Insulin Prices Fall, Democrats Respond With Denial

For years, the left's campaign to dictate the price of prescription drugs has focused on one medicine above all others — insulin.

The hormone was discovered more than a century ago by Canadian doctor Frederick Banting and his medical student Charles Best. They famously sold their patent to the University of Toronto for $1 apiece. How can insulin still be a financial burden for some of the people with diabetes who need it?

This problem motivated the $35 insulin price cap for Medicare enrollees, which was put in place by the 2022 Inflation Reduction Act. It's why, back in 2019, Sen. Bernie Sanders, I-Vt., took a caravan of people with him to Canada to purchase price-controlled insulin north of the border.

And it's the reason California Gov. Gavin Newsom remains intent on establishing a state-run insulin manufacturing operation called CalRx in partnership with generic manufacturer Civica Rx. A plant is being built in Virginia, and another is planned for California.

He had promised that the medication would be available to Golden Staters later this year at no more than $30 a vial. But it's unlikely that he'll meet that timeline.

And yet, a funny thing has happened on the long march to insulin price controls. The market corrected itself. Insulin prices have fallen on their own. And Democrats appear unaware.

The latest sustainability report from the pharmaceutical giant Eli Lilly reveals that the list price for its popular Humalog insulin has plummeted in recent years from $275 a vial in 2018 to just $66 in 2023.

The net price — that is, what people pay after rebates and discounts — is down to $26 a vial. The company's biosimilar insulin, known as Lispro, is even more affordable, with a net price of $17. The report also notes that the average monthly out-of-pocket cost for Lilly-manufactured insulin has dropped from $38.64 to $17.16 over the last six years.

Recognizing that this market development would neutralize one of their signature issues this campaign season, Democrats have chosen not to notice. Even now, President Joe Biden seems to mention insulin prices on a near-daily basis as he makes his case for reelection.

Speaking at a campaign event in Reno, Nevada, this past March, for instance, he asked the audience, "How many of you know someone who needs ... insulin? OK well, guess what? It was costing four — 400 bucks a month on average. It now costs $35 a month."

During his remarks to the National Governors Association that same month, he went even further, saying, "We capped insulin for seniors on Medicare at $35 a month instead of as much as $400 a month. Well, let’s make that $35 available to everyone in your states — everyone."

It's empty rhetoric. As the Lilly report indicates, the private sector has already made insulin available for less than that figure.

Democrats have gotten good press for their $35 a month insulin price cap. But it's not clear whether it was ever necessary.

According to a report from the U.S. Department of Health and Human Services, Medicare enrollees weren't paying $400 a month for insulin before Biden arrived on the scene. They were paying about $450 a year — $2.50 a month more than the new cap. And this was back in 2019, before the recent drop in net prices.

Even if out-of-pocket insulin costs were much higher than they are now, price controls wouldn't be the answer.

Drug companies have very little say over what Americans actually pay at the pharmacy counter. It's insurers and the middlemen organizations known as pharmacy benefit managers who have the most control over patients' cost-sharing obligations.

If lawmakers want to crack down on dishonest and exploitative prescription drug pricing practices, they could start by reining in PBMs.

In the meantime, imposing another round of price controls — or spending taxpayer dollars to get into the drug manufacturing business, as Gov. Newsom would like to do — isn't just a solution in search of a problem. It's a problem all its own.

In the end, such draconian interventions will only distort a domestic market for insulin that, at least right now, appears to be working just fine.