US Rep. Gaetz’s diagnosis of what’s driving insulin costs misses the root cause

At the end of March, after the House passed a bill that would cap the cost of insulin at $35 per month for insured consumers, Rep. Matt Gaetz (R-Fla.) tweeted about why he voted against the legislation.

“Insulin price increases have more to do with increased consumer demand than the bad behavior of Big Pharma, which I am quick to condemn,” Gaetz wrote.

He continued, in a 10-part Twitter thread, to offer weight loss as a potential solution to insulin costs rather than capping prices: “90-95% of people with diabetes have type 2 diabetes, which ‘can be prevented or delayed with healthy lifestyle changes, such as losing weight, eating healthy food, and being active.’ Arbitrary price controls are no substitute for individual weight control. Since 2000, the number of diabetes cases in the U.S. has nearly doubled. The demand for insulin has increased and the requisite price increase has followed suit. In other words, the price of insulin increases as waistlines increase.”

The tweet picked up attention on social media and from news outlets, but we wondered whether there was any connection between demand for insulin and the rising cost of the drug. One economic principle states that, for some products, if demand increases, prices will follow.

Does that hold true for insulin, a drug that millions of Americans need to survive?

We reached out to Gaetz’s office to ask for the evidence to back up his claim but received no response.

So we asked the experts to explain what’s going on with insulin prices.

Types of diabetes and treatment

Insulin was first discovered in 1921 and patented two years later. The hormone is essential for people with Type 1 diabetes because their pancreas no longer makes natural insulin, needed to regulate blood sugar. An extremely high blood sugar level can be deadly. These patients make up about a tenth of the total number of people with diabetes in the country.

Some patients need to inject insulin often, at least twice a day.

The majority of people with diabetes, however, have Type 2, which has been linked to weight gain. Excess weight may interfere with the body’s ability to effectively use insulin, leading to high blood sugar levels.

“As obesity increases, diabetes increases as well,” said Dr. Paresh Dandona, a professor at the University at Buffalo’s medical school who studies diabetes.

But many of these patients are not prescribed insulin as a treatment. Around 30% of people with Type 2 diabetes use insulin when other drug options are not successful in treating the disease, Dandona said. For some Type 2 patients, exercising and a healthier diet “may help reduce the insulin dose, but it doesn’t eliminate its use.”

How insulin drug pricing works

Drug pricing experts said there’s no question that insulin’s list price (the amount charged to consumers and their health plans) has risen over the past decade. A 2020 study found that the list price of insulin products increased by 262% from 2007 to 2018, while a 2021 study found that from 2014 to 2018 the list price of insulin products increased by 40%.

Is there a reason the price has ballooned?

Not really, said the experts, except that the…