Why does insulin cost as much as it does in the US?

A question for those in the health/pharma realm: why does insulin cost as much as it does in the US? Why is it so much more expensive here than other countries?

Is it solely due to an oligopoly where producers charge whatever they want, or is there some additional complexity driving the price up?

Because the companies can charge that much. Seriously, that’s basically it. Other countries have stronger regulations and negotiate as a whole country on what they will pay for the drugs, and if one of the 3 companies that makes insulin doesn’t accept at that pricepoint they can’t sell any in the country. Here in the US these companies have all raised their prices and there isn’t much downward competition on those prices.

Additionally, there isn’t a generic “insulin”, as these companies have kept making gradual incremental improvements to it that have led to insulin being under patent for so long. (the original patent was sold for $1 as the guy thought no one should profit off of insulin…)

Thanks. That was my thought, but nice to have it confirmed.

Makes you understand why so many hate big pharma. Jacking up the price just because you are in an oligopoly position for a necessity seems wrong to me. I wonder why a generic hasn’t stepped in on one of the older formulations, as it would seem to be a fertile market.

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I believe there is about to be a generic available, I read something recently saying it’s about a year or two away. Though I could be sorely mistaken.

I read that CA was going to manufacture their own and sell it at/near cost

Do you see how fat the USA is? Totally demand and oligopoly. Plus the US prolly supplementing the rest of the world.

Yeah, this needs to be regulated more. Life-savings meds is not a situation where free-market conditions hold.

Many countries have single pay systems so one large entity can negotiate with the drug companies.

Also in many countries the big drug companies don’t have significant local research facilities. Thus they can’t threaten to move their research facilities to another country if the country plays hardball on prices.

Some countries also have lower patent protection on drugs than the US so competition from generics come into play earlier.

Lastly, the pharmaceuticals have much stronger lobbying power in the US than in other countries. US is fairly unique in the power of corporate lobbyists.

I’m guessing that a big reason for the high insulin price in the US is the low prices of insulin in the rest of the world.
Also the same guess for most every other expensive drug.

We are certainly subsidizing R&D costs for the rest of the world, no question. And I think there’s an appropriate regulatory solution to that too.

I don’t mind subsidizing the R&D costs for Ethiopia and Kenya, but Germany and Canada can pay their fair share and I don’t know that they are.

Cap the differential charged between G7 countries maybe. If it’s $15 in Canada, you can’t charge more than $30 in the US. If you need to charge Americans $40 then you’ve got to raise the price on Canadians to at least $20. No more than a 2-1 price differential allowed. That is that whatever it costs in the US cannot be more than double what it costs in the least expensive G7 country.

Now… if it really and truly costs so much that Americans need to pay more than double the current price in Canada… then convince the Canadians to also pay more.

I’m not sure that G7 is the right line, nor 2-1. But something along those lines.

This is certainly true for newly developed expensive drugs. It may be true for insulin too, but it shouldn’t be IMO. It’s been around for a long time, and should be able to be manufactured and sold cheaply.

There is a good chance that as US drug prices go down over time the pharmaceuticals will bargain harder in the rest of the world and their prices will go up over time. Until then, the rest of the world is happy with the US effectively subsidizing our drug prices.

It is a bit like the free ride that NATO countries enjoyed on defence spending until Trump shook things up.

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A variation of your suggested approach is what Canada, and some other rich countries other than the US, already do when setting the price that the drug companies may charge in their countries. For example, Canada has established a comparator group of countries and set the price as the median of the prices in those countries.