Joe Biden’s Insulin Fictions

He peddles nonsense about prices that almost no one paid.

WSJ editorial.

"The drug maker Eli Lilly said Wednesday that it will cut the sticker price of some insulin products by 70%, and Democrats are taking a victory lap. Well, yes, government coercion can work. But the supposed pricing triumph here is far less than meets the press releases, and the truth is worth noting for the future of drug innovation for Americans with diabetes and other diseases.

“Insulin has been around for 100 years,” President Biden said Tuesday in Virginia Beach, and he says the drug costs $10 to make. “But you’ve been paying three, four, five hundred dollars a month for that. But Big Pharma has been unfairly charging you that—record profits. Not anymore.” The Inflation Reduction Act capped insulin out-of-pocket costs at $35 a month for Medicare, and Mr. Biden wants to extend his price control on insulin into private insurance markets.

This bedtime story also appeared in Mr. Biden’s State of the Union address, and it’s pure fiction. The insulin of a century ago came from animals like pigs and cattle, hardly comparable to today’s products. Long-acting forms can regulate blood sugar for up to 24 hours. Only those who don’t have to inject themselves with needles all day could fail to see the value of an inhaled insulin.

And despite the intoning about profits, net insulin prices have been flat or declining for years. The few patients who struggle to afford the drug are dealing with distortions in insurance and benefit design, not corporate greed. Not everyone benefits from the discounts negotiated by pharmacy-benefit managers. 

Mr. Biden said Wednesday that Eli Lilly’s price cut was “a big deal,” but the best industry analysis suggests three in four patients pay less than $30 out of pocket for insulin. Eli Lilly noted in its press release that, same as before, anyone who doesn’t have insurance can “immediately download” an online coupon for $35 a month insulin, and all the major manufacturers offer such help.

Drug makers know they’re on the political menu and are responding to the pressure. Drug makers will probably spread the costs of cheaper insulin in other products they sell. The Biden Administration sees insulin as a convenient political wedge to sell controls on all drugs, and the politics of lower prices now beats the promise of therapies that may never be discovered because of price controls.

Republicans have been under deep cover on healthcare since they failed to repeal the Affordable Care Act, but there is an opening for a politician willing to make the case that the U.S. is the world’s premiere medicine cabinet. A dynamic economy can make drugs more available now without crushing the capital and ingenuity that eventually produce cures to brutal diseases like diabetes."