How Soaring Insulin Prices Are Costing Medicare Billions
Health Care

How Soaring Insulin Prices Are Costing Medicare Billions

Lucy Nicholson/Reuters

Insulin prices have sparked outrage in recent months, with Congress holding hearings on the issue and launching bipartisan investigations into why the cost of the hormone used to treat diabetes — discovered nearly a century ago — has soared over the past two decades.

The House Energy and Commerce oversight subcommittee held a hearing on insulin prices this week and will hold another next week. Executives from the three companies that dominate the global insulin market — Eli Lilly, Novo Nordisk and Sanofi — are expected to testify at the upcoming hearing.

“We want to know why the cost of this life-saving drug has skyrocketed in recent years, and why they’re not offering more lower-cost alternatives to patients,” Rep. Diana DeGette (D-CO), who chairs the subcommittee, said this week.

Amid the increased pressure from lawmakers, Eli Lilly last month said it would begin selling a generic version of its insulin Humalog at half the retail price. And health insurer Cigna’s Express Scripts pharmacy benefit manager announced this week that it would cap the out-of-pocket copay for patients on insulin at $25 a month. "What we're hoping is that we're going to see more diabetics taking more insulin, [fewer] complications for those patients, and hopefully lower health care costs," Steve Miller, Cigna's chief clinical officer, told NPR.

Why it matters: The human toll of rising insulin prices — and diabetics rationing the drug as a result, sometimes with deadly consequences — makes this a crisis that desperately needs to be addressed. But there’s a fiscal element to the story, too: Total Medicare Part D spending on insulin grew from $1.4 billion in 2007 to $13.3 billion in 2017, an 840% increase, according to a report published this week by the Kaiser Family Foundation.