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Pharmaceutical companies and pharmacy benefit managers testified in front of the U.S. Senators May 10th, during a hearing on the costs of insulin and other prescription medications.
Sen. Bernie Sanders (I-Vt.), chairman of the Senate Health, Education, Labor, and Pensions Committee, led the committee in a hearing titled “The Need to Make Insulin Affordable for All Americans,” which heard testimony from the CEOs of major insulin manufacturers Eli Lilly and Company, Novo Nordisk, and Sanofi, and top executives from the major pharmacy benefit managers (PBMs) of CVS Health, Express Scripts, and OptumRX.
Sanders’ opening remarks, which can be watched here, stressed how high the cost of insulin is for American citizens, especially those who are not insured, compared to diabetes patients from other parts of the world, insisting on the need to lower prices, making insulin available to all those in need.
The Senate Committee on Health, Education, Labor, and Pensions chairman expressed his gratitude towards the CEOs of Eli Lilly, Sanofi and Novo Nordisk – the three major manufacturers of insulin – as well as the heads of CVS/Caremark, Express Scripts, and Optum Rx – the three major Pharmacy Benefit Managers – for being present to the hearing and thanked Eli Lilly, Sanofi and Novo Nordisk for, in recent months, “substantially lowering their lists prices for some of their insulin products”.
A day before the hearing, Sanders released a digital short featuring Americans who rely on insulin.
“I use about seven vials every three months and the price of that is $2,267.99,” Laura Marston said during a roundtable discussion with the senator. “I’m about to turn 41 next week. I’ve used the same insulin since I was 14. Nothing has changed about it and I remember my mother buying my first vial for $20.”
Senator Sanders wanted to make sure the audience understood the consequences of the insulin crisis. “I want to acknowledge those whom we have lost because they could not afford the insulin that they needed to keep them alive”, he said. “Alec Smith, was 24 years old and dreamed of opening a sports bar. He is dead. Antavia Lee-Worsham was 22-years old and worked two jobs. She is dead. Allen Rivas was 20 years old and had already lost his home because of insulin costs. He’s dead. And these are just a few of the many Americans who have needlessly lost their lives because of the unaffordability of insulin.”
Senator Sanders admitted the battle to be a little bit personal, since he took a busload of American diabetics from Detroit, Michigan to Windsor Ontario to purchase the life-saving insulin that they needed for one-tenth the price they were paying in the United States.
“This committee is determined to end the outrage in which Americans pay, by far, the highest prices in the world for virtually every brand name prescription drug on the market – whether it is a drug for cancer, heart disease, asthma, or whatever”, Sanders said.”We want to know why there are Americans who are dying, or are becoming much sicker than they should, because they can’t afford the medicine they need. Why, in the richest country on Earth, do 1.3 million Americans ration insulin because of the cost? Why are 1 out of 4 Americans not able to afford the prescription drugs their doctors prescribe?”
Sanders urged the witnesses to think about the people who die because they can’t afford medicine.
“I, for the life of me, just don’t understand how, when you have something that saves a life and it costs you a few bucks to manufacture … why we can’t make that product available to all at a price that they can afford,” Sanders said. “That is a moral issue, so we’ve got a lot of work to do. But we clearly need revolutionary changes in the way we do prescription drugs in this country.”
Wisconsin Democratic Sen. Tammy Baldwin recalled previously asking officials about the array of prices for insulin and being told that “it’s complicated.”
“One thing I can say when we look at people over profits, is greed is not complicated,” Baldwin said before getting the six witnesses to confirm stock buybacks their companies or patient companies issued during 2022.
While Americans pay outrageously high prices for prescription drugs, the pharmaceutical industry and the PBMs make enormous profits, Sanders added.
In 2021, 10 major pharmaceutical companies in America made over $100 billion in profits – a 137% increase from the previous year. The 50 top executives in these companies received over $1.9 billion in total compensation in 2021 and are in line to receive billions more in golden parachutes once they leave their companies.
Last year, the 3 major PBMs in America made $27.5 billion in profits – a 483% increase over the past decade. These PBMs manage 80 percent of all prescription drugs in America.
While a vial of insulin costs less than $10 to manufacture, Eli Lilly increased the price of Humalog 34 times since 1996 from $21 to $275—a 1,200 percent increase. Novo Nordisk increased the price of Novolog 28 times from $40 in 2001 to $289—a 625 percent increase. Sanofi increased the price of Lantus 28 times from $35 in 2001 to $292—a 730 percent increase.
The problem, Senator Sanders stated, is unique to the United States. In France, 20 years ago, the cost of Lantus was $40. Today, it has gone down to just $24.
As a result of public outrage, major pharmaceutical companies have announced that they will be substantially reducing the price of some insulin products.
Eli Lilly announced it would reduce the price of Humalog by 70 percent later this year—from $275 to $83. Eli Lilly also decreased the price of its generic Humalog to $25 per vial.
Novo Nordisk announced it would reduce the price of Novolog by 75 percent beginning next year—from $289 to $72.
After recently presenting its plans to pay $2.9 billion for the biotech firm Provention Bio and its recently FDA-approved type 1 diabetes therapy, Tzield, Sanofi announced it would reduce the price of Lantus by 78 percent beginning next year—from $292 to $64.
The committee needs to make sure, its chairman stressed, that these price reductions go into effect so that every American with diabetes gets the insulin they need at an affordable price, and must see to it that the American people no longer pay, by far, the highest prices in the world for prescription drugs.
Testifying on May 10th were the CEOs of major insulin manufacturers Eli Lilly and Co – David Ricks, Novo Nordisk – Lars Fruergaard Jørgensen, and Sanofi – Paul Hudson, which together control 90% of the U.S. market. Top PBM executives from CVS Health Corp – David Joyner, Cigna Group’s Express Scripts – Adam Kautzner, and UnitedHealth Group Inc’s Optum RX – Heather Cianfrocco, which control 80% of the prescription drug market, were also present.
The Leaders of major insulin makers and pharmacy benefit managers (PBMs) traded blame for the life-saving drug’s high price.
Ricks, Jørgensen and Hudson all testified that their companies ensure that customers pay less than $35 for all of their insulin products.
All three later testified that they have programs in place to help people in the United States who don’t have health insurance to access insulin for less than $35.