Abstract
Purpose of Review
The purposes of this study were to describe how medication prices are established, to explain why antihyperglycemic medications have become so expensive, to show trends in expenditures for antihyperglycemic medications, and to highlight strategies to control expenditures in the USA.
Recent Findings
In the U.S., pharmaceutical manufacturers set the prices for new products. Between 2002 and 2012, expenditures for antihyperglycemic medications increased from $10 billion to $22 billion. This increase was primarily driven by expenditures for insulin which increased sixfold. The increase in insulin expenditures may be attributed to several factors: the shift from inexpensive beef and pork insulins to more expensive genetically engineered human insulins and insulin analogs, dramatic price increases for the available insulins, physician prescribing practices, policies that limit payers’ abilities to negotiate prices, and nontransparent negotiation of rebates and discounts.
Summary
The costs of antihyperglycemic medications, especially insulin, have become a barrier to diabetes treatment. While clinical interventions to shift physician prescribing practices towards lower cost drugs may provide some relief, we will ultimately need policy interventions such as more stringent requirements for patent exclusivity, greater transparency in medication pricing, greater opportunities for price negotiation, and outcomes-based pricing models to control the costs of antihyperglycemic medications.
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Laura N. McEwen, Sarah Stark Casagrande, and Shihchen Kuo declare that they have no conflicts of interest.
William H. Herman is a consultant for Johnson & Johnson and a member of Data Monitoring Committees for Merck Sharp & Dohme and Lexicon Pharmaceuticals.
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This article does not contain any studies with human or animal subjects performed by any of the authors.
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This article is part of the Topical Collection on Economics and Policy in Diabetes
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McEwen, L.N., Casagrande, S.S., Kuo, S. et al. Why Are Diabetes Medications So Expensive and What Can Be Done to Control Their Cost?. Curr Diab Rep 17, 71 (2017). https://doi.org/10.1007/s11892-017-0893-0
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DOI: https://doi.org/10.1007/s11892-017-0893-0