Insulin’s surging price turns diabetes staple into luxury good

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Patients with diabetes are constantly being offered the technological equivalent of the latest smartphone. Trouble is, many can only afford a basic handset.

The three drugmakers that dominate the world diabetes market—Indianapolis-based Eli Lilly and Co., Novo Nordisk A/S and Sanofi—are introducing improved forms of insulin, the sugar-regulating hormone some patients require, with a price tag to match. But with diabetes tearing across the developing world, health officials say the focus must return to meeting basic needs.

The  World Health Organization, in its first global report Wednesday on the diabetes epidemic, pointed to affordable insulin as crucial for the millions of patients who live in India, China, and other countries where few can pay for drugs. The new engineered versions of the hormone provide few demonstrated advantages over cheaper alternatives, the WHO said.

“Older, cheaper insulins may not be as good, but they may only be 10 percent worse,” said Jonathan Shaw, a diabetes consultant at the Baker IDI Heart & Diabetes Institute in Melbourne. “And if you can afford to get that extra 10 or 20 percent, that’s fine. But if you can’t, it’s a lot better than nothing.”
Three Days’ Work

Almost a century after the hormone was first extracted from calves’ pancreas, the price of engineered insulin is soaring while the basic product remains too scarce. Novo of Denmark, the market leader whose stock price has returned 60 percent in the past two years, derived less than a fifth of its $9.6 billion in insulin sales last year from basic human ones.

The price of insulin has risen more than three-fold over the past decade in the U.S. as engineered forms became the norm. A month of insulin treatment in Brazil would now cost the lowest-paid government worker the equivalent of about three days of pay, according to a study cited in the WHO report. That would be seven days in Nepal and almost 20 days in Malawi.

Avoiding amputation

For 23 of the world’s 48 poorest countries, Novo sells human insulin—the cheaper kind—for less than 19 cents per day per person. That program doesn’t include China, India, Brazil, Indonesia or the U.S., where half of adults with diabetes live, though Novo says its floor prices are similar in low-income countries.

The discounts aren’t enough. Out of about 100 million people globally who need injections of the hormone, roughly half struggle to obtain it, said David Beran, a researcher at the University of Geneva’s division of tropical and humanitarian medicine. Beran says he and colleagues have identified a list of 39 companies that may be able to supply cheaper insulin more widely. They include India’s Biocon Ltd. and Wockhardt Ltd. as well as Gan & Lee Pharmaceutical Ltd. in China.

Doctors say a discussion with drugmakers is needed to boost production of simpler forms of the hormone to avoid leaving millions at risk of limb amputation, kidney failure and premature death. No generic or inexpensive form is available globally, they say.

Price dialogue

The problem doesn’t necessarily lie with drugmakers, according to Novo. “There are challenges in the supply chain including high price mark-ups, which hinder people with diabetes from getting insulin at an affordable price,” Charlotte Ersbøll, vice president for corporate stakeholder engagement at the Bagsvaerd, Denmark-based company, said by telephone. “We are working with partners to find solutions.”

Insulin is only one cost diabetics incur. Patients also struggle for access to test strips to read their blood-sugar levels, pre-filled pens to inject the medicine and expert advice, according to Indianapolis-based Lilly. Like Paris-based Sanofi and Novo, the company has access programs in low-income countries. Sanofi, whose engineered insulin Lantus faces copycat challengers for the first time, says its focus is on innovative solutions that can represent a breakthrough for patients.

“We need to engage in a dialogue around pricing,” Etienne Krug, director of the WHO’s department for management of non-communicable diseases, disability, violence and injury prevention, said in an interview. The Geneva-based agency will seek to encourage pharmaceutical and diagnostics companies “to continue producing the cheapest versions of those medicines and tests” that are effective as well as to ensure that “they are widely disseminated,” he said.

Trillions in losses

Insulin is big business, commanding global sales of $23 billion last year, with more than three quarters of that stemming from the new generation of products, according to Bloomberg Intelligence. Yet that amount is a fraction of the toll the diabetes epidemic may extract from economic growth, especially as the disease strikes younger people in their peak economic years. In one study cited by the WHO, costs both direct and indirect will lead to $1.7 trillion in gross domestic product losses from 2011 to 2030.

Most people suffer from a form of diabetes known as type 2, in which patients’ bodies become resistant to insulin or don’t produce enough to manage the level of sugar in the blood—making some almost as dependent on the hormone as the rarer type 1 sufferers.

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