Report faults ‘broken’ system for insulin price spikes

A report from the offices of Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR), who lead the Senate Finance Committee, concludes that insulin prices are rising because of a “broken” system that rewards insulin makers for raising drug costs. The report states, “Rather than seeking to undercut its competitors’ pricing, from 2014 on Novo Nordisk engaged in a cat-and-mouse strategy of pricing that followed Sanofi’s price increases closely, sometimes mirroring them within days or even hours.” The authors of the report analyzed more than 100,000 pages of internal documents from various companies. They found companies “aggressively” raised the list prices of insulin products “absent significant advances in the efficacy of the drugs.” The report also cites PBMs, which charge fees and are paid a percentage of the rebate based on the drug’s list price. As a result, drug companies raise the list prices of their drugs so PBMs get larger rebates and drugmakers can secure coverage of the drug by health plans, according to the senators. The study authors noted that in July 2013, Sanofi offered rebates between 2% and 4% of a drug’s list price for inclusion on a health plan’s list of covered drugs. In 2018, Sanofi’s rebates were as high as 56%. The new report also included detailed list price increases for a number of insulin products.