State watchdog points to insulin spending as health care cost driver

DATE : March 13, 2019

Insulin spending in Massachusetts skyrocketed 50 percent in just three years, according to a new state study. The increase is the latest example of the state’s continued issues around drug spending increases and health care affordability.
The Health Policy Commission analysis was released Wednesday during a hearing, as the independent agency seeks to establish a benchmark for Massachusetts health care spending growth next year.
Stuart Altman is the chairman of the Massachusetts Health Policy Commission, which released a report Wednesday on health care spending drivers.
Stuart Altman is the chairman of the Massachusetts Health Policy Commission, which released a report Wednesday on health care spending drivers.
Despite the state’s previous successes holding down total health care spending below previously set benchmarks of 3.6 percent, spending on drugs has continued to go up above the benchmark — rising 4.1 percent from 2016 to 2017. Insulin spending has played an outsized role.
According to the analysis, annual spending on insulin products increased 50 percent from 2013 to 2016 — the most recent year the state could use to derive insulin spending data. For the 9,000 patients in Massachusetts identified as having diabetes, annual insulin costs rose from $3,122 per patient in 2013 to $4,684 per patient in 2016.
By 2016, insulin spending represented 27 percent of total health care spending in the state, outpacing non-insulin prescriptions (26 percent), outpatient care (13 percent) and inpatient care (7 percent).
The state data lines up with other news reports that have pointed to insulin costs as an issue. According to the New York Times, from 2010 to 2015, the price of Lantus — made by Sanofi — went up by 168 percent; the price of Levemir — made by Novo Nordisk — rose by 169 percent; and the price of Humulin R U-500 — made by Eli Lilly — went up by 325 percent.
Massachusetts consumers felt the pinch of the increased costs. By 2016, average annual out-of-pocket spending for insulin was $340. Some residents paid even more, with 24 percent paying over $500.
The increases have contributed to affordability problems. Results from a 2017 survey conducted by the state's Center for Health Information and Analysis, also unveiled Wednesday, found that 43 percent of insured residents had problems affording their health care. Those affordability issues particularly affect people of moderate income, more than people of low income.
Survey results match up with previously released data that found Massachusetts small employers paid the second highest premiums in the country. Large employers had the 10th highest premiums nationwide. Total health care spending was also among the highest in the country, with per capita spending on health care second only to Alaska.
The data will likely encourage the state to set a lower benchmark for health care spending in the year ahead, a decision that will put increased pressure on every sector of the health care economy to maintain spending.
Despite similar pressures in the past, the state has done well overall in recent years. Spending only increased 1.6 percent to $61.1 billion from 2016 to 2017, far below the state’s 3.6 percent benchmark and below the national average of over 3 percent. From 2015 to 2016, total spending increased 3 percent.*90xx704-938-41-0.png
By Jessica Bartlett Reporter, Boston Business Journal
© 2019 American City Business Journals

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