It’s no secret that drug costs are rising — in Arizona, the average annual cost of prescription drug treatment in the state rose by 57.8% from 2012 to 2017, according to the AARP. In comparison, the average annual income for Arizonans increased by only 12%.
The skyrocketing cost of drugs has had devastating consequences; in 2017, 26% of Arizona residents ages 19-64 stopped taking medication as prescribed due to cost.
The rising cost of insulin has had a particularly brutal impact on the more than 636,000 Arizonans who live with diabetes or pre-diabetes.
There are only three insulin producers in the U.S. — Eli Lilly, Novo Nordisk and Sanofi — and they’ve each raised their prices in recent years.
Eli Lilly responded to the outcry about price hikes by announcing a cheaper, fast-acting insulin earlier this year. The company’s Insulin Lispro was launched at $137.35 per vial, half of the price of their more expensive brand, Humalog.
Phoenix residents Julie and Taylor Hoffman were instantly relieved when they heard a cheaper product was available, but after calling more than 100 Arizona pharmacies, they still couldn’t find the alternative.
“Every single pharmacy in Arizona has told me no. It’s nowhere to be found,” Julie Hoffman told the Arizona Republic. “It’s indicative of what we’ve been dealing with for years and relevant just to the state of the pharmaceutical industry.”
Eli Lilly said Lispro was available in all 50 states, but the Arizona Republic itself contacted 20 pharmacies across the state in a random survey in June. None had the cheaper, generic drug in stock. Eli Lilly said it could be an “awareness issue” and they were working to make pharmacists aware of the new product. But skeptics accuse the company of announcing the cheaper drug for good press and say it has little interest — or incentive — to make it widely available.
While pharmacy fills for the cheaper insulin began to increase slightly in August, Politico reports it still accounts for less than 20% of the market shared with Humalog and Admelog, another rapid-acting insulin from Sanofi that saw a price decrease this summer.
Several months later, many patients and pharmacists still remain unable to find the drug, while others reported being unaware that Humalog went generic. The drug has also failed to take off because many leading pharmacy benefit managers, such as Express Scripts, currently exclude coverage for Lispro, and only one in 5 people with private insurance and one in 4 with Medicare Part D plans have access to Lispro through insurance.
Eli Lilly spokesperson Greg Kueterman told Politico they want to increase those numbers, but some advocates for people with diabetes see Lispro as a public-relations move to take the heat off drug manufacturers.
“Eli Lilly and the other insulin manufacturers could make this lifesaving drug even more affordable while still making enormous profits,” said Elizabeth Pfiester, founder and executive director of T1International, an international nonprofit that advocates for people with Type 1 diabetes.
Eli Lilly isn’t the only company under fire for its price hikes. In 2012, diabetics in Arizona paid an average total of $2,907 for the Sanofi-branded insulin known as Lantus. By 2017, the annual price of Lantus surged to $4,702, according to an analysis from the State Health Access Data Assistance Center.
The rising cost of prescription drugs isn’t isolated to Arizona, either; Americans spent $535 billion on prescription drug costs in 2018, a 50% increase since 2010, according to an estimate from Pew Charitable Trusts.
House Democrats introduced legislation this year to lower drug costs, but it appears likely to run into the obstructionist buzzsaw that is the Republican-controlled Senate.
While federal legislation appears unlikely, states are increasingly stepping in to fill the void.
In 2019, 33 states have passed a record 51 laws to address drug prices, affordability and access, according to the National Academy for State Health Policy, a nonprofit advocacy group that develops model legislation and promotes such laws.
Arizona is not one of those states. But California is, and the state’s 2017 drug price transparency law is now providing a peek behind the curtain of the nation’s skyrocketing drug prices.
California state officials recently released their first report on price increases that pharmaceutical companies sought to obscure and its findings were startling. The report found that drugmakers raised the “wholesale acquisition cost” of their drugs — the list price for wholesalers without discounts or rebates — by a median of 25.8% from 2017 through the first quarter of 2019, according to the California Office of Statewide Health Planning and Development.
Generic drugs saw the largest median increase of 37.6% during that time. This increase was roughly 19 times greater than the rate of inflation during the period (2%).
Specific drugs that saw notably high price hikes included a generic liquid version of Prozac, which rose from $9 to $69 in the first quarter of 2019 alone, an astounding 667% increase.
Guanfacine, a generic drug for attention deficit hyperactivity disorder, or ADHD, rose by more than 200% in Q1 of 2019 for 100 2-milligram pills. Amneal Pharmaceuticals, which manufactures Guanfacine, said the price increases were due to “manufacturing costs” and “market conditions.”
“Even at a time when there is a microscope on this industry, they’re going ahead with drug price increases for hundreds of drugs well above the rate of inflation,” Anthony Wright, executive director of the California advocacy group Health Access, told the Los Angeles Times.
Four other states — Colorado, Oregon, Texas and Washington — passed similar drug transparency laws in 2019, and will now require drug companies to provide information to states and consumers on the list prices of drugs and planned price increases.
Elsewhere, Maryland and Maine approved the creation of prescription drug affordability boards which will review the cost of drugs and eventually have the ability to put a cap on drug prices. Other states enacted legislation allowing the importation of cheaper prescription drugs from Canada.
While states across the country enact wide-ranging reforms, Arizona’s Republican-led state legislature has mostly worked around the margins.
State lawmakers passed HB 2166 in 2019, which reduces patients’ out-of-pocket costs by requiring health insurers to count the value of coupons or copay assistance towards a patient’s deductible in cases where no generic version of a drug exists.
But more significant reform has remained elusive in Arizona and drug prices continue to increase.
In the first half of 2019, pharmaceutical companies raised the price of more than 3,400 drugs, an increase of 17% from the same time period in 2018. The average price increase of these drugs was over 10%, according to an analysis from Rx Savings Solutions, a consulting firm advising employers on health care costs.
Americans want government action on drug prices
Americans spend more on prescription drugs than anyone else in the world, and appear to be growing frustrated by government inaction.
A February poll from the Kaiser Family Foundation found that 63% of U.S. adults — including 53% of Republicans and 72% of Democrats — think there isn’t as much regulation as there should be when it comes to limiting the price of prescription drugs.
Eighty-eight percent of Americans also support requiring drug companies to include list prices in their ads.
California’s transparency law focuses only on the list price for wholesalers and does not reflect discounts or rebates for insurers and pharmacy benefit managers, but advocates still view it as a step forward. The law not only requires companies to report drug price increases quarterly, it also mandates that they explain why they are raising prices.
That information, in addition to price transparency, could create “one of the more comprehensive and official drug databases on prices that we have nationwide,” Anthony Wright, executive director of the California advocacy group Health Access, told the Los Angeles Times. “That, in itself, is progress, so that we can get better information on the rationale for drug price increases.”
Whether Arizona passes a similar law — or any kind of significant law addressing drug costs — remains to be seen.
If the state doesn’t and recent trends continue, drug prices could continue to rise, and more and more Arizonans could be forced to stop taking their medications.