Wil Dubois

Got questions about life with diabetes? So do we! That's why we offer our weekly diabetes advice column, Ask D'Mine, hosted by our snarky diabetes expert Wil Dubois, a veteran type 1 and diabetes author from New Mexico.

This week, Wil answers a question posed about the grave issue of soaring insulin prices. He contemplates the topic of price controls and the consequences thereof.

{Got your own questions? Email us at [email protected]}

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Walter, type 1 from Massachusetts, writes: I’m in my 50th year as a type 1 diabetic and have studied the pricing trends for insulin since 1970. Insulin prices have skyrocketed over past 20 years. Medical insurance providers can’t afford to cover these costs, and patients can’t afford higher premiums. It appears increasing numbers of diabetics can no longer afford to pay for their insulin. It seems the only alternative is to force the makers of insulin to reduce their insulin prices. What’s your view about government price controls for insulin? 

 

[email protected] D’Mine answers: Wow. I mean wow. That’s an interesting question. One with some pretty wide-ranging ramifications. The first of which is you’ll be branded as a commie pinko.

Or a frickin’ hero in the likes of Samuel Adams.

So to be clear: What we are talking about here is interference in free trade. Interference with the bedrock principles of capitalism on which this country is built. And quite possibly interfering in the very Constitution itself.

You’re my kind of person! 

Gosh, where to start? OK, the idea of price controls is hardly new. Apparently the Roman Emperor Diocletian tried to cap the price of commodities in the winter of 301 Common Era. Now you’d think a Roman Emperor, of all people, could make a price cap stick, wouldn’t you? I mean, would you screw with a Roman Emperor? But Diocletian’s price controls dissolved into chaos within a year and were abandoned, as have most other government-sponsored price control schemes ever since.

Still, despite centuries of failure, we’re not without price controls in the United States. Minimum wage is a flavor of price control, and rent control in New York has existed for decades.

But when looking at past efforts on price controls, I don’t think we have a good model, for comparison purposes, to the insulin issue. Here in the USA, beyond the minimum wage laws and the rent controls, most of the historic tinkering with price controls has been in the energy sector. The two most famous—the fixing of gas prices in the 1970s and the capping of electricity costs in California in the early 2000s—were both disasters. 

During the Arab oil embargo back in ‘73 and ’74 the price of gas was fixed to ill result. Oil from existing sources was held at a lower rate, while newly discovered oil could be sold at a higher rate. The idea was to encourage more domestic exploration, but the effect was that the industry “sat” on their old oil to get better profits selling the more limited new oil, leading to shortages, long lines, and even violence. But, of course, these controls were created in the face of an overall supply shortage, and the goal was to avoid price gouging. The same can’t be said for insulin. Plenty is made. The market is actually growing, so under normal economic models that should make it cheaper to manufacture.

What about California? How did price caps create the specter of rolling blackouts in the early 2000's? Well, when the State capped the price of electricity, it was more profitable for power companies to sell electricity out-of-state, resulting in shortages in state. The lesson is that price caps often carry unintended consequences and for-profit businesses will do whatever it takes to hold and grow their bottom lines.

Another unintended consequence common to price controls is increased bureaucracy, as governments often have to layer on product standards (and enforcement of the same) to keep manufacturers from lowering quality as another way to improve profits on price controlled products.

So you can see why most economists have a dim view of price controls, especially as a check on inflation—which is often the justification for the control in the first place. Speaking of inflation, is the increasing price of insulin really out-pacing the rest of the economy?

Hugely.

Before the most recent batch of “newer” insulins, between the introduction of bio-engineered insulin and now (with little change to the insulins themselves), the cost has skyrocketed some 450%, much of that increase coming in just the last decade.

Does that qualify as price gouging? Well, I don’t know what the eff else to call it. Seems to me that because we can’t live without it, they can charge whatever they want. And they are right.

So would price controls really fix the problem?

You’re not alone in thinking so, as price controls on medicine are being considered by many states, and insulin was specifically targeted by legislation in the state of Nevada in 2017. That bill, which would have set price caps on insulin, was vetoed by Gov. Brian Sandoval, but he did sign a follow-up bill requiring big pharma to reveal pricing details and profits.

Naturally big pharma cried foul and claimed they are being forced to reveal trade secrets. And they sued in Federal court. Of interest to today’s conversation, the lobby groups PhRMA and BIO (who filed the suits) said in their brief that the law, “interferes with the federal patent and trade-secret laws, deprives manufacturers of their property interest in their trade secrets, and improperly overrides the regulatory choices of every other state.”

That tells me that the only way to get this done, if it can be done, will be at the Federal level. But that isn’t stopping the states. According to the online magazine FiercePharma, a flood of health and drug bills are working their way through state houses coast to coast. I’m not optimistic about the likelihood of success. But I do agree that whether it’s by state price controls, federal price controls, or Molotov Cocktails, something needs to be done. A nearly 100-year-old drug shouldn’t cost more than a patient’s mortgage payment.

Normally I’d vote for the Molotov Cocktail approach, but I can’t face the thought of insulin being thrown in the bay. 

But honestly? What do I think of price controls? Frankly, I don’t think price controls will work from any angle. The pharma foxes will outsmart it. I think the only way to fight pharma is with their own weapons. I’d like to see the Federal Government create a government-run pharmaceutical company. Granted, Amtrak and the Post Office haven’t worked out all that great, but faced with reasonably priced alternatives, pharma would have no choice but to compete, rather than to gouge.

 

This is not a medical advice column. We are PWDs freely and openly sharing the wisdom of our collected experiences — our been-there-done-that knowledge from the trenches. But we are not MDs, RNs, NPs, PAs, CDEs, or partridges in pear trees. Bottom line: we are only a small part of your total prescription. You still need the professional advice, treatment, and care of a licensed medical professional.
Disclaimer: Content created by the Diabetes Mine team. For more details click here.

Disclaimer

This content is created for Diabetes Mine, a consumer health blog focused on the diabetes community. The content is not medically reviewed and doesn't adhere to Healthline's editorial guidelines. For more information about Healthline's partnership with Diabetes Mine, please click here.