Spending on Diabetes Drugs on the Rise

Study Shows Expenditures Are Going Up Due to Greater Use of Newer Drugs

Medically Reviewed by Louise Chang, MD on October 27, 2008
From the WebMD Archives

Oct. 27, 2008 -- Expenditures for prescription diabetes drugs nearly doubled over a six-year period, largely due to the increased use of newer and costlier medications, a study shows.

Between 2001 and 2007, diabetes drug costs in the U.S. increased from $6.7 billion to $12.5 billion, researchers from Stanford University School of Medical and the University of Chicago report in the Oct. 27 issue of Archives of Internal Medicine.

The researchers questioned whether the newer drugs' benefits justify the increase in costs, noting that studies comparing the effectiveness of newer and older diabetes medications have not been done.

University of Chicago assistant professor of medicine and study lead author G. Caleb Alexander, MD, tells WebMD that given the increase in diabetes drug costs, such studies are badly needed.

"Newer doesn't necessarily mean better," he says. "Given that we have less experience with the newer drugs on the market and given their greater costs, I think the burden of proof is for the newer drugs to be demonstrated as worth the money."

Diabetes Drug Costs Growing

Alexander says newer diabetes drugs like the injectable medication Byetta and the novel oral drug Januvia typically sell for five to 10 times the cost of older, generic drugs.

The investigation shows that after just over a year on the market, one in 10 prescriptions written for a diabetes medication in the fourth quarter of 2007 was for Januvia, marketed by Amylin Pharmaceuticals.

Between its release in June 2005 and the fourth quarter of 2007, Merck's Byetta captured 4% of the prescription diabetes drug market.

But American Diabetes Association (ADA) Vice President of Clinical Affairs Sue Kirkman, MD, points out that drug expenditures make up only about 10% of the overall cost of treating diabetes.

In a report released last spring, the ADA estimated the total cost of diabetes in the U.S. in 2007 to be $174 billion, including $116 billion in medical expenditures and $58 billion in reduced productivity.

Kirkman agrees that it would be useful to have long-term trials designed to determine the cost-effectiveness of the new drugs vs. the old, but she says such studies are unlikely.

"It would be incredibly expensive," she tells WebMD. "It is true that we don't really know if over the long term one drug is better than another. But it is also true that we are moving in the right direction in terms of diabetes control."

Due to better blood sugar control and better overall management, she says fewer diabetes patients are developing some of the most serious complications of the disease, such as kidney failure and blindness.

New Diabetes Cases on the Rise

Alexander says getting diabetes treatment costs under control is critical because the number of Americans who have the disease is expected to soar within the next few decades.

Newly released figures from the CDC bear this out. Among the highlights of the report:

  • In 2007, almost 18 million Americans had been diagnosed with diabetes, up from 11 million in 2000.
  • Another 5.7 million people had diabetes, but had not been diagnosed.
  • Another 57 million American adults had prediabetes.

Alexander and senior author Randall Stafford, MD, PhD, of the Stanford Prevention Research Center, analyzed data from two national prescription drug databases to come up with their drug cost estimates.

They found that the estimated number of visits to a doctor for diabetes treatment increased from 25 million in 1994 to 36 million in 2007.

During the same period:

  • The percentage of patients treated with only one drug declined by almost half, from 82% to 47% of doctor visits.
  • Insulin prescriptions decreased from 38% to 28% during the period.
  • Prescriptions written for older sulfonylurea drugs declined from 67% to 34%.

Between 2001 and 2007, the average diabetes drug prescription cost rose from $56 to $76, mostly due to the increasing use of newly available drugs like Januvia and Byetta, the researchers note.

"It is important to recognize how expensive treatment for diabetes has become," Stafford says. "The near-doubling of diabetes [drug] costs may partly reflect better care, but we need to step back and examine the value of newer and more costly medications that may be overused."

Merck issued a statement in response to the study, noting that the company is committed to the development of new diabetes drugs.

"Not all diabetes treatments work for every patient and it is important to research and bring new treatment options to market to help patients to control their blood sugar levels," says Amy Rose, Merck director of media relations.

Calls to Amylin Pharmaceuticals were not returned in time for publication.

Show Sources


Alexander, G.C. Archives of Internal Medicine, Oct. 27, 2008; vol 168: pp 2088-2094.

G. Caleb Alexander, MD, assistant professor of medicine, University of Chicago.

Randall Stafford, MD, PhD, associate professor of medicine, Stanford Prevention Research Center.

Sue Kirkman, MD, vice president of clinical affairs, American Diabetes Association.

Amy Rose, director of media relations, Merck & Co.

Diabetes Care, March 2008; vol 31.

CDC National Diabetes Fact Sheet, 2007.

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