You Won’t Believe How Much Diabetes is Costing the U.S.
The budget-busting price of Sovaldi, a drug used to treat hepatitis C has generated wave after wave of media attention, but it’s far from the only drug creating cost problems for patients and insurers.
As Michelle Andrews of Kaiser Health News points out, diabetes affects 29 million Americans, or 10 times as many people as hepatitis C, and the costs of treating it have been rising quickly. And because it’s a chronic condition, people require lifetime care.
Related: Diabetes Detection Up in Pro-Obamacare States
In 2011, the average annual health spending for individuals with diabetes was $14,093. Two years later, it had risen to $14,999, according to the Healthcare Cost Institute. In contrast, a person without diabetes spent about $10,000 less in medical costs in 2013. Pharmacy provider Express Scripts said earlier this year that 2014 marked the fourth year in a row that medication used to treat diabetes were the most expensive of any traditional drug class.
In all, diabetes costs totaled an estimated $245 billion in 2012, including both direct medical expenses and indirect costs from disability and lost work productivity.
While some of the most popular diabetes drugs aren’t particularly expensive, the new brand-name drugs that are continually being introduced offer more effective treatment and fewer side effects — but also come with a higher price tag. Less than half of the diabetes prescription treatments filled in 2014 were generic.
Nearly a century after its discovery in 1921, insulin is still a common form of treatment for the millions of people with type 1 diabetes, yet there is still no generic form available. Patent protection has been extended in some cases due to improvements in existing formulations. Once those patents expire, Andrews notes, biologically similar drugs could replace them and reduce the price by up to 40 percent.
Related: This Disease Hikes Health Care Costs By More than $10,000 a Year
The financial ramifications of diabetes don’t just stem from the cost of drugs or medical treatment — it’s also been proven that people with diabetes have a high-school dropout rate that is six percentage points higher than those without the disease, according to a Health Affairs study. In addition, young adults with diabetes are four to six percentage points less likely to attend college than those without the disease.
Diabetes also contributes to lower employment and wages. On average, a person with diabetes earns $160,000 less over the course of their lives than people who don’t develop the disease. By age 30, a person with diabetes is 10 percent less likely to be employed.
So even if it’s not generating as many headlines as hepatitis C at any given point in time, the costs of diabetes can’t be ignored.
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Number of the Day: $22 Trillion
The total national debt surpassed $22 trillion on Monday. Total public debt outstanding reached $22,012,840,891,685.32, to be exact. That figure is up by more than $1.3 trillion over the past 12 months and by more than $2 trillion since President Trump took office.
Chart of the Week: The Soaring Cost of Insulin
The cost of insulin used to treat Type 1 diabetes nearly doubled between 2012 and 2016, according to an analysis released this week by the Health Care Cost Institute. Researchers found that the average point-of-sale price increased “from $7.80 a day in 2012 to $15 a day in 2016 for someone using an average amount of insulin (60 units per day).” Annual spending per person on insulin rose from $2,864 to $5,705 over the five-year period. And by 2016, insulin costs accounted for nearly a third of all heath care spending for those with Type 1 diabetes (see the chart below), which rose from $12,467 in 2012 to $18,494.
Chart of the Day: Shutdown Hits Like a Hurricane
The partial government shutdown has hit the economy like a hurricane – and not just metaphorically. Analysts at the Committee for a Responsible Federal Budget said Tuesday that the shutdown has now cost the economy about $26 billion, close to the average cost of $27 billion per hurricane calculated by the Congressional Budget Office for storms striking the U.S. between 2000 and 2015. From an economic point of view, it’s basically “a self-imposed natural disaster,” CRFB said.
Chart of the Week: Lowering Medicare Drug Prices
The U.S. could save billions of dollars a year if Medicare were empowered to negotiate drug prices directly with pharmaceutical companies, according to a paper published by JAMA Internal Medicine earlier this week. Researchers compared the prices of the top 50 oral drugs in Medicare Part D to the prices for the same drugs at the Department of Veterans Affairs, which negotiates its own prices and uses a national formulary. They found that Medicare’s total spending was much higher than it would have been with VA pricing.
In 2016, for example, Medicare Part D spent $32.5 billion on the top 50 drugs but would have spent $18 billion if VA prices were in effect – or roughly 45 percent less. And the savings would likely be larger still, Axios’s Bob Herman said, since the study did not consider high-cost injectable drugs such as insulin.
