Naughty and Nice

Let’s state from the outset that since we are tribe members, we may not understand all the traditions associated with Christmas. However, over the years we have learned a few things and have come to appreciate these traditions. One of our favorites is Santa making his list checking it twice deciding who’s been naughty and who’s been nice. It’s our understanding that based on Santa’s judgement being nice results in a something good in the Christmas stocking while being naughty and it’s a lump of coal.

Well this year it goes without saying that Lilly, Novo Nordisk and Sanofi have fallen out of favor with Santa and will be receiving a huge lump of coal in their Christmas stockings. Already under siege for the “high” cost of insulin now comes Massachusetts Senator Elizabeth Warren who believes that the government should be in the insulin business. Senator Warren is introducing a bill that would basically create a government run pharmaceutical manufacturer.

According to a post on the Politico web site;

“Insulin is a perfect test case for why an Office of Drug Manufacturing ought to exist, Warren’s team said. The drug is nearly a century old, yet the prices have skyrocketed in recent years. The cost tripled between 2002 and 2013, which is why Warren’s bill requires insulin to be one of the drugs manufactured by the federal government.”

This comes after FDA Commissioner Scott Gottlieb basically ripped all the insulin companies a new one making it clear the FDA will make it easier for someone to come out with a generic insulin. As we noted when Commissioner Gottlieb made his comments which were hailed by almost everyone but the insulin companies painting big pharma as the bad guy is like saying Santa is jolly. And not digress here but with all this PCNESS isn’t about time we ask Santa to go on a diet, while Santa does not disclose his A1C the guy looks to be slightly overweight.

Now we hate to bring reality and facts into the picture but what the heck everyone thinks we’re a shill for industry anyway, which just shows they haven’t been reading Diabetic Investor very long, but hey why do any due diligence when you can make up stuff out of thin air. As we have noted in the past making insulin isn’t simple which is one reason, we have just three major insulin companies. This is not like making a peanut butter and jelly sandwich.

Second let’s say by some miracle Senator Warren gets her wish just how would this work. Do we really want the government making a life sustaining drug like insulin? Again, we hate to bring in those pesky facts, but our government doesn’t exactly have a great track record when it comes to running any business. The Affordable Care Act is the most recent example of this. A program which is now in peril yet was replete with issues. What about Amtrak or the U S Post Office?

Third we can only imagine how Senator Warren would define affordable. No one seems to look at this, but the definition of affordability is like abstract art, beauty is the eye of the beholder. Based on other government programs more than likely there will be a complex maze of regulations, calculations and rules which determine what affordable is and is not.

Fourth, we hate to point out the obvious, but we already have one generic long-acting insulin here already and another on the way. And we also have a generic short-acting which unfortunately is in the hands of a company whose main talent is screwing up a simple peanut butter and jelly sandwich. We’ve said before and will say it again if Sanofi knew what they were doing the short-acting segment of the market would be experiencing the same pricing pressure as the long-acting market.

Fifth and this too doesn’t get asked for we think no one would like the answer but exactly what problem are we solving here. If the government makes it cheaper does that mean patients will pay a lower out of pocket cost? What about all those patients who are in high deductible insurance plans? What about patients with no insurance? What about the rebates and discounts that insulin companies pay to payors and PBMs, would the government force these companies to pass along these discounts to patients?

Sixth and again no one wants to talk about this either is this about money or outcomes? Yes, we have all seen the heartbreaking stories about a patient who has died because they could not afford their insulin. We have seen stories about patients rationing insulin because it costs so much. Yet no one has bothered to quantify just how big a problem this is or even if it is a problem. Private studies, NOT done by industry, indicate this issue impacts a very small segment of the patient population therefore let’s use a nuclear weapon to kill a house fly.

But let’s get back to the money versus outcomes question. Our connection has always been insulin could be given away for FREE, but this does not mean it would be used more effectively. There isn’t one piece of hard evidence that proves the cost of insulin creates adverse events or poor outcomes. It’s ok with us if this is all about money, we get that but please let’s not get disingenuous and claim that a lower cost of insulin will somehow improve outcomes there just isn’t any evidence to back this up.

What most people don’t want to admit here is this is really a money issued clouded by emotions. The sad stories of a patient dying because they could not afford their insulin have gone viral. More stories have come out about insulin rationing. Someone is surly to blame for this horrendous situation, someone has to be held accountable and let’s be honest the insulin companies are easy targets. Never mind the role of high deductible plans or rebates/discounts etc. Let’s string up the insulin companies and get out the tar and feathers.

To put this is terms everyone can understand think of a couple getting a divorce who either has no children or grown children. Take away the emotion and this is basically a simple division of assets. Yet when emotions are thrown in what should be a simple math problem turns into a train wreck. As Momma Kliff used to say emotions are like storm clouds coming in they take away the clarity of sunshine.

We do believe there is a problem here, just how big of a problem we aren’t sure. No patient should ever have to choose between eating and insulin. Losing one life from the cost of insulin is one life too many lost. However, we don’t believe the government should be anywhere near the insulin business.

There are other simpler quicker solutions available. A good start would be requiring transparency, require disclosure of rebates/discounts etc. bring some light into the darkness. Another would be expanded access to patient assistance programs which all of the insulin companies already offer. Most of all fix the Affordable Care Act or come up with something which does not force companies to offer high deductible plans.

No disrespect to Senator Warren, who many believe will run for President in 2020, but this idea of the government making insulin is nothing more than a way to grab attention. Being the seasoned and experienced politician she is Senator Warren knows a hot button emotional issue when she sees it. Like Commissioner Gottlieb she knows there is no downside to taking on big bad pharma and lots of upside- like primary votes. And to be honest we don’t have a problem with what she is doing as we understand how the game of politics is played.

We do however have a big problem using a tactical nuclear weapon to kill a simple housefly.

And in the interest of the season feel free to share this post. Happy Holidays everyone.