A Republican’s plan to tame high insulin prices? Government competition

cross the city – During the election campaign, candidates for public elections hear a common refrain from voters that the rising cost of prescription drugs is one of their main concerns.

But state lawmakers have few tools to control drug pricing because those powers typically rest with Congress, where efforts to get Medicare to negotiate drug prices never seem to succeed in the face of fierce opposition. of the powerful pharmaceutical industry.

A prominent Republican state legislator from West Michigan wants to change that.

Sen. Curt VanderWall, R-Ludington, says the only way to lower the price of insulin for diabetics is for the state itself to start manufacturing life-saving drugs.

It’s a bold idea coming from a Conservative politician whose party generally eschews government intervention in the private sector.

VanderWall, who chairs the Senate Health and Human Services Policy Committee, wants the state government to compete with Novo Nordisk, Sanofi and Big Pharma’s Eli Lilly in manufacturing and distributing insulin products to approximately 1.4 million Michiganians who use the treatment daily to control their blood sugar levels.

“Hopefully we can deliver a product for pennies on the dollar compared to what people are spending right now,” VanderWall said Thursday at a health insurance executives conference in Traverse City.

VanderWall argues that if the state controlled the manufacture of insulin, the government would not be as driven by the marketing costs and profit margins that drive ever-rising drug prices as individuals, insurance companies and taxpayers pay big pharma.

In recent months, VanderWall has stopped calling meetings with medical professionals, Michigan State University biochemistry experts, and others interested in the topic to explore how the state might set up its own insulin manufacturing operation approved by the Food and Drug Administration. .

MSU has a former Pfizer facility in Holland that is used for biotechnology research that could eventually be used for insulin production, although the East Lansing school has no plans to go into manufacturing drugs, according to the university’s main lobbyist.

“MSU will not produce insulin – we don’t,” said Kathy Wilbur, senior vice president of government relations at MSU. “But there might be room if (VanderWall) could come up with some sort of partnership with another company.”

This would require a significant investment in equipment and obtaining FDA-approved insulins.

VanderWall estimates the state should invest $50 million to $100 million in a state-run facility to manufacture insulin — and there’s plenty of money to invest in the initiative with the state sitting on a budget surplus of $7 billion.

“That’s the other reason why it’s imperative that we move now,” VanderWall told the Detroit News.

A similar effort is underway in California, where lawmakers have earmarked $100 million for an initiative to have insulin produced by the state.

The project is still in its infancy, but VanderWall’s vision is gaining early support from lawmakers on both sides of the aisle in Lansing after years of what one lawmaker described as “trimming around the edges” of trying to curb expensive prescription drugs for average citizens. .

Senate Majority Leader Mike Shirkey, R-Clarklake, backs VanderWall’s concept, saying it could lead to new competition in the prescription drug market for “not just insulin, but d ‘other’ drugs.

There are still plenty of pros and cons to weigh up, Shirkey said, like how the state would ask a pharmaceutical company to be its contract manufacturer and distributor of insulin.

“Because I don’t think the government is good at commercial production of anything,” said Shirkey, owner of a tool and die store in Jackson.

VanderWall’s vision is not a new concept. A generation ago, the state was still manufacturing vaccines that were distributed to local health departments across the state before this company was privatized.

The average cost of insulin in the United States is six times what Canadians pay and nine times what diabetics pay in Britain, ranging from $375 a month to $1,000 a month, according to a study carried out in 2020 by RAND Corp.

According to the RAND study, annual insulin out-of-pocket costs doubled between 2012 and 2016 for people with diabetes with employer-provided insurance.

VanderWall, R-Ludington, wants the state to contract with a biotech company to manufacture generic insulin not just for diabetics within the state workforce and Medicaid rolls, but also for the general population.

Of the 1.4 million Michiganians who depend on insulin to control their blood sugar every day, VanderWall said, about 450,000 of them obtain their insurance through taxpayers, either as employees of the either as Medicaid recipients. About 1 in 5 Michigan residents have health insurance coverage through Medicaid.

Through his research, VanderWall said, the average cost of insulin for someone not on taxpayer-funded Medicaid lists is $725 per month or $8,700 per year.

“If we can take that out and bring it back to the state and start manufacturing it ourselves, we can deliver it to all insulin users for about $30 a month,” VanderWall said.

VanderWall’s proposal is a response to legislation the GOP-led House passed last year that would cap a diabetic’s monthly insulin cost at $50.

Both VanderWall and Shirkey oppose the measure, arguing that it only shifts costs to insurers who then pass them on to customers.

“At the end of the day, it’s going to be on whoever gets the insurance or the state has to pay for it in the back,” VanderWall said. “…Whatever we do, we cannot force the hands of health (insurers) to pay the ultimate cost – it’s not a business and it’s not how you do things.”

What’s unknown is how many diabetics don’t use insulin properly on a daily basis because they simply can’t afford it, leading to diabetes-associated health issues that only bloat the cost of health care for everyone.

VanderWall and Shirkey spoke about the concept of state-made insulin to a panel of six lawmakers last week at the Michigan Association of Health Plan’s annual conference at Grand Traverse Station.

MAHP, the industry trade group for every health insurer that serves Medicaid beneficiaries except Michigan’s Blue Cross Blue Shield, has expressed interest in VanderWall’s initiative. Indeed, if this were to materialize, it could reduce the industry’s financial exposure to prescription drugs that eat away at insurers’ profits.

Sen. Curtis Hertel, D-East Lansing, said state lawmakers have been limited to pass new laws to bring more transparency drug pricing and control the practices of pharmaceutical benefit managers which refer individuals to certain medicines and pharmacies of the national chain.

He prefers to try anything that can lower the cost of insulin and other drugs.

“If we don’t keep snacking, it’s going to keep going further and further, faster and faster,” Hertel said.

For VanderWall, he welcomes questions about why the government should intervene in the insulin business.

“It’s just a way for us to go and say, ‘OK, here we go, we’re going to save our people money,'” he said. “It would be state-of-the-art and it would literally, I think, be a paradigm shift in the future of medicine and what we can do to improve outcomes for consumers.”


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