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Letter: Competition, not more regulation, is needed to lower insulin costs

Globally, insulin is cheapest in countries without lavish patent protections and high regulatory barriers.

Raymond March is an assistant professor of agribusiness and applied economics at North Dakota State University, a research fellow with the Center for the Study of Public Choice and Private Enterprise and the Independent Institute, and the director of FDAReview. He specializes in health care policy.
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In a recent column , Jim Shaw urged North Dakota lawmakers to join eight other states in passing legislation to cap insulin co-payments at $100 per month. To help financially struggling patients and keep drug producers from “price gouging,” the proposed legislation requires health insurance companies to cover any additional expenses.

I applaud Shaw and state Sen. Tim Mathern, D-Fargo, for tackling a pressing and concerning problem. Even with health insurance, insulin can cost well over $300 a month. Faced with the heartbreaking choice of having enough insulin or making financial ends meet, many diabetics resort to rationing their injections or turning to black markets to provide life-prolonging medication.

As a type 1 diabetic who depends on insulin to live, I am deeply concerned about skyrocketing insulin prices. But as a health economist, I’m skeptical such legislation will make insulin more affordable.

In 2019, Colorado became the first state to require health insurance providers to cap insulin co-pays at $100 per month. In doing so, Colorado legislators believed their bill would “help a lot of families” and “finally declare that the days of insulin price gouging are over.” However, almost a year after the law took effect, a survey found nearly 40% of Coloradoans with diabetes still “dangerously rationed” their insulin.

Our neighbors to the north passed even more stringent laws but experience similar failures. Canada has price caps on insulin and allows insulin to be purchased without a prescription, yet many Canadians with diabetes still need to ration their insulin because restrictions limit how much insulin patients can buy.


The primary reason capping insulin co-pays has failed and will fail here is because high insulin prices are a symptom of a much larger problem. That problem is regulation, which stifles competition to provide cheaper drugs.

Globally, insulin is cheapest in countries without lavish patent protections and high regulatory barriers. In contrast, the U.S. boasts one of the most heavily regulated pharmaceutical industries in the world and the highest insulin prices.

When drug producers can compete, prices drop and more patients gain access to life-saving medication. We’ve seen evidence of this in the EpiPens market when pharmacies began ordering a $10 alternative treatment as EpiPen prices soared to over $300 in 2015.

A similar event is unfolding with insulin. As insulin prices skyrocket, Walmart began purchasing an older insulin named ReliOn and providing it in its pharmacies for $25 a vial (about one month’s supply). ReliOn lacks many of the beneficial features of more modern insulins, but it provides a desperately needed inexpensive option. Unfortunately, current North Dakota laws prohibit chain stores such as Walmart from operating their pharmacies. These barriers limit the number of pharmacies and their ability to supply cheaper medicines to patients.

Unfortunately for millions of diabetics struggling to afford life-saving medication, we are unlikely to see insulin prices drop until real efforts to cut regulation and allow more competition are on the table.

Raymond March is a health economist and faculty fellow at the Center for the Study of Public Choice and Private Enterprise at North Dakota State University. His views are his own.

This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.


Related Topics: HEALTHCARE
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