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Op-Ed: $35 insulin? Why didn’t we think
of that?
By Eric D. Hargan | RealClearWire
As we move through
National Kidney Month, we should keep focused on one of the worst kidney
diseases out there: diabetes. Millions of American diabetic patients
require regular treatment with insulin, and the prices for many types of
insulin can be quite high. In response, President Joe Biden announced in
his State of the Union speech that he would be working on capping the
price of insulin at $35 per month for everyone. |
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 Those of you in the field may have been jolted by this choice of pricing,
because the Trump Administration set that exact same dollar amount, $35\, on
insulin for Medicare patients under a Part D voluntary model in 2020. Now, that
was not the only attempt in 2020 to lower insulin costs. Community health
centers were also required to provide insulin at near cost to their patients.
This requirement on community health centers was overturned by the Biden
Administration less than six months ago, and now community health centers are
under no such requirement. So, the Administration seems to be going one step
forward, one step back on this issue of lowering insulin costs for patients.
The details are, naturally, lacking on what exactly President Biden meant by
this national price cap on insulin. In this light, it is worth noting that
President Biden seems to be following a proposal by Senator Warnock, which would
fix the price of insulin at $35 nationwide, including by private insurers. This
legislative proposal is just one of many out now discussing setting fixed
prices. Indeed, setting fixed prices on goods seems to be in the air, as it was
during the last period of painfully high inflation, the 1970’s. When prices are
rising quickly, as now for the first time in decades, people instinctively wish
for prices to return to stability, and think maybe the solution is just to pass
a law fixing prices by force.
But in debating the issues on insulin pricing, what is often little understood
is that there are different kinds of insulin, and that these kinds of insulin
have wildly different costs. Certain insulins have been engineered to have
significant advantages over others and are often much higher-priced. Much effort
and ingenuity has been put into developing these new varieties of insulin, and
all that effort has come at a cost. In addition, fixing insulin prices
nationally may undermine the current system of private negotiations and the
progress towards more and better generics. And will the $35 solution offered be
the oldest and cheapest, and not necessarily the best, insulin?
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Now, everyone wants diabetes patients to have access to useful insulin to help
them live longer, healthier lives. There is no “anti-access” lobby trying to
prevent patients from obtaining medicine. The question is, as it usually is:
How? How best to obtain and keep access to ever-better medical goods and
services? Is fixing prices for goods nationally the best way to do so? Or, on
the contrary, will this action slow continuing research and development into
medical solutions in this area? If fixing prices is likely to slow or stop
progress in this area, are we so satisfied with the current state of the
insulins we have that we have agreed not to progress, and that the diabetic
patients needing insulin now have the best solution they ever will?
Anyone looking to balance current needs with future ones needs to balance access
now with access tomorrow. We do need to use the technologies we currently have
to help our citizens. Otherwise, why have them? But at the same time, we must
realize that the tools we have now are not perfect, and we can do better. That
realization must drive us to make sure that our system continues to drive
towards better solutions, including ever-better technologies. While the cost of
drugs is high, the cost of fixing the price of drugs may be higher still.
Eric D. Hargan ( @EricDHargan ) founded the Hargan Group and was
the deputy secretary of the Department of Health and Human Services after
serving as acting secretary.
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