In March, the organization announced it would produce large-scale generic insulin in an effort to drive down cost.

The company will produce three forms of insulin to be used interchangeably with Lantus, Humalog, and Novolog. The products will be sold for no more than $30 a vial. They’ve already started building their manufacturing plant in Petersburg, VA, and will have products available for purchase by 2024, pending FDA approval.

Additionally, the state of California plans to produce its own generic insulin. The state is investing $50 million to make biosimilar insulin products and another $50 million to build a manufacturing facility.

Not Soon Enough

But for many, price cuts aren’t happening fast enough. Allison Bailey of Ames, IA, who has type 1 diabetes, says that it can feel daunting sometimes to find a way to pay, but she couldn’t survive without the life-saving medication. At times, it’s cost her up to $500 to fill her prescription. Bailey was eventually able to adjust her prescription to a less expensive insulin, but the 35-year-old graphic designer says her insurance coverage still takes up a sizable chunk of her monthly expenses.

The introduction of biosimilars has not driven down the price of insulin fast enough for patients like Bailey, says Robert A. Gabbay, MD, PhD, chief science and medical officer at the American Diabetes Association. That’s why the association is pushing legislation to bring down insulin prices. It lobbied hard to establish a $35-per-month Medicare price cap that will go into effect in 2023. Now it’s focused its efforts on expanding the caps to private insurers, a move that was voted down by Republicans in Congress as part of the Inflation Reduction Act.

“We want to see some transparency in pricing; right now, everyone just points fingers at each other and we don’t know who’s to blame,” Gabbay says.

But people with diabetes like Haskins and Bailey agree that competition from biosimilars and price caps could help bring down what they view as the exorbitant prices for medications they need. “I’m lucky I have insurance, but for those who don’t, it’s often a life-or-death situation,” says Haskins

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October 26, 2022