Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Insulin costs on the rise -

View in ParlViewView other Segments

Norman Swan: As you well know, there's both an epidemic of obesity and what's called type II diabetes around the world, including Australia, type II diabetes being the failure of insulin to control your blood sugar. It can be treated with lifestyle, then medications, then going on to insulin itself, which is something that is not relished by patients and their GPs. But a study led by the University of Melbourne into what's happening with insulin prescribing in the United States may have relevance here in Australia. A lot of the authors is Philip Clarke who is professor of health economics at Melbourne University's School of Population and Global Health, welcome to the Health Report again Philip.

Philip Clarke: Good evening Norman.

Norman Swan: So just tell us about this study you did in the United States. We should really set the scene here. We're talking about what are called insulin analogues, which are further genetically engineered forms of insulin beyond the genetically engineered forms that are already on the market.

Philip Clarke: Yes, the study we've done really just tries to track the expenditure on all types of diabetes drugs, using data from the United States. There is some comparable data in Australia and we've done little bit of work down that track, but focusing on the United States first, what we show is there's been a dramatic increase both in the use of insulin, mainly in people with type II diabetes, so there's always with type I diabetes which is early onset diabetes these people have been insulin dependent, and for the best part of the 20th century they have been kept alive through the use of insulin. What has happened in the last 20 years is there's use of insulin and now use of these analogue insulins in people with type II diabetes to control blood sugars. Why do people use analogues? There are effectively…

Norman Swan: So again, people will still be confused, I should really just to do a little bit of history here, so insulin was discovered in the 1920s, it was found that it could save the lives of people with type I diabetes, which is the type you get when you are a kid and you are insulin-dependent. The first forms of insulin came from animals, which had all sorts of problems with antibodies and control, and then the next form which was genetically engineering bacteria to produce human forms of insulin. And now these analogues take that human insulin and further manipulate them genetically to get what they say is better performance.

Philip Clarke: Yes, and you can either get what's called rapid acting insulins and these are the insulins people take before having a meal, or you can get long acting insulins, and again, that gives you a perhaps smoother profile. There's potentially benefits with not having low blood sugars which people call hypos. Perhaps what hasn't really been done is any long-term study to see how that translates clinically into benefits over and above the existing human insulins or the earlier generation of insulins.

Norman Swan: And there was a World Health Organisation report which said that really it's questionable just how much difference there is between these analogues and the older human insulins, and a Cochrane review which looks at the evidence, albeit a bit out of date now, suggests that there is not much difference either.

Philip Clarke: Yes, exactly, but where there is a difference is a difference in price. And in both countries and over time what has tended to happen, particularly in the United States, has been a great increase, even of the prices that people were paying, which are sometimes two or three times the price for an analogue insulin, the price of a comparable human insulin. And over time the prices of the analogue insulins, particularly in the United States, have gone up.

Norman Swan: So just give us a sense of what the dimensions are of that.

Philip Clarke: In terms of per person with diabetes, the study we did, what we did was we looked at the overall expenditure, average expenditure in 2002 per person with diabetes it was around $231 a year on insulin in the United States I might stress, that's now around $700 with about two-thirds of that due to the expenditure on these analogue insulins. And the main factor driving that is a tripling effectively in the price per ml people are paying for insulin, which is due largely to this switch and also an increase in the price of these analogues.

Norman Swan: During this time there's been a boom in medication, so anybody listening to us with type II diabetes, most of the people listening to us with type II, if they have it, are on medication. Some of them are very cheap, like a drug called Metformin, and very effective, and then there has always been fancy new ones come on the market and some controversial, some not. What has happened to medications while this has been going on?

Philip Clarke: In the United States there has been increases in prices, not to the same degree of insulin. Insulin is outstripped and now if you look at the total expenditure on insulin, it now outstrips in the United States all other diabetes medications combined, which it certainly didn't 10 years ago.

Norman Swan: So you worry is cost versus the benefit.

Philip Clarke: Exactly. I think clearly here's an example of where the technologies have rapidly changed, it has been rapidly adopted clinically, and perhaps there needs to be a time where the evidence needs to catch up and people need to now make decisions where they take into account costs and benefits. And I must stress, this is much more a lecture towards people in the United States than in Australia because we are actually doing that here through forums like the Pharmaceutical Benefits Advisory…

Norman Swan: So what is the situation in Australia?

Philip Clarke: The situation in Australia is slightly different. We've clearly increased or widely used analogue insulin and there clearly has been substitution between human insulins, the older insulins, and these analogues. But what hasn't happened is the price hasn't increased. Having said that…

Norman Swan: There's still a differential though, it's about double the price.

Philip Clarke: Yes, absolutely, so the price of analogues definitely are potentially two and three times the price of the human insulins here, but they haven't increased over time like in the United States. Basically once the price is listed on the Pharmaceutical Benefits Scheme, that's the price that is effectively set and it doesn't normally increase over time.

Norman Swan: But what you're saying is there's still the potential for…if you believe there's not that much differential in benefit, there is a potential for overprescribing of those forms of insulin.

Philip Clarke: Yes, potentially. And also, interestingly, if you take one of the analogues, insulin glargine, which is one of the long acting insulins, we pay about $400 for a normal typical prescribed dose, $400 per month. And in New Zealand they are comparable, exactly the same insulin, the New Zealand PHARMAC is obtaining the drug for $90 or less. In fact in both countries what I would stress and including in the United States, one of the difficulties is often the published price may not be the price governments are actually paying because you also get what's called rebates to payers which makes it I suppose very murky, but unless people publish this data we can't take it into account in our analyses.

Norman Swan: So what you're saying is that our Pharmaceutical Benefits Advisory Committee might actually be getting us a good deal but we wouldn't know it because they are paying the $400 or whatever it is so that the company can say that they are getting the list price but in fact the company is giving a backhander, but instead of to an individual it's coming to the government.

Philip Clarke: Yes, and that's happening in all countries. It's problematic. I can understand why individual governments make these arrangements with pharmaceutical companies. Effectively one might term it it's a bit like trying to buy a car, and of course the car salesman will say that this is the list price but you'll be getting a good deal. That's exactly what pharmaceutical companies are doing. And as you perhaps well know, often it would be a much better market if we could actually compare across all countries in the world as to what people are actually paying.

Norman Swan: Just briefly, Philip, we go out to Canadian listeners via the Canadian Broadcasting Corporation. Do you know what the story is in Canada?

Philip Clarke: I think in North America…I haven't looked at Canada specifically, but generally their prices are pretty comparable for many drugs under patent because obviously these markets are fairly linked, but it something I should look up.

Norman Swan: So, to summarise, these are drugs that don't do you any harm but they may not do extra benefit, it is really a question for government as to whether or not they are getting value for money in doctors and their susceptibility to pharmaceutical marketing.

Philip Clarke: Yes, exactly. And I suppose there is also perhaps into the future when now these drugs, the analogues are starting to go off patent, clearly there is potential for what's called biosimilars, which will introduce competition and should push down the price, this is going to be a major issue for governments and doctors in the very near future.

Norman Swan: Because the issue of biosimilars is that it doesn't push down the price, they charge pretty much what the market is giving.

Philip Clarke: Potentially, although here I think there is some potential scope, but there clearly are players who are trying to register and have now got approval to put biosimilars for example for insulin glargine, and we'll see how much that increases competition.

Norman Swan: Thanks very much Philip.

Philip Clarke: Thank you.

Norman Swan: Philip Clarke, professor of health economics at the University of Melbourne's School of Population and Global Health.