When Nicole Smith-Holt went to confront the bosses of Eli Lilly in May 2018, she had not been an activist for long. Only eleven months earlier, she did not follow politics closely, had not met her congressperson, and would never have imagined breaking down in tears before a vice president of a major US pharmaceutical company.
That was before her son, Alec, was found dead on his bedroom floor in Minnesota, 27 days after losing access to her health insurance plan because he had turned the age of 26. His official cause of death was ketoacidosis, a complication of type 1 diabetes. But the real cause, Ms Smith-Holt told the vice president, was the price of life-saving insulin – $1,300 (£986) per month in Alec’s case – and drugmakers’ “greed”.
“Immediately after Alec’s death, we went through this grieving and feeling so alone,” Ms Smith-Holt, 50, tells The Independent. “I didn’t know anybody else who was in the same situation. It wasn’t until I gave my first interview, a couple of months after Alec passed away, that people started messaging me … it made me feel like Alec’s death was not an isolated situation. It made me open up my eyes that this is a crisis.”
Today, Ms Smith-Holt and her fellow campaigners have dragged America’s sky-high diabetes prices into the public limelight, forcing politicians to take notice.
The state of Minnesota has passed Alec’s Law, which forces insulin makers to provide 30 days’ supply at $35 to people in emergencies or 90 days for $50 to people on low incomes, while Colorado, Maine and Utah all have passed similar “safety net” laws according to the patients’ group T1International.
At the federal level, President Joe Biden’s flagship Build Back Better bill includes a $35 price cap on what insured Americans can pay for insulin, which Democrats have hailed as a victory for diabetics.
Yet activists point out that the bill offers no help to the estimated 31m Americans who don’t have health insurance, and have vowed to keep fighting for a better deal.
“Even if that had been in effect two years ago, my sister still would have died,” says Jazmine Baldwin, 29, whose sister Jada died in 2019 because she couldn’t afford her insulin. “So it’s not enough. It’s nowhere near enough.”
‘I was angry. I was so angry’
In early June 2019, Jada Baldwin was due to be a maid of honour at her best friend’s wedding. She was working at a cinema in Virginia, doing everything from selling tickets to helping in the kitchens, pulling 30 to 50 hours per week. When Avengers: Endgame came out in April, she texted her sister Jazmine to say how tired she was.
What Jazmine didn’t know then was that Jada had last taken her insulin three weeks ago. Like millions of people across the world, Jada had type 1 diabetes, meaning that from an early age her body did not naturally produce the hormone insulin, which is needed to regulate blood sugar. In type 2 diabetes the body is able to produce insulin but other cells have built up a resistance to it, which leads to similar problems.
Despite Jada’s hours, she wasn’t considered full time and didn’t qualify for health insurance. Without insurance, her insulin cost $300 for a vial. Later, in hospital, she told Jazmine that she hadn’t said anything because she didn’t feel comfortable asking her relatives for so much money.
“We saw our mom make impossible things happen money-wise while raising us,” says Mr Baldwin, who works as a nurse in a hospital in Raleigh, North Carolina. “We never saw her ask for a handout, and I think that’s been ingrained in us since birth. So when it came time for my sister to have this dire need, she probably struggled with the idea of needing to ask for help.”
Alec Smith was in a similar situation. He made $35,000 a year as a restaurant manager and the best health insurance plan he could find cost $450 a month, on top of a $7,600 deductible – the amount that patients have to pay out of their own pockets each year before their insurance kicks in. He opted to just buy what insulin he could while seeking a job with benefits.
“If Alec had come to me and said ‘hey Mom, they want $1,300 and I don’t have $1,300’, I would have turned around and taken him to the pharmacy,” says Ms Smith-Holt, who in her day job is a financial aid administrator for a community college and would have had to break the bank to find the money.
“But my gut tells me that he did not tell me because I would have suggested that he moved back home … he wanted to be as independent as possible, and that’s probably the last thing he wanted to do at 26 years old.”
Alec began to ration his insulin, an all too common practice to make limited supplies stretch until payday. It’s a delicate operation because the amount of insulin your body needs changes with your blood sugar, which can fluctuate wildly due to eating, exercise, stress, poor sleep, or other medications.
Even when not rationing, you have to constantly monitor your glucose levels, often dropping pinpricks of blood onto test strips, which might also be in short supply. “We’re basically doctors of ourselves 24/7,” says T1International’s founder Elizabeth Pfiester, who has had diabetes since age four.
When blood sugar gets too high the body goes into diabetic ketoacidosis, a runaway cascade of biological processes that releases dangerous amounts of acid into your blood. “It’s a very painful thing; it feels like your blood is on fire,” says Ms Pfiester. “You’re struggling to breathe, you’re vomiting, and eventually, if you don’t get the help you need, you’ll die.” That is what killed Alec and Jada.
After the deaths, T1 recruited both Ms Smith-Holt and Ms Baldwin, and they soon realised that Alec and Jada were not the first, and would not be the last, to die because they could not afford insulin. “I was angry. I was so angry,” says Ms Smith-Holt.
Which raised the question: who is to blame for those prices?
US insulin prices have soared above the rest of the world
Ms Pfiester has experienced first hand what insulin costs in other countries, because though she grew up in the US she now lives in the UK, with its taxpayer-funded National Health Service. Compared to other rich countries, US prices are “outrageous”, outstripping many poorer countries even when adjusted for their GDP.
US respondents to T1’s twice-yearly survey said they paid $490 on average for insulin and diabetes care supplies, about 10 per cent of the nation’s GDP per capita. By contrast, T1 respondents in Canada paid 7 per cent, the UK 1 per cent, and Argentina 0 per cent. A study by Rand in 2020 similarly found US prices up to 14 times higher than those elsewhere, averaging around $85-99 while every other studied country clustered around $7-14.
For Eli Lilly’s Humalog medication, the current list price – meaning the price before any discounts, rebates or reimbursements – is $275 per vial, whereas NovaLog, another insulin made by the Danish multinational firm Novo Nordisk, listed for just over $350 per vial last year. Ms Pfiester says most people need two, maybe three vials per month.
Prices and costs have also risen steeply. Research by the American Diabetes Association (ADA) found that average prices increased by 15 to 17 per cent every year from 2012 to 2016, which together meant they more than doubled. Between 2006 and 2013, the cost to patients even on America’s Medicare safety net soared from just over $300 to well over $700, wildly in excess of inflation.
Ms Pfiester and T1 blame the “big three cartel” of Eli Lilly, Sanofi and Novo Nordisk, the three companies that manufacture almost all the insulin sold in the US. “These companies will do whatever they can to charge the cost that they can get away with for insulin that people need to live,” she says, accusing them of “price gouging”.
It is not clear where all this money goes. Insulin was first turned into a drug in 1922, and its creators sold the patent to the University of Toronto for $1. None of the three companies responded to questions from The Independent about how much they spend on researching new insulins, and none of them would say how much profit they made on each vial of insulin. Nor is it clear how much insulin costs to manufacture.
Instead, activists accuse the companies of “evergreening”, a controversial process by which drug makers keep hold of their intellectual property by making tiny changes to the formulation of a drug. One rival company, Merck, developed its own form of insulin but withdrew it from the market after a lawsuit from Sanofi.
The ADA research also said: “Published data suggests that when one insulin manufacturer increases the price for a given insulin formulation, the other insulin manufacturers often increase their prices by a similar amount shortly thereafter.”
The price of insulin does more than kill, too. Many diabetics are forced to rearrange their entire lives around making sure they have health insurance and can afford the drug, moving cities or foregoing having children to ensure they can afford to stay alive.
“People spend most of their life in fear of losing their insurance, of running out of insulin and the cost going up, or of having to stay in terrible jobs or relationships to ensure they keep their health insurance coverage,” Ms Pfiester told the BBC in 2019. “That’s the best case scenario.”
Insulin drug makers deny ‘price-gouging’
The three drug companies and their industry lobby group deny any price gouging and say they are doing their best to keep costs low. They argue that most people don’t pay their drugs’ list price due to America’s byzantine tangle of rebates, subsidies, discounts and benefits, and instead blame health insurers and market middlemen for failing to pass savings on to patients.
“Comparing prices in the United States to other countries is like comparing apples to oranges,” says Sarah Sutton, director of public affairs for Pharmaceutical Research and Manufacturers of America (PhRMA), which includes all three insulin makers.
“Doing so compares undiscounted US list prices to artificially low prices set by foreign governments. This flawed logic ignores the close to $200 billion [for all drugs] in rebates, discounts and savings negotiated by insurance companies, pharmacy benefit managers, the government and others in our complex drug cost system.”
She claimed that the average net price of insulin, meaning what pharma companies get paid for it after rebates and discounts, has dropped by 40 to 50 per cent since 2014. “Rather than sharing these rebates and discounts with patients,” she said, “many health plans force patients with deductibles … to pay based on the undiscounted list price of medicines.”
What’s behind the rising cost of insulin?
A spokesperson for Sanofi said that its list price increases have not kept pace with growing discounts and rebates, meaning its net price for insulin has fallen by 53 per cent since 2014. “Sanofi is committed to lowering the list price of all its insulins if doing so would directly result in lower out-of-pocket costs for patients,” she said.
Novo Nordisk likewise said that its net prices were dropping while rebates and discounts had more than quadrupled over the past ten years, and claimed that the average monthly cost for its patients is just $31. Eli Lilly said that it had not increased its insulin list prices since 2017 and that the average out of pocket cost has dropped to $28.05.
All three companies described a raft of assistance programmes, special rebates, and emergency offers for patients on low-incomes or without insurance, saying they were committed to providing insulin to whoever needs it.
That does not cut much mustard for the activists, who say that these programmes are complex and arduous to access and that too many people still fall through the cracks or are forced to pay the list price.
“Have you ever tried to get a rebate for anything?” asks Ms Baldwin. “It was a horrific experience, wasn’t it? It took forever, even if you did get the rebate … people shouldn’t have to jump through those kind of hoops to get medication.”
In fact, one study in 2019 actually found that even assuming a 50 per cent rebate, the amount spent on insulin by insurers and patients roughly doubled from $1,432 per person in 2012 to $2,853 per person in 2016.
A bipartisan report from the US Senate found fault in all corners, concluding that insulin makers and pharmacy middlemen were both helping to keep prices high. The middlemen, it said, had every incentive to bid up prices by demanding ever bigger rebates (which are linked to their fees), while the big three insulin makers had “aggressively” raised list prices “absent significant advances in the efficacy of the drugs”.
Ashes left at the doorsteps of Big Pharma
As T1 stepped up its campaign, more and more people were added to the group’s “In Memoriam” page. Patients’ groups delivered huge bloodstained sacks with dollar signs to the headquarters of Eli Lilly; brought gravestones with loved ones’ names and even vials of ashes to the front door of Sanofi; held Mother’s Day rallies in three cities; and put Ms Smith-Holt and Alec on two billboards in Indianopolis.
Ms Smith-Holt estimates that she has done about 300 or 400 interviews, to say nothing of all the politicians. “I have definitely been lied to to my face by legislators,” she says, “and I have also had legislators tell me straight up that this was a battle that nobody wants to take on because they just don’t want to go head to head with the pharmaceutical industry.”
Indeed, PhRMA has pushed back hard against Mr Biden’s pseudo-price-cap, although Eli Lilly told The Independent it actually supports the provision.
“A damaging bill jammed through a partisan process will not provide patients struggling to afford their medicines meaningful relief,” PhRMA thundered last week. “The bill inserts the heavy hand of government into America’s medicine cabinet, and we know when government bureaucrats set the price of medicine, patients ultimately have less access to treatments and cures.
“This bill also ignores persistent problems throughout the health care system, such as tactics by insurers and middlemen that shift higher costs onto vulnerable patients. Middlemen shouldn’t be allowed to pad their profits by collecting massive rebates and then charge patients full price for medicines.”
It has also condemned the Democrats’ HR3 bill, which would allow the US government to directly negotiate its prices with drug companies, predicting that it will have “devastating” consequences.
Although the insurance pay cap is not good enough for Ms Smith-Holt and Ms Baldwin, they still want it to pass, and their fight now is to make sure it does not get whittled out of the bill in the bruising Senate negotiations to come.
The Democrats’ razor-thin majority in that house means that spending-averse senators can easily blockade the bill, and both West Virginia’s Joe Manchin and Arizona’s Kyrsten Sinema have indicated that they are will not leave it unscathed.
According to the lobbying watchdog Open Secrets, Ms Sinema is the third biggest recipient of pharmaceutical industry donations since the 2020 election, with $106,325 donated so far, even though her seat is not up for grabs again until 2024. Kaiser Health News has dubbed her “a pharma favourite in Congress”, and one former lobbyist told the Tucson Sentinel that drug makers see a long-term potential ally.
‘I think Alec has been helping me this entire fight’
Ms Smith-Holt is cautiously optimistic, saying the struggle is “about halfway there” and legislators are more receptive than ever. After the left-wing Democrat Ilhan Omar erroneously suggested that the Build Back Better bill would cap everyone’s insulin costs, Ms Smith-Holt objected and got a call with Ms Omar’s chief of staff, who offered to delete the tweet (Ms Smith-Holt demurred).
“To ensure that we maximise the coverage for people, it’s going to have to be a federal policy,” she says. “But until that happens we’re going to work state by state if we have to, and pass Alec’s Bill in each and every state until we feel comfortable that nobody is going to slip through the cracks – that nobody is going to die like Alec and so many others have died because they can’t afford their insulin.”
If T1 succeeds, it will be in no small part a testament to the power of Alec’s story. He was the first name on T1’s “In Memoriam” page, and galvanised others to come forward while capturing the attention of journalists, researchers and politicians.
“Lots of people know about Alec,” says Ms Baldwin. “And I hate the reason that they know, but I love that his family has been so, so vocal, and responsible for a lot of change. They got the bill passed in his name – that’s monumental. Alec’s case has proven that this kind of advocacy works.”
Ms Pfiester says Alec’s story was “hugely” influential, saying it has “put [insulin prices] in the national spotlight and kept it in the national spotlight”. She compares it to the impact felt in the Eighties and Nineties when HIV and AIDS patients spoke out about their experiences and insisted on making their battle personal.
It is a bittersweet legacy for Ms Smith-Holt to hope for from her son, but she now believes his death will be a “big contributing factor” to the passing of federal legislation. She is a Lutheran Christian, so believes in the afterlife and believes Alec is supporting her.
“I think Alec has been helping me this entire fight,” she says. “I think that he has been doing what he can do from where he is at, along with the other victims. I think they’re all in cahoots; it would not surprise me at all.”
https://www.independent.co.uk/news/world/americas/us-politics/insuluin-prices-diabetes-alec-smith-b1972475.html Alec Smith: How a Minnesota man who died from soaring insulin prices could change US diabetes care forever