AskNadia: Why Doesn’t Anyone Address the Huge Price Increase in Pumps Over the Last Decade

Dear Nadia:

Why doesn’t anyone address the huge price increase in pumps over the last decade? For my original Medtronic Paradigm pump 10 years ago, my insurance, Kaiser, paid 80 percent, so my share was less than $1,000. Today, an equivalent model is between $7,000 and $8,000. Kaiser now only pays 50 percent. T he state of the art model with CGM is well over $10,000.

 My pump is well out of warranty. If/when it breaks down, I will not be able to afford a new one. My pump allowed me to achieve very good control and made it much easier to manage my diabetes. It will be a huge setback to return to multiple daily injections. Why, instead of the prices dropping as usually happens as new technologies come into greater use, pump prices quadrupled or increased even more?

 Timothy M.

Dear Timothy:

I have asked several pump companies about the increase in costs for insulin pumps over the last decade. No one has been able to give me a direct answer.  The closet I have come to an answer in terms of what pumps cost, is at the European Association for the Studies of Diabetes (EASD) in Munich.  Most common answer at the conference? “it depends on the governments contract.” The insulin pump companies negotiate on pricing with the European governments. If they agree on price, then “the cost to the patient is of no significance.” This was loudly echoed by every EASD insulin pump representatives that I spoke to.

When you read “the United States subsidizes foreign nations socialized medicine”; they mean governments abroad pay a lower price for medical devices and medications than the United States government.  The U.S. health insurance companies generally uses the U.S. governments acceptable re-reimbursement rate when pricing their plan benefits and co-payments.  Since your  co-payment is tied to the allowable pricing, this can translates to steeper co-payments  depending on your benefits.

Back to your simple question to which there is no simple answer. There are several factors that I think apply to your question:

• The increased sophistication of insulin pumps, which increases their cost. Present day pumps are leaner, sturdier, faster, and equipped with more complex algorithms than their predecessors from only five or 10 years ago.

• The need for pump manufacturers—whether or not we agree with their motivation—to generate profits they can return to their shareholders.

• Pressure on U.S.  pharma companies to sell their products in other countries, such as Canada and the European Union, at near or below-cost prices. This leaves the US market as the companies’ best profit generator.

• Immense pressure on insurers to be accessible to anyone who wants to buy health insurance under provisions of the Affordable Care Act. This creates new out-of-pocket expenses for insurers, who then look to increases in co-pays and deductibles to cover the expense of serving customers whom they previously would have rejected.

Fortunately, some manufacturers will assist diabetes patients in getting their healthcare insurance company to pay for a pump. Healthcare plans can rely on their vast buying power to get pump manufacturers to substantially reduce their per-unit prices in bulk orders. However, that is no assurance that the insurance company will pay for a large percentage of the pump’s cost.

For people who are uninsured—and there are still millions of them—the inability to pay for insulin pumps without help will have to wait upon lowered pump prices as it becomes cheaper to manufacture pumps or else some kind of outside help.

What May Make Prices Go Down and Accessibility Increase

It may be possible to get diabetes care through the Affordable Care Act. Unfortunately, a law designed to lower healthcare payments instead has increased out-of-pocket expenses for most consumers seeking health plan coverage. For low-income people, the co-pay requirements of even the lowest-priced healthcare plans can make them shy away from signing up.

Still, as taxpayers they have to prove to the federal government that they have some form of health insurance. This puts lower-income people with diabetes in a hard place: If the best they can afford is a “Bronze” plan (the more expensive plan names are Silver, Gold, and Platinum), it may not cover diabetes therapy expenses, especially insulin pumps. If they don’t sign up for a healthcare plan, they can be penalized at tax time.

It may be, as the number of type 2 diabetes cases explode—an estimated 80 million Americans are pre-diabetic—Medicare will begin to cover insulin pump expenses. As with insurance companies, the federal government has immense bargaining power when it comes to the prices of medical drugs and technology. “May” is the operative word here. In a sort of rob-Peter-to-pay Paul move, an estimated $700 billion in funds designated for Medicare were switched to the ACA to help it fund its startup costs and provide initial coverage for people who couldn’t afford even a Bronze plan.

If I could predict the future, I would say that the pressure created by millions of new cases of type 2 will force the federal government to include insulin pumps and continuous glucose monitors in its health insurance coverage, probably under Medicare. These tools will not be top-of-the-line bells-and-whistle instruments, but still will perform pretty well enough to relieve people with diabetes of some big burdens.

One argument that could go a long way toward government support for insulin pumps is that their use will help prevent millions of cases of amputations, blindness, kidney failure, and cardiovascular problems. As the old saying goes, “A stitch in time saves nine.”

Disclaimer:

Nadia’s feedback on your question is in no way intended to initiate or replace your healthcare professionals’ therapy or advice. Please check in with your medical team to discuss your diabetes management concerns.

View Nadia’s Videos

About Nadia:

Nadia was not only born into a family with diabetes but also married into one. She was propelled at a young age into “caretaker mode,” and with her knowledge of the scarcity of resources, support, and understanding for people with diabetes, she co-founded Diabetes Interview, now Diabetes Health magazine.

Nadia holds 14 nominations for her work as a diabetes advocate. Her passion for working in the diabetes community stemmed from her personal loss—a mother and a brother who both succumbed from the effects of type 2 diabetes. She has used her experience as a caretaker to forge a career in helping others.

For 26 years, Diabetes Health has contributed free copies of the magazine to healthcare professionals and pharmacies that use the publication as an educational resource for patients living with diabetes.