The disproportionate and rapid increase in insulin costs, also known as insulin inflation, is a well-known problem in the American medical community. The affordability of insulin is a source of great concern for patients with diabetes, their families, healthcare providers, insurers, and employers.
The price for insulin has nearly tripled between 2002 and 2013 (Cefalu et al., 2018) and has continued to rise at an increasing pace since then. The full scope of reasons for insulin inflation is unknown, yet the complex pricing strategy of medications in the United States is universally recognized as one of the several. The incentive to find a working solution cannot be overstated, as the growing number of patients has to choose between purchasing life-saving medication and other basic necessities.
To slow down the insulin inflation and potentially reduce existing costs the greater levels of transparency among the drug supply chain are essential. Currently, the insulin market is a system of many agents, with manufacturing companies, insurance providers, pharmacies, and hospitals engaging in multiple transactions before a patient can receive the drug. Hence the final price paid by the buyers includes the add-ons accumulated at the different stages of the distribution process. To simplify the distribution channels and provide the incentive for the existing companies to lower their prices, it is suggested that biosimilar manufacturers enter the market.
Relevant prices on insulin might be obtained by contacting the manufacturing companies and requesting the price quotas. Potential prices for biosimilar analogs can be estimated by adding the costs of excipients, formulation, transport, development, regulatory costs, and profit margin (Gotham, Barber & Hill, 2018).
The manufacturing processes for RHI analogs and insulin are similar, and therefore, no major technological advancement would be needed to introduce a substitute. As a new and largely generic competition to Insulin, RHI could substantially influence the current market equilibrium. If even a somewhat cheaper alternative became available, companies and pharmacies would have to increase the transparency in their pricing and re-evaluate the prices in general.
To consider a different perspective, there is a chance that this solution would not make enough difference to compensate for the effects the insulin inflation has on lower-income patients. In this case, it might be necessary to introduce higher levels of government control into the drugs market to develop legal barriers to inflation.
As insulin is a life-saving drug, the demand for it is naturally inelastic, with patients being willing to pay predatory prices to receive their medication (Schneider et al., 2018). Whether through the introduction of cheaper substitutes, the legal regulation of the marker or the combination of both, patients should be protected from exploitation.
Interns of fairness, ethics, and morality, it is unacceptable that one has to pick whether to buy food, any other basic necessity, or life-saving medication. The current state of insulin distribution, in particular, allows stakeholders to prey upon vulnerable groups, knowing that those who can pay as high a price as is requested.
The introduction of the RHI alternative into mass production not only has the potential to save the lives of lots of struggling vulnerable people but will benefit the pharmaceutical industry overall. Competition is the key to a healthy market environment as its existence indirectly forces companies to act in a client-oriented manner and thus provokes customers from exploitation.
References
Cefalu et al. (2018). Insulin access and affordability working group: conclusions and recommendations. Diabetes Care, 41(6), pp. 1299-1311. Web.
Gotham, D., Barber, M. & Hill, A. (2018). Production costs and potential prices for biosimilars of human insulin and insulin analogues. BMJ Global Health, 3, pp. 1-3. Web.
Schneider, J., Parikh, A., & Stojanovic, I. (2018). Impact of a novel insulin management service on non-insulin pharmaceutical expenses. Journal of Health Economics and Outcomes Research, 6(1), pp. 53-62. Web.