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FTC Report Shows Big Pharma Middlemen Jack Up Prices by Up to 7,736%
Pharmacy benefit managers "are raking in billions in excess revenue—$7.3 billion over just five years—while squeezing independent pharmacies and leaving patients and health plan sponsors with skyrocketing costs."
Jan 14, 2025
The U.S. Federal Trade Commission on Tuesday published the second part of its investigation into how prescription drug middlemen are marking up the prices of specialty generic drugs dispensed at their affiliated pharmacies by hundreds—and in some cases, thousands—of percent, underscoring what advocates say is the need for urgent action by policymakers.
The FTC's second interim staff report on consolidated pharmacy benefit managers (PBMs) found that the three largest of these middlemen—CVS Health's Caremark Rx, Cigna Group's Express Scripts, and UnitedHealth Group's OptumRx—"marked up two specialty generic cancer drugs by thousands of percent and then paid their affiliated pharmacies hundreds of millions of dollars of dispensing revenue in excess of estimated acquisition costs for each drug annually."
"Of the specialty generic drugs analyzed in this report and dispensed by the 'Big Three' PBMs' affiliated pharmacies for commercial health plan members between 2020 and 2022, 63% were reimbursed at rates marked up by more than 100% over their estimated acquisition cost... while 22% were marked up by more than 1,000%," the report states.
"For the pulmonary hypertension drug tadalafil (generic Adcirca), for example, pharmacies purchased the drug at an average of $27 in 2022, yet the Big Three PBMs marked up the drug by $2,079 and paid their affiliated pharmacies $2,106, on average, for a 30-day supply of the medication on commercial claims," the publication notes. That's a staggering average markup of 7,736%.
"The FTC's second interim report lays bare the blatant profiteering by PBM giants."
"Such significant markups allowed the Big Three PBMs and their affiliated specialty pharmacies to generate more than $7.3 billion in revenue from dispensing drugs in excess of the drugs' estimated acquisition costs from 2017-22," the FTC said. "The Big Three PBMs netted such significant revenues all while patient, employer, and other healthcare plan sponsor payments for drugs steadily increased annually."
The new analysis follows a July 2024 report that revealed Big Three PBM-affiliated pharmacies received 68% of the dispensing revenue generated by specialty drugs in 2023, a 14% increase from 2016.
"The FTC staff's second interim report finds that the three major pharmacy benefit managers hiked costs for a wide range of lifesaving drugs, including medications to treat heart disease and cancer," FTC Chair Lina Khan said in a statement Tuesday. "The FTC should keep using its tools to investigate practices that may inflate drug costs, squeeze independent pharmacies, and deprive Americans of affordable, accessible healthcare—and should act swiftly to stop any illegal conduct."
Khan's time as chair is limited. Republican U.S. President-elect Donald Trump's inauguration is next week and he has named Andrew Ferguson as the next FTC chair. As Ferguson is already on the commission, his elevation to chair won't require Senate confirmation.
Greg Lopes, spokesperson for the Pharmaceutical Care Management Association, a PBM lobby group, said Tuesday that "it's clear this report again fails to consider the entirety of the prescription drug supply chain and makes sweeping assertions about the role of PBMs disconnected from a full appreciation of their critical cost-saving role for employers, unions, taxpayers, and patients."
Last September, the FTC sued the Big Three and their affiliated group purchasing organizations for allegedly "engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients' access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients."
FTC Office of Policy Planning Director Hannah Garden-Monheit said Tuesday that the problem of PBM price inflation "is growing at an alarming rate, which means there is an urgent need for policymakers to address it."
To that end, U.S. Sens. Maria Cantwell (D-Wash.) and Chuck Grassley (R-Iowa) introduced the Pharmacy Benefit Manager Transparency Act of 2023, a bill backed by the AARP aimed at increasing transparency and "holding PBMs accountable for deceptive and unfair practices that drive up prescription drug costs and force independent pharmacies out of business."
"This report is a call to action for policymakers to dismantle these exploitative schemes."
Responding to the FTC report, Emma Freer, senior policy analyst for healthcare at the American Economic Liberties Project—a corporate accountability and antitrust advocacy group—said in a statement Tuesday that "the FTC's second interim report lays bare the blatant profiteering by PBM giants, which are marking up lifesaving drugs like cancer, HIV, and multiple sclerosis treatments by thousands of percent and forcing patients to pay the price."
"By steering prescriptions for the most expensive specialty generic drugs to their own pharmacies, PBMs are raking in billions in excess revenue—$7.3 billion over just five years—while squeezing independent pharmacies and leaving patients and health plan sponsors with skyrocketing costs," Freer added. "This report is a call to action for policymakers to dismantle these exploitative schemes, outlaw the rebate system driving up prices, and restore fairness and affordability to the U.S. healthcare system."
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FTC Sues Big Pharma Middlemen for Inflating Insulin Prices
"Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need lifesaving medications," said one agency leader.
Sep 20, 2024
The Federal Trade Commission on Friday initiated a legal process against middlemen that collectively administer about 80% of all prescriptions in the United States, accusing them of artificially inflating the list price of insulin drugs and blocking patients from accessing cheaper products.
The FTC action targets the "Big Three" pharmacy benefit managers (PBMs): CVS Health's Caremark Rx, Cigna's Express Scripts (ESI), and UnitedHealth Group's OptumRx. It also involves their affiliated group purchasing organizations (GPOs): Zinc Health Services, Ascent Health Services, and Emisar Pharma Services.
"Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed," said Rahul Rao, deputy director of the FTC's Bureau of Competition.
"Caremark, ESI, and Optum—as medication gatekeepers—have extracted millions of dollars off the backs of patients who need lifesaving medications," Rao continued. "The FTC's administrative action seeks to put an end to the Big Three PBMs' exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers."
The FTC's vote to begin the legal process by filing a complaint was 3-0. Led by Chair Lina Khan, the Democrats supported the move while the two Republicans, Commissioners Melissa Holyoak and Andrew N. Ferguson, recused.
The American Prospect executive editor David Dayen noted that "the complaint, which was filed in an administrative court, has not yet been made public, as it is undergoing redactions. Agency officials expect it to be made public on Monday."
However, in a statement after the vote, the FTC shared some details about the complaint's arguments that "Caremark, ESI, and Optum and their respective GPOs engaged in unfair methods of competition and unfair acts or practices under Section 5 of the FTC Act by incentivizing manufacturers to inflate insulin list prices, restricting patients' access to more affordable insulins on drug formularies, and shifting the cost of high list price insulins to vulnerable patient populations."
Rao emphasized that while the commission on Friday "exercised its discretion to move forward with suing only the PBMs and GPOs now, FTC staff's investigation has also shed light on the concerning and active role that the insulin manufacturers—Eli Lilly, Sanofi, and Novo Nordisk—play in the challenged conduct."
"All drug manufacturers should be on notice that their participation in the type of conduct challenged here can raise serious concerns, with a potential for significant consumer harm, and that the Bureau of Competition reserves the right to recommend naming drug manufacturers as defendants in any future enforcement actions over similar conduct," he said.
Emma Freer, senior policy analyst for healthcare at the American Economic Liberties Project, pointed out that "the FTC's case adds to the mounting, bipartisan criticism of the 'Big Three' PBMs, which for far too long have exploited their monopoly power to inflate drug prices and enrich shareholders at the expense of patients' health and pocketbooks."
"The lawsuit also exposes their industrywide abuse, using insulin—the price of which has soared over 1,200% since 1999—as a flagship example of how PBMs' rebate schemes distort markets and drive up costs for lifesaving drugs," Freer said. "While PBMs bear much of the blame, the FTC is right to also put brand-name manufacturers like Eli Lilly, Novo Nordisk, and Sanofi on notice for their role in this crisis. We're thrilled to see the commission bring this long overdue challenge against healthcare's most notorious middlemen, and hope to see it result in concrete reform and accountability."
As The New York Times reported:
Just weeks before the presidential election, the agency is tackling an issue that Vice President Kamala Harris has signaled an interest in. Campaigning at a community college in Raleigh, North Carolina, in August, Ms. Harris promised to "demand transparency from the middlemen who operate between Big Pharma and the insurance companies, who use opaque practices to raise your drug prices and profit off your need for medicine."
Former President Donald J. Trump has not campaigned on the issue, but in 2018, his administration proposed a sweeping change that would have threatened the benefit managers' business model. The proposal was never enacted. Mr. Trump's administration also created a model for capping Medicare patients' out-of-pocket costs for some insulin products that was later expanded under President [Joe] Biden.
The Times also noted that "some Republicans in Congress have proposed curbing some of the benefit managers' business practices. But other top Republicans have defended PBMs and said the FTC is overreaching."
Among the GOP's critics of PBMs is House Committee on Oversight and Accountability Chairman James Comer (R-Ky.), who highlighted his panel's investigations into the companies and praised the FTC move.
Another leading congressional critic of PBMs—and the country's failing for-profit healthcare system more broadly—is Senate Committee on Health, Education, Labor, and Pensions (HELP) Chair Bernie Sanders (I-Vt.), who caucuses with Democrats.
After a public pressure campaign led Eli Lilly, Novo Nordisk, and Sanofi to cut list prices of insulin products last year, Sanders held a hearing with their CEOs as well as PBM executives. At the time, he welcomed the voluntary reductions but also stressed that as "Americans pay outrageously high prices for prescription drugs, the pharmaceutical industry and the PBMs make enormous profits."
While the FTC's Friday action was widely praised—other than by the PBMs, who denied the allegations—some advocates hope the commission and other decision-makers will go even further in the future.
Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, called PBMs "some of the most predatory corporations in healthcare" and highlighted that "these companies have incredibly long rap sheets and convictions at the state level."
"I'm thrilled the FTC is going after these criminal enterprises," she said. "I hope this lawsuit, with its focus on kickbacks, is just the beginning. We also need action on how PBMs harm local pharmacies. Ultimately, these corporations need to be broken up."
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What the Inflation Reduction Act Has Meant for Healthcare 2 Years Later
From the $35 insulin co-pay to capping insurance premium costs, the legislation has been health-changing and life-changing.
Aug 30, 2024
I was honored to be at the White House this month for the Inflation Reduction Act anniversary event, featuring Americans sharing their stories of saving money and saving lives.
Thank you to the millions of people fighting every day for lower drug prices, to Congress for passing the Inflation Reduction Act, U.S. Vice President Kamala Harris for casting the deciding vote in the Senate, and President Joe Biden for signing it into law.
Meet Bob Parant, from New York. He’s a 71-year-old man who has been living with type 1 diabetes for over fifty years. He lost his leg in 2010, and became eligible for Medicare. Before the Inflation Reduction Act, the last price Bob paid for a vial of insulin was $580, which was “horrendous.”
We have made so much progress on healthcare. But as everyone reading this knows, there is so much more to do.
Listen to Pam Parker, from Maryland: She’s a retired electrician, 62 years old, and has been diabetic since she was 30. “I had to decide, a lot of months, between mortgage, groceries, utilities, and other things… I would juggle my expenses, and really juggle my healthcare.. I would eat less, or ration my insulin to make it last.. I had high blood pressure, I fell into a coma, my kidneys failed… they told me I coded.”
Learn from Robin Craycroft, from Missouri: When she turned 65 and had access to Medicare, the pharmacist told her that one insulin for three months was $3,000. “Everything that we had planned, cancelled, and our life just changed. And I felt such guilt over that… We’re gonna spend $2,000 a month (two insulin vials) to keep me alive. You start going through, am I worth it? Should I do that to [my husband]?”
Hear Steven Hadfield, from North Carolina: “Before the $35 cap, sometimes you had to skip a dose, sometimes you had to not test yourself, watch what you eat because you couldn’t afford it…”
The $35 insulin co-pay cap for people on Medicare is just one of the health-changing and life-changing parts of the Inflation Reduction Act.
This year, people on Medicare have their out of pocket Part D drug costs capped at around $3,500. And next year, the maximum drops down to $2,000. This means seniors on a fixed income won’t have to choose medicine over food or housing or anything else. Also recommended adult vaccines such as the new shingles vaccine are now free for Medicare recipients.
Pharmaceutical companies that raise their prices higher than inflation are required to pay Medicare a rebate, to encourage them to stop price gouging patients. And in 2026, price negotiations for the first 10 drugs under Medicare go into effect: lowering the costs of those drugs for millions of Americans. The savings will continue for patients and taxpayers as more drug prices are negotiated each year.
But the Inflation Reduction Act doesn’t just help people on Medicare. Over 21 million Americans like me get their health insurance through the Affordable Care Act marketplaces. When I was diagnosed with stage 4 cancer in 2017, I did not qualify for financial help for insurance. Thankfully I was able to afford a plan anyway, and to pay the maximum deductible for that year. A bargain compared to the over half a million dollars it cost to save my life.
I am so grateful to still be here, and for the Affordable Care Act made truly more affordable to millions of working Americans like me.
The American Rescue Plan, and then the Inflation Reduction Act, provided financial help for health insurance to many more who needed it. This law caps the cost of premiums at no more than 8.5% of your income, meaning people—especially older folks who face higher premiums, or people in more expensive healthcare markets—don’t get penalized, and can still afford the care they need.
We have made so much progress on healthcare. But as everyone reading this knows, there is so much more to do.
First, we have to defend the advances in the Inflation Reduction Act. A new administration and a new Congress next year means everything we’ve gained could be on the chopping block.
Second, the health insurance tax credits piece expires in 2025. Without that renewal, millions of Americans would go back to being priced out of health insurance.
Third, the Medicare provisions such as the $35 insulin cap, the drug price negotiation, and more, need to be expanded to everyone.
We are grateful to still be here, and to keep fighting until every American can get the healthcare they need. We cannot go back.
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Make Insulin Affordable With Public Pharma
To create sustainable change in the insulin market and to truly lower costs to patients, we need to think outside of the dominant systems that rely on corporate actors.
Aug 24, 2023
In March, the Big Three manufacturers of insulin, who control over 90% of the insulin market in the U.S., announced highly publicized list price cuts to some insulins, after decades of
unchecked price increases on the 100-year-old drug that costs $6 a vial to produce. In response, some claimed that California’s foray into the insulin market (by way of a contract with the nonprofit CivicaRx to produce the state’s own insulin) was no longer needed. But recent findings confirm what advocates have known for a long time: The system of fully private, profit-driven production is not working for patients.
Lilly’s insulin Lispro was supposed to be available for $25 as of May 1. T1International recently shared that the average list price quoted to patient advocates attempting to acquire the $25 insulin since May 1 has been $107.31, while Sen. Elizabeth Warren’s (D-WMass.) office found chain stores charged uninsured customers an average of $123 per vial for the generic insulin, and nearly half (43%) of surveyed pharmacies did not stock it.
To create sustainable change in the insulin market and to truly lower costs to patients, we need to think outside of the dominant systems that rely on corporate actors to implement change—we need public pharma options.
Ultimately, insulin manufacturers and the pharmaceutical industry must be held accountable for putting profits over patients through legislation that permits price-lowering solutions to move quickly ahead.
“Public Pharma” refers to options in which state actors take or complement roles that private companies usually have in pharma: manufacturing, distributing, and pricing prescription drugs. Three variations of Public Pharma are: public manufacturing, in which the state manufactures the drug; public procurement, in which states purchase drugs in bulk quantities at a lower price and distribute them; and public PBMs, in which the state(s) negotiate lower prices for public or private entities to purchase.
States who invest in public manufacturing of insulin and other medicines are investing in the future of their citizens. The demand for insulin, which is as essential as water to a person with type 1 diabetes, will only increase in the coming years, with rates of diabetes in young U.S. populations predicted to rise dramatically. The current faulty system has resulted in an estimated 1.3 million Americans rationing their insulin in the last year. States that provide affordable and accessible insulin will save money through fewer emergency room visits for diabetic ketoacidosis (DKA), a consequence of rationing that costs an average of $30,000 per ER visit. They can also count on a reduction of long-term complications caused by the inability to correctly manage diabetes with insulin, such as amputations, kidney failure, vision damage, and more. In 2019, taxpayer-funded programs like Medicare and Medicaid spent over $120 billion (65% of total expenditures) on total health expenditures, including over $25 billion on insulin. If patients were able to buy their medicine at a price that is close to the manufacturing cost—or better yet, receive it for free—money would be saved and quality of life would be vastly improved.
Public manufacturing will also create new jobs and allow states to take ownership of the supply chain. There is opportunity to sell the publicly produced medicines to other states interested in contracting for lower cost options. And of course, states are not limited to only addressing insulin costs, but can focus on other high priced drugs in the future, as California is doing with Naloxone.
Public Pharma initiatives, most specifically targeting insulin, have already been started in Washington, Maine, Michigan, and California, with Michigan and California both budgeting significant funds for the efforts ($150 million and $100 million, respectively). Establishing a manufacturing facility and getting FDA approval is a longer process, so while public manufacturing should be the end goal among the various pathways, establishing interim solutions with public PBMs (as Washington, Oregon, Nevada, and Connecticut have done with ArrayRX) and public procurement options can lower prices quickly and save states money. Additionally, creating a public-private partnership by contracting with a nonprofit like Civica, as California has done for their state brand CalRx, could lower costs for some patients as soon as 2024, since they are further along in the drug development and approval process for insulin. Ultimately, insulin manufacturers and the pharmaceutical industry must be held accountable for putting profits over patients through legislation that permits these and other price-lowering solutions to move quickly ahead.
Public manufacturing has already been implemented successfully by several states. Massachusetts and Michigan have both developed, manufactured, and marketed biologics (including vaccines, monoclonal antibodies, and immunoglobulins) in the past, and Massachusetts continues to do so today through MassBiologics. The California Department of Public Health produces BabyBIG, a biologic drug used to treat infant botulism, which was developed and produced in response to a high incidence of infant botulism cases in the state.
It’s time to put people over profit, and join #insulin4all advocates across the country in urging our state legislators to prioritize public pharma.
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Progressives Call On Schumer to Go Further to Lower Insulin Prices for All
"It is vital that affordable insulin access is provided to everyone, including those who do not have insurance," wrote healthcare advocates.
Jul 10, 2023
More than three dozen healthcare and consumer advocacy groups on Monday applauded recently passed legislation to expand access to lifesaving insulin—but with more than a million people in the U.S. still forced to ration the diabetes treatment due to skyrocketing costs, the groups said U.S. Senate Majority Leader Chuck Schumer must take further action to ensure no more Americans risk their health, or even die, due to insulin prices.
With the Senate expected to advance a packages that will address high drug prices, groups including Public Citizen, Metro New York Health Care for All, and Patients for Affordable Drugs told the Democratic leader, who represents New York, that any legislation must pass "the Alec Smith test."
Alec Smith died at the age of 26, less than a month after he aged out of his parents' insurance plan. He made just enough money to not qualify for any insurance subsidies or patient assistance programs and so was forced to pay for insulin for his Type 1 diabetes out of pocket—$1,300 per month. Unable to afford the medication on top of housing costs, bills, and other essentials, Smith rationed his insulin supply and died of ketoacidosis in 2017.
"Any insulin legislation that would not have prevented this tragedy fails the Alec Smith test," wrote the groups. "It is vital that affordable insulin access is provided to everyone, including those who do not have insurance, in addition to those who are privately insured."
"Insulin legislation advanced through the Senate should put an end to perverse arrangements between drug corporations and middlemen that stifle potential savings from lower-priced insulins and put patients' lives at risk."
The groups said the legislation must include three key elements, including:
- Ensuring people with private insurance and those without insurance, who are most vulnerable to rationing, have access to the insulin they need;
- Stopping insulin manufacturers from charging excessive prices, which they have raised as much as 1100% since the 1990s despite the products remaining the same and companies benefiting from low production costs; and
- Preventing anti-competitive tactics from drug corporations and middlemen from interfering with patient access to lower-priced insulin products, including biosimilars.
"As pharmacy benefit managers (PBMs) demonstrated preferences for covering insulin products with higher list prices to secure larger rebates, insulin manufacturers responded by raising prices in lockstep," wrote the groups. "Patients who pay out of pocket for all or a portion of list prices that have been sharply increased by drug corporations suffer under this scheme."
"Insulin legislation advanced through the Senate should put an end to perverse arrangements between drug corporations and middlemen that stifle potential savings from lower-priced insulins and put patients' lives at risk," they added.
The organizations credited the Democratic Party with passing medication price reforms in the Inflation Reduction Act and the American Rescue Plan, guaranteeing access to insulin for Medicare recipients for no more than $35 per month and lifting a cap on Medicaid rebates.
A recent study published in the Annals of Internal Medicine, however, showed that 1.3 million people in the U.S. are still forced to ration insulin, including 29.2% of people without insurance and nearly 20% of those with private insurance.
"Hopefully soon, some of these patients will feel improvements in access and pricing due the policies that have been enacted," wrote the groups, "but many require further relief—the Senate's work is far from complete."
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Why Are We Still Waiting for the $25 Insulin Eli Lilly Promised Us?
A lower-priced insulin doesn’t save lives if it’s unavailable. It is simply a strategic public relations move.
Jun 08, 2023
On March 1, Eli Lilly announced it would reduce the list prices of some of its insulins, including the generic Lispro, the same product as the name-brand Humalog. At a recent congressional hearing with the CEOs of insulin manufacturers and pharmacy benefit managers, David Ricks, Eli Lilly’s CEO, again celebrated that $25 insulin lispro was available to patients as of May 1. People with diabetes have worked tirelessly to reduce insulin costs for decades. So why aren’t we universally celebrating this announcement of lower prices?
Because it is now the end of May, and I—along with many others in my community—still haven’t been able to get the promised $25 insulin.
I have lived with type 1 diabetes for 22 years, more than ⅔ of my life. In that time, I’ve watched the price of insulin climb, while simultaneously listening to promises from big pharma and the organizations that accept their funding that ultimately led nowhere. However, when I first read that Eli Lilly was going to offer $25 vials of Lispro starting May 1, I was optimistic about what this could mean for the 7+ million people who rely on insulin daily.
I don't usually use insulin Lispro (but rather it’s brand name cousin per my insurance guidelines) so after Eli Lilly’s news, I confirmed with my insurance company that I wouldn’t need a new prescription to access Lispro. They said I wouldn’t—great, and off to the pharmacy I went to purchase my $25 insulin!
I went to my local pharmacy when my refill was up. But when I requested Lispro, the pharmacist shook his head: “We don’t have that in stock.” When I asked when it would be back in stock, he shrugged, “they send Lispro when they have it.” I decided to return at a later date as I happened to have a supply of insulin on hand at home, two weeks later, we had a similar exchange.
The experience was frustrating, however, it ended only in frustration because I was fortunate enough to have extra insulin at home, a prescription for the brand name equivalent, insurance to cover the brand name, and an income that allows me to do so. That is a combination of privilege and luck that many aren’t afforded. In another situation that frustration could have easily turned to a life-threatening and dangerous situation.
If Eli Lilly is going to promise $25 vials of insulin Lispro, it needs to be accessible. A lower-priced insulin doesn’t save lives if it’s unavailable, it is simply a strategic PR move.
And patients don’t have time to wait for Eli Lilly and other insulin manufacturers to follow through on their promises. Now is the time to cap the list price of all insulins.
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Sanders Grills Big Pharma CEOs Over Years of Deadly Price Gouging
"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," said the Vermont Independent.
May 10, 2023
U.S. Sen. Bernie Sanders on Wednesday paid his respects to the victims of insulin price gouging in front of the Big Pharma CEOs who are responsible and reiterated the need to make all lifesaving prescription drugs affordable.
Sanders (I-Vt.), chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP), opened the panel's hearing by acknowledging "the many Americans who have needlessly lost their lives because of the unaffordability of insulin" and "the thousands who wound up in emergency rooms and hospitals suffering from diabetic ketoacidosis—a very serious medical condition as a result of rationing their insulin."
"This is a problem that is unique to the United States."
Diabetes—a disease that can wreak havoc on organs, eyesight, and limbs if left unmanaged—affects more than 37 million U.S. adults and is the country's eighth leading cause of death, according to the U.S. Centers for Disease Control and Prevention. Although it costs less than $10 to produce a vial of insulin required to treat diabetes, uninsured patients in the U.S. pay nearly $300 per vial of the century-old drug because Eli Lilly and Company, Novo Nordisk, and Sanofi—the three pharmaceutical corporations that control 90% of the nation's lucrative insulin market—charge excessive prices with little resistance from federal lawmakers.
As Sanders noted, such corporate profiteering—a problem compounded by the widespread lack of coverage under the nation's for-profit healthcare system—forces many people to skip doses, with deadly consequences. Recent studies found that 1.3 million people in the U.S. ration insulin, including an estimated 1 in 4 people with Type 1 diabetes. People without insurance are the most likely to do so, followed by those with private insurance.
Ahead of the hearing, Sanders released a video featuring diabetes patients sharing their struggles to afford insulin in the U.S.
"Imagine just three companies having worldwide market dominance over such necessities as air and water," Steve Knievel, an advocate with Public Citizen's access to medicines program, said Wednesday in a statement. "This is what people with diabetes face with insulin."
Addressing the CEOs of the three aforementioned firms during the hearing, Sanders outlined how each has jacked up prices in recent decades:
Eli Lilly increased the price of Humalog 34 times since 1996 from $21 to $275—a 1,200% increase. The same exact product. No changes at all. The only reason for the huge increase in price during that period was that there was no legislation to stop them. In America, the drug companies could charge any price they want.
But it's not just Eli Lilly. Novo Nordisk increased the price of Novolog 28 times from $40 in 2001 to $289—a 625% increase.
And then there is Sanofi, a company that increased the price of Lantus 28 times from $35 in 2001 to $292—a 730% increase.
"In every instance it is the same exact product that rose astronomically," said Sanders. "And let's be clear. This is a problem that 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."
Sanders has famously accompanied Americans with diabetes on a two-mile trip from Detroit, Michigan to Windsor, Ontario. In Canada, people can purchase the exact same insulin product for one-tenth of the price they would pay in the U.S.
"We cannot rely on limited price concessions from insulin corporations to ensure this essential resource is accessible and fairly priced for Americans who need it."
Also in attendance at Wednesday's hearing were the leaders of CVS Health, Express Scripts, and OptumRX, three major pharmacy benefit managers (PBMs). Sanders took them to task, noting that "as insulin manufacturers continued to increase prices, PBMs signed secret deals to increase their profits by putting insulin products on their formularies not with the lowest list price but the ones that gave PBMs the most generous rebates."
Thanks to sustained public pressure and fresh policy changes—namely the Inflation Reduction Act's provision limiting Medicare beneficiaries' insulin copayments to $35 per month—Eli Lilly, Novo Nordisk, and Sanofi have all recently pledged to significantly lower the list prices for some of their insulin products. As Sanders explained:
Eli Lilly announced it would reduce the price of Humalog by 70% 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% beginning next year—from $289 to $72.
Sanofi announced it would reduce the price of Lantus by 78% beginning next year—from $292 to $64.
While Sanders thanked the three companies for taking what he called "an important step forward," he stressed that "we must make sure that these price reductions go into effect so that every American with diabetes gets the insulin they need at an affordable price," vowing to "hold a hearing early next year to make certain that happens."
Knievel, meanwhile, said that "we cannot rely on limited price concessions from insulin corporations to ensure this essential resource is accessible and fairly priced for Americans who need it, regardless of their insurance status or age."
His message was echoed by Margarida Jorge, head of Lower Drug Prices Now.
"Certainly, these multimillion-dollar CEOs will spend their time in front of the committee patting themselves on the back for bowing to public pressure and lowering the cost of insulin," Jorge said in a statement. "But let's be clear, the tens of millions of Americans who cannot afford their prescription medication should not have to depend on the goodwill of greedy corporations who have repeatedly shown they care about profits more than people to bring them relief from skyrocketing prescription costs."
Sanders and Rep. Cori Bush (D-Mo.) recently introduced the Insulin for All Act of 2023, which would cap insulin prices at $20 per vial.
Only federal legislation of this sort can "put an end to decades of price gouging that has led to preventable suffering and costs the lives of people with diabetes who need insulin to live," Knievel emphasized.
Meanwhile, Sanders made clear that the unaffordability of insulin is part of a much broader crisis and proceeded to ask:
If Eli Lilly can lower the price of Humalog by 70%, why is it still charging the American people about $200,000 for Cyramza (CYR-AMZA) to treat stomach cancer—a drug that can be purchased in Germany for just $54,000?
If Novo Nordisk can lower the price of Novolog by 75%, why is it still charging Americans with diabetes $12,000 for Ozempic when the exact same drug can be purchased for just $2,000 in Canada?
If Sanofi can reduce the price of Lantus by 78%, why is it still charging cancer patients in America over $200,000 for Caprelsa—a drug that can be purchased in Japan for just $37,000?
"Lowering the cost of insulin is only one part of what we must accomplish," said the senator. "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."
"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," he continued. "We have got to ask, how does it happen that nearly half of all new drugs cost over $150,000? How does it happen that cancer drugs which, in some cases, cost just a few dollars to manufacture are selling on the market for over $100,000?"
"Americans die, get sicker than they should, and go bankrupt because they cannot afford the outrageous cost of prescription drugs, while the drug companies and the PBMs make huge profits. That has got to change."
"I know that our guests from the drug companies will tell us how much it costs to develop a new drug and how often the research for new cures is not successful," said Sanders. "I get that. But what they are going to have to explain to us is why, over the past decade, 14 major pharmaceutical companies, including Eli Lilly, spent $747 billion on stock buybacks and dividends."
"They will also have to explain how as an entire industry pharma spent $8.5 billion on lobbying and over $745 million on campaign contributions over the past 25 years to get Congress to do its bidding," Sanders added. "Unbelievably, last year, drug companies hired over 1,700 lobbyists including the former congressional leaders of both major political parties—that's over three pharmaceutical industry lobbyists for every member of Congress."
In Sanders' words, "That could well explain why we pay the highest prices for prescription drugs in the world and why today drug companies can set the price of new drugs at any level they wish."
"While Americans pay outrageously high prices for prescription drugs, the pharmaceutical industry and the PBMs make enormous profits," he noted. "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 three major PBMs in America made $27.5 billion in profits—a 483% increase over the past decade. These PBMs manage 80% of all prescription drugs in America."
"In other words, Americans die, get sicker than they should, and go bankrupt because they cannot afford the outrageous cost of prescription drugs, while the drug companies and the PBMs make huge profits," Sanders lamented. "That has got to change and this committee is going to do everything possible to bring about that change."
Jorge, for her part, described the Inflation Reduction Act as a "milestone" law that "will help tens of millions of seniors."
"But it is just the start," said Jorge. "Congress should pass legislation to bring the prescription drug reforms that are saving Medicare patients and taxpayers billions to people of all ages, so that everyone can get lower drug prices on medicines they need—including insulin."
"Congress, not greedy corporations trying to redeem their tarnished reputations, should be leading the way on reforms that put patients ahead of pharmaceutical profits," she added.
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'Much More Needs to Be Done,' Says Sanders as Novo Nordisk Caves on Insulin Price
The senator introduced legislation last week to cap insulin prices at $20 per vial.
Mar 14, 2023
Crediting advocacy groups with pressuring two out of the three pharmaceutical companies that supply insulin to patients with diabetes in the United States to drastically lower their prices, Sen. Bernie Sanders on Tuesday called on the last of the trio, Sanofi, to do the same while arguing price caps should be mandatory—not a choice.
Novo Nordisk on Tuesday announced that it will cut prices by up to 75% for some of its insulin products starting next year, less than two weeks after one of its rival companies, Eli Lilly, said it plans to slash prices for its most widely used insulin products by 70%.
A vial of one of Novo's products, NovoLog, will drop from more than $289 to just over $72, and the insulin product FlexPen will cost $139, down from more than $500, starting January 1, 2024.
The price changes come after the price of insulin for patients has more than tripled in recent decades, with deadly consequences for some of the eight million Americans who rely on synthetic insulin to convert food into energy. A study based on the 2021 National Health Interview Survey last November found that 1.3 million people in the U.S. rationed their insulin supply in 2021 due to the drug's prohibitive cost.
Sanders (I-Vt.) noted that "grassroots pressure" forced Eli Lilly and Novo this month to announce major price cuts, but said that as chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee he "will soon hold a hearing on the need to guarantee insulin at an affordable price to everyone who needs it," suggesting that voluntary price cuts by companies are not sufficient.
Public pressure by groups including Patients for Affordable Drugs and Lower Drug Prices Now has resulted in some recent insulin price reforms, including a provision that took effect in January capping insulin copayments at $35 per month for Medicare recipients.
As Common Dreams reported last week, days after Eli Lilly announced its voluntary price cuts, Sanders, a longtime advocate of affordable insulin, joined Rep. Cori Bush (D-Mo.) in introducing legislation that would prohibit pharmaceutical companies from charging more than $20 for a vial of insulin. President Joe Biden has called for the product to be capped at $35 per vial for all patients—a proposal that Senate Republicans voted down last year.
Novo's announcement, said Biden, "builds on the important progress we made last year when I signed a law to cap insulin at $35 for seniors. I urge all other manufacturers to follow suit and Republicans in Congress to join us and cap insulin at $35 for all Americans."
Advocacy groups also called on Sanofi, the third insulin manufacturer for American patients, to follow its rival companies' lead and introduce price cuts.
"Let's keep fighting," said Lower Drug Prices Now, "so that patients can afford any medicine they need."
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Sanders, Bush Unveil Bill to Prohibit Pharma Companies From Charging More Than $20 for Insulin
"We can no longer tolerate a rigged healthcare system that forced 1.3 million people with diabetes to ration insulin while the three major insulin manufacturers made $21 billion dollars in profits."
Mar 09, 2023
Sen. Bernie Sanders and Rep. Cori Bush on Thursday introduced legislation that would prohibit pharmaceutical companies from charging more than $20 for a vial of insulin, a move that comes a week after Eli Lilly pledged to cap out-of-pocket payments for its insulin products at $35 per month.
"As a nurse, I've seen too many people in our communities struggle to afford their lifesaving insulin medication," Bush (D-Mo.) said in a statement. "People are left choosing between insulin or groceries; insulin or rent; insulin or child care. This is unacceptable."
More than 7 million people across the U.S. use insulin to manage their diabetes, and some have been forced to pay upwards of $1,000 per month for the medicine as pharmaceutical giants have jacked up prices with abandon in recent decades.
According to one study published in October, more than a million people in the U.S. have had to ration insulin due to the high cost.
Sanders (I-Vt.), the chair of the Senate Health, Education, Labor, and Pensions Committee and a longtime advocate of insulin price reform, said Thursday that "there is no reason why Americans should pay the highest prices in the world for insulin—in some cases, ten times as much as people in other countries."
"In 1923, the inventors of insulin sold their patents for $1 to save lives, not to turn pharmaceutical executives into billionaires," said Sanders. "Now, 100 years later, unacceptable corporate greed has caused the price of this lifesaving medication to skyrocket by over 1,000% since 1996. We can no longer tolerate a rigged healthcare system that forced 1.3 million people with diabetes to ration insulin while the three major insulin manufacturers made $21 billion dollars in profits."
"Now is the time for Congress to take on the greed and power of the pharmaceutical industry and substantially lower the price of insulin," the senator added. "In the richest country in the history of the world, no one should die because they cannot afford the medication they need."
If passed, the Insulin for All Act of 2023 would cap the list price of insulin nationwide at "$20 per 1000 units... which may be contained in one or more vials, pens, cartridges, or other forms of delivery."
Original co-sponsors of the legislation include Sen. Ed Markey of Massachusetts, Reps. Jamaal Bowman and Alexandria Ocasio-Cortez of New York, Rep. Rashida Tlaib of Michigan, and Sen. Jeff Merkley of Oregon.
" Big Pharma continues to rake in record profits by gouging patients on insulin prices," Merkley said in a statement. "Unaffordable high prices are forcing patients to ration their insulin, leading to dire health consequences—heart attacks, stroke, blindness, kidney failure, foot disease and amputations, even death. It's tragic, it's unacceptable, and it's time to end this rip-off."
The new bill is also backed by more than 70 advocacy organizations, including T1International, Public Citizen, and Social Security Works.
"This bill being called the Insulin for All Act of 2023 shows the power of grassroots activism," said Elizabeth Pfiester, a patient with Type 1 diabetes and the founder and executive director of T1International, the group behind the #insulin4all campaign.
"We know that Eli Lilly isn't lowering the list price of one of their insulins out of the goodness of their hearts," Pfiester added. "That's why policy change to ensure patients with diabetes can't be exploited anymore is essential."
Eli Lilly's decision earlier this month to slash the prices of its most-prescribed insulin products by 70% was cautiously welcomed by advocates who have been organizing against insulin price gouging for years.
But campaigners stressed that given the serious limitations of Eli Lilly's pledge—and the company's ability to raise prices again whenever it chooses—federal action is still necessary to ensure lower costs for everyone, including those who use products made by the other two giant insulin manufacturers, Sanofi and Novo Nordisk.
The three companies produce more than 90% of the global insulin supply, market dominance that has allowed them to drive up costs massively—drawing legal action from several U.S. states, including California.
Last April, Human Rights Watch released a report showing that Eli Lilly has raised the list price of Humalog by an inflation-adjusted 680% since it first began selling the product in the late 1990s. The company vowed earlier this month to slash the list price of Humalog by 70% starting in the fourth quarter of this year.
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'Time to End the Greed': Sanders Vows Bill to Cap Price of Insulin at $20 Per Vial
"As a result of unacceptable corporate greed, the price of insulin has gone up by over 1,000% since 1996," the Vermont senator said after Eli Lilly announced its price cut.
Mar 02, 2023
Sen. Bernie Sanders on Wednesday announced plans to introduce legislation that would cap U.S. insulin prices at $20 per vial after Eli Lilly pledged to cut the list prices of its most commonly used insulin products by 70%.
Sanders (I-Vt.), the chair of the Senate Health, Education, Labor, and Pensions Committee, said in a statement that "this is what fighting back accomplishes" and urged two other major insulin manufacturers to replicate Eli Lilly's move, which also includes capping monthly out-of-pocket insulin payments at $35 for many people with diabetes.
"At a time when Eli Lilly made over $7 billion in profits last year, public pressure forced them to reduce the price of insulin by 70%," said the Vermont senator. "Now is the time for Sanofi and Novo Nordisk to do the same. Now is the time to end the greed of the pharmaceutical industry and substantially lower the outrageous cost of prescription drugs in America."
In letters to the CEOs of Sanofi and Novo Nordisk—which together with Eli Lilly produce more than 90% of the global insulin supply—Sanders wrote that "people with diabetes should not be forced to pay $98 for a vial of insulin that costs just $8 to manufacture and can be purchased in Canada for just $12."
"I urge you to join Eli Lilly in substantially lowering the price your company charges for insulin and make certain that all Americans can purchase this lifesaving drug," added the senator, who has been scrutinizing the trio's business practices—including price collusion—for years.
"Let's be clear: Insulin is not a new drug," Sanders continued. "It was discovered 100 years ago by Canadian scientists who sold the patent rights of insulin for just $1 because they wanted to save lives, not make pharmaceutical executives extremely wealthy. And yet, as a result of unacceptable corporate greed, the price of insulin has gone up by over 1,000% since 1996, causing 1.3 million people with diabetes to ration insulin last year while your companies made billions of dollars in profits. That is absolutely unacceptable."
Eli Lilly's announcement was welcomed as a victory for people with diabetes who have been campaigning tirelessly for years to bring down insulin prices in the U.S., where some patients have been forced to pay more than $1,000 a month for the lifesaving medicine.
But the company's move also drew skepticism as advocates remain wary of the limitations of Wednesday's pledge and of Eli Lilly's commitment to keeping prices low, particularly given the pharmaceutical giant's history of lobbying against efforts to rein in prescription drug costs.
In a footnote at the bottom of its Wednesday press release, Eli Lilly states that "government restrictions exclude people enrolled in federal government insurance programs from Lilly's $35 solutions."
People on Medicare are covered by the Inflation Reduction Act's $35-per-month cap on insulin copayments, but low-income people on Medicaid don't appear to be eligible for Eli Lilly's price-cap program.
Additionally, Eli Lilly's 70% price cut for Humalog—the company's most commonly prescribed insulin product—won't take effect until the fourth quarter of this year, "giving Lilly seven more months of high prices even as they are lauded for their corporate responsibility," noted The American Prospect's Robert Kuttner.
"And since Lilly caps out-of-pocket costs to patients but not necessarily prices charged to insurance companies," Kuttner added, "the result could be cost-shifting and higher insurance premiums."
Such caveats led campaigners to emphasize the necessity of federal action to guarantee that insulin is available and affordable for all who need it.
"Insulin manufacturers have shown time and time again that they will put their CEOs' profits over patients' lives," said Kristen Whitney Daniels, the co-leader of T1International's federal working group and a person living with Type 1 diabetes. "That's why the government also needs to regulate insulin manufacturers to hold them accountable to ensuring the human right to insulin."
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