Manufacturing Costs for Diabetes Medicines Could Likely Be Lower, Study Finds

An economic analysis of manufacturing costs for diabetes medications revealed insulins, sodium-glucose co-transporter 2 (SGLT2) inhibitors, and glucagon-like peptide-1 agonists (GLP-1A), could likely be manufactured for substantially lower costs than current prices.¹

“With a steadily increasing number of people living with diabetes requiring insulin, strategies must urgently be developed to reduce insulin prices and ensure affordable and reliable access in all parts of the world,” wrote Melissa J. Barber, PhD, Yale Collaboration for Regulatory Rigor, Integrity, and Transparency (CRRIT), Yale School of Medicine and colleagues.

Given the growing, global burden of diabetes, healthcare systems are afflicted by unaffordable medical prices, with health expenditures tied to diabetes tripling in the past decade-plus.² Significant challenges persist in access to insulin and other treatments for type 2 diabetes (T2D), including SGLT2 inhibitors and GLP-1As, and costs often affect low- and middle-income countries the most.

A clearer understanding of the costs associated with diabetes medicines could help health systems target a reasonable price during negotiations with pharmaceutical manufacturers.¹ However, Barber and colleagues noted limited data exists on the association between manufacturing costs and current market prices of insulins, SGLT2 inhibitors, and GLP-1As.

For this analysis, investigators developed methods for estimating pharmaceutical manufacturing costs, updated cost analyses for insulin, and to their knowledge, provided the first published manufacturing cost estimates for SGLT2 inhibitors and GLP1As in diabetes treatment.

The economic evaluation modeled the cost of all three medication classes and estimated a sustainable cost-based price (CBP), based on the active pharmaceutical ingredient cost per unit combined with formulation costs and other operating expenses, plus a profit margin with a tax allowance. Average API costs were modeled by analysis of internal shipment data from January 2016 to March 2023.

Current market prices were obtained for 13 countries, including four high-income and nine middle-income countries, and compared with cost-based prices. Countries were chosen based on the availability of public databases, and an intention for geographic and economic diversity representation. Barber and colleagues noted they were unaware of a publicly available medicines price database for a low-income country.

After an economic evaluation of manufacturing costs, the analysis showed the estimated CBPs for treatment with insulin in a reusable pen device could be as low as US $96 (human insulin) or $111 (insulin analogs) per year for a basal-bolus regimen, $61 per year using twice-daily injections of mixed human insulin, and $50 (human insulin) or $72 (insulin analogs) per year for a once-daily basal insulin injection.

Moreover, the estimated cost-based prices per month were US $1.30 to $3.45 per month for SGLT2 inhibitors, except canagliflozin ($25.00-$46.79), and from $0.75 to $72.49 per month for GLP1As.

For dapagliflozin and empagliflozin, the CBPs were lower than the current lowest market prices, while the CBP of canagliflozin overlapped the lowest current market prices. The CBPs per month for GLP1As were all substantially below the lowest current market prices.

Although prices could be reduced to $1.30 per month for SGLT2 inhibitors and under $0.75 for treatment with GLP-1As, investigators noted further price reductions will likely occur once a robust generic and biosimilar market emerges globally.

“Our findings suggest that, for nearly all insulins, SGLT2 inhibitors, and GLP-1 RAs, in nearly all countries surveyed, prices could be reduced substantially if robust generic/biosimilar manufacture was enabled,” they wrote.

In particular, Barber and colleagues indicated that the production cost analysis could benefit health systems by forecasting what prices will be possible once genetic competition occurs, as shown in the aftermath of the HIV/AIDS pandemic.³

“Given the potential for generic manufacture to substantially reduce prices and thus increase access to these treatments, mechanisms that enabled early generic manufacture in other diseases, such as HIV and hepatitis C, should also be considered for use in diabetes medicines,” they wrote.¹

References

1. _{Barber MJ, Gotham D, Bygrave H, Cepuch C. Estimated Sustainable Cost-Based Prices for Diabetes Medicines. JAMA Netw Open. 2024;7(3):e243474. doi:10.1001/jamanetworkopen.2024.3474}
2. _{Parker ED, Lin J, Mahoney T, et al. Economic Costs of Diabetes in the U.S. in 2022. Diabetes Care. 2024;47(1):26-43. doi:10.2337/dci23-0085}
3. _{Goemaere E, Ford N, Benatar SR. HIV/AIDS prevention and treatment. Lancet. 2002;360(9326):86-88. doi:10.1016/S0140-6736(02)09343-1}