When it comes to brand name prescription drugs, Americans pay more than others. Florida Republican Sen. Rick Scott took the story of a group of Minnesotans crossing to Canada to drive home the point.
"Americans are traveling to Canada to pay 12 times less for insulin than they would here in the US," Scott tweeted July 8.
We decided to explore whether Americans can get their insulin in Canada at one-twelfth what they would pay in the United States.
The cost is certainly less in Canada, but by how much is harder to pin down. Particularly in the United States, the gap between list and actual price is often huge. However, people without insurance are most exposed to the highest prices.
Scott’s tweet drew on a Miami Herald article about a drug-buying trip organized by diabetes activist Quinn Nystrom. Nystrom declared the outing a success.
"Pure joy as we walk out of the pharmacy in Canada after buying insulin for 12X less than in the United States. Group insulin order in the U.S.: $23,789.24. In Canada: $1,924.10," Nystrom’s July 1 tweet said.
We asked Nystrom where the American number came from. She told us it was the price the trip members would have paid if they had no insurance and no rebates and paid the full list price.
"We did this because in Canada we were paying the cash retail price there," Nystrom said. "It was the closest comparison we could make. As soon as insurance comes in, then it varies greatly in the United States."
Some in the group did have insurance. Others did not, and Nystrom herself faces hefty bills.
"I have a high-deductible plan, so in January, I paid out-of-pocket $600 for two vials of Novolog — retails for $680," she said.
The bottom line is that the nearly $24,000 in Nystrom’s tweet is the highest possible price — many people would have paid less at their local pharmacy.
"The whole drug industry has seen a huge gap grow between list and actual discounted price over the years," said drug researcher Geoffrey Joyce at the Schaeffer Center for Health Policy and Economics at the University of Southern California. "Insulin is the poster child for that trend."
Joyce called Nystrom’s 12-fold difference "misleading."
"It’s true in extreme cases, but it’s not a fair apples-to-apples comparison," he said.
There are two main ways that Americans avoid paying full freight for prescription drugs. People who have insurance benefit from the negotiated prices that keep the drug on an insurer's list of covered medicines. Or, if a person has no insurance, he or she might have a coupon from a drug maker that cuts the price.
"Pricing of drugs in general, and for insulin specifically, is very complex," a 2018 study from the American Diabetes Association said. "With this system, there is no one agreed-upon price for any insulin formulation. The price ultimately paid by the person with diabetes at the point of sale results from the prices, rebates, and fees negotiated among the stakeholders."
That Byzantine system delivers prices that are higher than in Canada, but research is thin on what the actual gap is.
One hurdle is that Canada has its own complexities. As we’ve reported before, the national health system doesn’t cover prescription drugs. A person’s experience varies according to the province he or she lives in and their employer plans. But at the same time, drug prices in Canada are overseen by the Patented Medicines Price Review Board.
That government agency sets a ceiling on prices, based in part on what the same drug costs in other countries, and that keeps a lid on what Canadians pay. (President Donald Trump has floated an idea along these lines. Even with this approach, problems remain.)
"In Canada, you have the government negotiating on behalf of Canadian citizens," Joyce said. "In the United States, it’s more market driven, and if the market doesn’t work so well, people pay more."
Joyce emphasized that in the United States, those with the least insurance, and the least ability to pay, face the highest prices. As our partners at Kaiser Health News have reported, one out of four people with Type 1 and Type 2 diabetes ration their insulin. That’s hundreds of thousands of people. And even if the price gap between the United States and Canada is on the smaller side, diabetics need insulin forever, and the higher U.S. prices add up.
Scott said that Americans go to Canada to pay 12 times less for insulin than they would in the United States. The difference for most people would not be that great, and in reality, it was not that large even for the people Scott had read about.
Nevertheless, insulin prices in Canada tend to be many times lower than in the United States. Scott’s number points in the right direction, but it overshoots.
We rate this claim Half True.
Rick Scott, tweet, July 8, 2019
Miami Herald, Diabetics charter bus for 815-mile round trip to Canada for affordable insulin, July 8, 2019
Quinn Nystrom, tweet, July 1, 2019
Canadian Agency for Drugs and Technologies in Health, Pharmacoeconomic Review Report: Cost Comparison, December 2017
Patented Medicines Price Review Board, Price Review, April 24, 2018
Good Rx, How Much Does Insulin Cost? – Here’s How 22 Brands Compare, Sept. 21, 2018
Health Care Cost Institute, Spending on Individuals with Type 1 Diabetes and the Role of Rapidly Increasing Insulin Prices, Jan. 21, 2019
American Diabetes Association, Insulin Access and Affordability Working Group: Conclusions and Recommendations, June 2018
Health Action International, Access to insulin: Current challenges and constraints, March 2017
PolitiFact, Bernie Sanders overplays Canada's out-of-pocket health care costs, Feb. 22, 2019
Washington Post, As price of insulin soars, Americans caravan to Canada for lifesaving medicine , June 16, 2019
Email exchange, Quinn Nystrom, July 9, 2019
Interview, Geoffrey Joyce, director of Health Policy, Schaeffer Center for Health Policy and Economics, University of Southern California, July 10, 2019
Interview, Marg Ewan, senior projects manager, Health Action International, July 11, 2019
Email exchange, Steve Morgan, professor, School of Population and Public Health, University of British Columbia, July 10, 2019
Email exchange, Sherry Calder, spokeswoman, Diabetes Canada, July 9, 2019
Email exchange, Julie Frye, senior technical advisor, Management Sciences for Health, July 9, 2019
Email exchange, Kate Parson, spokeswoman, Canadian Agency for Drugs and Technologies in Health, July 9, 2019
Email exchange, Cynthia Cox, vice president Kaiser Family Foundation, July 11, 2019
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