What’s behind the insulin shortage in the US? | Business and Economy

Skye Murphy, 22, has lived with type 1 diabetes since she was 14. Last month, she learned that her receipt of her own medication, the insulin drug Humalog, would be delayed by 30 to 60 days. Written by Eli Lilly.

While announcing the shortage in March, Eli Lilly said several key insulin drugs would be out of stock for several weeks, which CNN reported was due to “short delays in manufacturing.” ” The company has since removed details about the shortage from its news release.

More than 38.4 million people in the United States have diabetes and rely on insulin to survive. This makes it more populous than the population of Tokyo, which is one of the most populous cities in the world.

Indianapolis-based Eli Lilly is one of three pharmaceutical companies that dominate the global insulin market. France’s Sanofi and Denmark’s Novo compete with Nordisk. But Novo Nordisk and Eli Lilly are particularly noteworthy. The two companies control 75% of the global market and both have insulin shortages, impacting people who rely on the drug.

That includes Murphy. She has used up her last vial and has to adjust her dose in case she can’t find a refill. She has spent almost a day calling pharmacies throughout the Chicago metropolitan area trying to find her dose, but she still hasn’t found one.

“I have been taking one type of insulin for eight years now. If I don’t take the medicine, I can experience hypoglycemia, hypoglycemia, hyperglycemia, or other serious side effects,” Murphy told NDMT. Told.

She said her insurance company recommended that she use generic drugs during that time, but she was worried because it took her years to find the right combination of drugs that worked for her.

Generic drugs are not foolproof. The U.S. Food and Drug Administration (FDA) allows up to 20 percent variation in active ingredients from the original formulation. Murphy is wary of such risks.

Price caps, reduced offerings

Novo Nordisk has 54.8% of the global market, and one of its recent moves, cutting back on products, is only adding to even greater shortages.

In November, the Danish pharmaceutical giant announced that it would phase out Levemir, a long-acting insulin injection. The drug is expected to be completely withdrawn by the end of 2024. At the time, the company said the move would cause shortages in its supply chain starting this year.

Levemir is currently on the drug shortage list.

Novo Nordisk holds 54.8% of the global market for insulin [File: Jacob Gronholt-Pedersen/Reuters]

But if the company controls so much of the global insulin market, why would it slowly and quietly wean off its products?

The White House has been touting a plan for the past year to cap insulin costs for consumers at $35. US President Joe Biden introduced the initiative in his recent State of the Union address. Thanks to cooperation with several major pharmaceutical companies such as Eli Lilly, Sanofi, Novo and Nordisk, prices have fallen.

Prices fell 70% at Eli Lilly, 75% at Novo Nordisk and 78% at Sanofi.

But even with price caps in place, a new study from Yale University published in the Journal of the American Medical Association (JAMA) shows that big pharmaceutical companies are still charging significantly more than the cost to manufacture their drugs. Indicated.

The study found that insulin pens (consumer-friendly self-administration devices that contain preset doses and typically hold about 3 ml of medication) can cost between $50 and $111 per year. I understand.

This has been an issue across the pharmaceutical industry even before the Biden administration’s move to cap insulin prices. For example, Eli Lilly charged as much as $274.70 for one vial of Humalog U-100 10mL, one of his most popular pharmaceutical products.

Novo Nordisk has been quietly reducing its insulin drug portfolio despite vocal support for the Biden administration’s price cap plan.

According to Novo Nordisk’s 2023 annual report, insulin sales fell by 6%.

advantageous alternative

Novo Nordisk is now focused on another class of drugs called GLP-1 receptors, which regulate gut hormones that affect hunger. These markets are more lucrative. The GLP-1 receptor also targets diabetes, but is now more widely used as a weight loss drug – semaglutide, more commonly known as Wegovy or Ozempic.

Other drug companies are also looking to profit from Novo Nordisk’s GLP-1 receptor, including Eli Lilly, which is ramping up production of Novo’s GLP-1 competitors Zepbound and Munjaro. Despite this, there is a lack of insulin.

Eli Lilly on Tuesday revised its annual revenue forecast upward by $2 billion, saying it now expects revenue of $42.4 billion to $43.6 billion by the end of the year. This is due to the growing demand for Ozempic and Wegovy alternatives. Reuters reports that doctors have prescribed Zepbound a total of 63,000 times each week so far this year.

Despite Eli Lilly’s gains, Novo Nordisk still maintains a strong market position. The report notes that doctors write an average of 110,000 total Hegovy prescriptions each week.

“Companies still have an incentive to set prices that the market will bear.” [for these weight-loss drugs]On the other hand, in a highly competitive and saturated market like insulin, profit margins can be much smaller,” Krutika Amin, associate director of the Affordable Care Act Program at the Kaiser Family Foundation, told NDMT. told.

But while Novo Nordisk and Eli Lilly are fighting on a corporate level, Americans like Murphy are still being targeted.

In the case of GLP-1 receptors, market tensions are only increasing despite Novo Nordisk’s efforts to scale up drug production.

Wegovy in particular has been in the spotlight in recent weeks. That’s because Medicare, the government’s health insurance program for people 65 and older, covers the hit weight-loss drug, potentially making it available to seniors as well.

The drugs Wigovy and Ozempic have skyrocketed in popularity in recent years after their active ingredient semaglutide was found to cause significant weight loss.

So far, semaglutide has been available for cash unless the patient already has diabetes. A one-month supply of Ozempic injection can cost $936, compared to $1,349 for Wegobee, according to an analysis by the Kaiser Family Foundation.

Wegovy has surged in popularity in recent years as its active ingredient semaglutide has been shown to cause significant weight loss. [File: Victoria Klesty/Illustration/Reuters]

Short supply, ‘exorbitant’ prices

The situation is only going to get worse, as some semaglutide injections have been in severe shortage since March 2022. Part of that is due to a 300 percent surge in demand between 2020 and 2022. The situation worsened when Novo Nordisk announced it was suspending its contract with the manufacturer that filled Wegovy syringes after the manufacturer failed an inspection by the FDA in December 2021.

Due to the surge in demand, Novo Nordisk is still unable to keep up. This is on top of other supply chain strains hitting the pharmaceutical industry, from Adderall to Tylenol. India and China supply 61% of the active ingredients used in medicines. COVID-19 has exacerbated supply chain shortages, while large-scale geopolitical and humanitarian crises, particularly the Russia-Ukraine conflict and the recent Israel-Hamas war in Gaza, have disrupted trade. Despite the slowdown, the situation continues.

In recent weeks, Novo Nordisk has come under intense scrutiny over the high prices of its weight loss drugs. A Yale University study that pointed to rising insulin costs also pointed to similar problems with a large Danish pharmaceutical company’s semaglutide treatment. The study concluded that the drug’s manufacturing cost was estimated to be between $0.89 and $4.73.

In response to the study, U.S. Sen. Bernie Sanders of Vermont criticized Novo Nordisk, the pharmaceutical giant that developed the drug, calling it “outrageous.”

Sanders’ comments come as the FDA expands its approval of Wegovy. The drug reduces the risk of cardiovascular events such as heart attack and stroke by 20 percent in overweight patients with a history of cardiovascular disease, according to a recent study published in the New England Journal of Medicine. It has also been shown that

Expanding Medicare coverage will make this drug available to more people, but some people who rely on it, such as those with increased A1C or insulin resistance, may not have access to it. There are still many people who cannot.

Medicare still covers this drug not only for weight loss purposes, but rather for some of the health effects associated with obesity. In July 2023, a bipartisan group of U.S. senators proposed a bill to change this, but it has since stalled in committee.

Medicare’s new coverage option expands the market for Novo Nordisk and its blockbuster weight-loss drug.

“The supply is not increasing. That would basically exacerbate the shortage or worsen the gap between demand and supply. It could be the result of all of these things,” said the New York State School of Public Health. Bruce Y. Lee, a professor of health policy and management, told NDMT.

Medicare coverage would essentially reduce costs and expand access for thousands of diabetics who need the drug. But supply is already tight and demand is high, so this move will only exacerbate the ongoing shortage. Additionally, access for both diabetics and non-diabetics will be similarly restricted.

“Pharmaceutical companies will set up production lines that they want to support demand for the next two years, and then they will set up production lines. Now, when demand is much greater than supply, often The response is that the company will simply raise the price…because the profit margin per unit will be higher. But that doesn’t solve the problem,” Lee added.

In addition to continuing shortages, private insurance rarely covers the drug unless the patient has diabetes. Although there is a strong correlation between obesity and diabetes, there is a strong correlation between obesity and diabetes, as in the case of hyperthyroidism and certain drugs such as selective serotonin reuptake inhibitors (SSRIs). It’s not a health condition. A drug used to treat anxiety and depression.

the heaviest burden

Access is an issue for everyone, but the heaviest burden falls on communities of color. These costs disproportionately impact socio-economically disadvantaged populations, primarily non-white communities. Obesity rates are highest among black communities. According to the National Institutes of Health, nearly 57 percent of black women in particular are overweight.

Overweight woman sitting on a chair in Times Square, New York, USA
There is a strong correlation between obesity and diabetes [File: Lucas Jackson/Reuters]

Regarding the impact on people with diabetes, the prevalence among American Indian/Alaska Natives (AIAN) over the age of 18 is nearly twice that of white Americans. Although diabetes among AIAN people is on the decline, 25 percent of them live below the poverty line, compared to 8.6 percent in white communities.

Even though Wegovy is covered by private insurance for people with diabetes, more than 19 percent of the AIAN population is uninsured as of 2022, the highest of any U.S. demographic.

Despite consistent challenges in the supply chain, Novo Nordisk’s financial health continues to grow stronger.

Last year, Novo Nordisk became Europe’s most valuable company, beating LVMH, the parent company of high-end luxury brands such as clothing brand Louis Vuitton and champagne maker Dom Perignon. In March, it became the 12th most valuable brand in the world.

The Danish pharmaceutical giant’s market capitalization currently exceeds $440 billion. The company’s CEOs went home 13% more in 2023 than the previous year.

The market for weight loss drugs such as Ozempic and Wegovy is set to expand further in the future. JPMorgan Healthcare predicts that the weight loss drug market could reach a staggering value of $100 billion by the end of this decade.

Novo Nordisk is taking on this challenge. The company also recently made a $16.5 billion investment to purchase three manufacturing facilities.

Neither Novo Nordisk nor Eli Lilly responded to NDMT’s requests for comment.

Long-term investments may help patients in the long run, but they won’t help people like Murphy who need the drugs now.

“People sometimes rely on medication to get through the day,” Murphy says. “I shouldn’t be in a position where I have to ration medicine, but that’s the reality I’m living in right now.”

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