No one could explain why this college student saw the price of his insulin jump 150%, and it reveals a key problem with the US healthcare system

• For the 1.25 million Americans living with Type 1 diabetes, insulin is a life-saving drug that helps them process the sugar in their blood.
• Price increases for insulin have put pressure on people living with diabetes who don't have insurance, or whose insurance plans require them to pay the full price of the medication.
• But even those with comprehensive insurance are feeling the pressure. Business Insider spoke with one family who saw its insulin costs increase drastically in 2018 - jumping 150%.

The year started out simply enough. In January 2018, Carole Andrew ordered a refill of the prescription insulin Novolog for her son Andrew B., a 22-year-old college student who has Type 1 diabetes.

They got five boxes of Novolog, enough for 90 days. She paid $114.95, and her health insurer paid another $268.23, according to pharmacy receipts reviewed by Business Insider.

(We're omitting Andrew B.'s last name, which is different from his mother's, at her request. She doesn't want employers to discriminate against him when he tries to find a job because they're worried about covering his healthcare costs.)

In June, Carole was asked to pay $191.60 for the same refill for her son's insulin, almost $77 more than at the beginning of April. In October, the price increased again. The cost was now $285.39, an increase of 150% from January. After that, Andrew B. reached his deductible for the year and subsequent refills cost him nothing.

'It's been an absolute nightmare'

The family's experience trying to figure out the cost of a vital drug is indicative of the confusion and frustration that people across the US face as they try to navigate the healthcare system. The difficulty of determining how much a doctor's visit or surgery will cost has been well documented, even as health-insurance plans increasingly put people on the hook for more of their medical bills.

Thomas D'Angelo, a pharmacist and owner of Americare Pharmaceutical Services, said he often sees patients whose drug prices fluctuate monthly.

"I have no control over what I charge the patient if they're going through insurance," D'Angelo said.

After hours of calls and months of trying, Carole hasn't figured out why the price of her son's insulin keeps changing.

"It's been an absolute nightmare," she said.

Here's what the companies who manage the family's coverage told us.

• Carole said a case manager assigned through her insurer, Cigna, tried to help get answers, but the insurer relies on CVS Caremark to handle prescription benefits. Each person in the family has a $1,250 deductible, which in previous years hadn't been reached, and the family's expected to pay 30% of the cost of some prescriptions like insulin. A representative for Cigna deferred comment to Caremark because it's the organization managing Andrew B.'s prescriptions.
• CVS Health, which oversees the family's pharmacy benefits and ships them the insulin, told Business Insider that fluctuations in price aren't uncommon.
• "As a [pharmacy benefit manager] CVS Caremark is focused on negotiating the lowest price possible for the prescription drugs that are available to our clients and their members," Christine Cramer, a spokeswoman for CVS, told Business Insider in an email. "It is not uncommon to see fluctuations in the cost share that a member may be responsible for throughout the course of a year. These variations may be attributed to a variety of factors including changes to the list price of a drug and/or the impact of a negotiated rebate or discount adjusted over time."

The list price of insulins keeps rising, but that's only part of the problem

Peter Goldstein, a professor of pharmacy at Long Island University Brooklyn, reviewed the transactions for Business Insider.

"There's just no rhyme or reason," Goldstein said. "I've never seen anything so drastic."

There are three companies that make insulin, including Novo Nordisk, which produces the Novolog insulin that Andrew B. uses. Over the past few decades, the prices of those medications have increased substantially.

In July 2018, Novo Nordisk increased the price of Novolog by 5%, to $289 per 10-milliliter vial. The company has little say over the actual prices paid by customers at the pharmacy, because of the complex way the US drug payment system works, Novo Nordisk spokesman Ken Inchausti told Business Insider.

"The vast majority of our products are sold through pharmacy benefit managers that aggressively negotiate prices," he said. "Many of the insured may benefit from the net prices payers negotiate while others may not. Uninsured patients or those in certain insurance plans that require co-insurance or are high deductible health plans are exposed to list price."

He added: "We are committed to working with all stakeholders in the healthcare system to try and ensure that insulin is available and affordable for all those in need of this critical medicine."

The annual cost of insulin has more than doubled since 2012

The price increases for insulin put pressure on people living with diabetes who don't have insurance, or whose insurance plans require them to pay the full price of the medication. According to a report released on Monday by the Health Care Cost Institute, annual insulin costs for people with Type 1 diabetes and their health plans have increased from $2,684 in 2012 to $5,705 in 2016 making up about a third of their total costs for managing their diabetes. The report doesn't account for rebates that often reduce the cost of insulin.

The high cost has led some people with diabetes to turn to the black market, crowdfunding, and Facebook pages to get access to insulin. Others have rationed the insulin they take to make prescriptions last longer, which puts them in potentially deadly situations.

There are about 29 million Americans known to have one of the two types of diabetes. Andrew B.'s kind, Type 1, is an autoimmune disease. His body mistakenly kills the cells supposed to make his body's insulin, a hormone that helps people absorb and process the sugar in food. The 1.25 million people in the US who have Type 1 diabetes need to inject insulin to live.

Andrew B. is a senior at Rutgers University studying mechanical engineering. He was diagnosed with Type 1 right before college. Since he's still on his parents' insurance coverage, his parents have been working to figure out what's going on while he focuses on school. But he has made changes, too, such as cutting back on carbs so that he wouldn't have to take as much insulin, he said.

The challenges of getting insulin reliably

The fluctuating price of his insulin injectors hasn't been the only curveball this year.

Around August, Carole started having trouble getting refills on the pens. First, there were issues with the prescription, requiring a physician to write a new one. Then the family was headed on vacation and Caremark wasn't able to guarantee the insulin would reach them in time. Another delay occurred when Caremark called the family for an extra approval to ship the pricey medication before it would send it.

For a time, Carole turned to getting a prescription for monthly vials instead, filling them through Walgreens.

In August, three 10-milliliter vials of Novolog cost her $88.42, with her insurance picking up the rest of the $294.72 price tag. Carole went back in September for a refill at Walgreens. That time, it cost her $135.29, out of a $450.98 price tag.

At the start of 2019, the family's deductible reset, starting the process anew. When Andrew B. next needs a refill, Carole said she plans to just fill the prescriptions through a Walgreens pharmacy because it's more convenient. While the individual prescriptions will initially be more expensive than ordering through the mail, she's accepted that Andrew B. will hit his deductible, so the annual cost will be the same no matter what.

Andrew B. will require insulin his whole life, which makes the challenges of paying for insulin and navigating coverage that he and others face an ever-present issue. In a New York Times opinion piece, Danielle Ofri, who practices at Bellevue Hospital, in New York, described what it's like as a doctor to have a patient with diabetes regularly go through the process of requesting new forms of insulin based on changes in what their insurance will cover.

"My patient's 'preferred insulin' changed three times in a year, so each time she went to the pharmacy, her prescription was rejected," Ofri wrote. "On the doctor's end, it's an endless game of catch-up."

And while some states have passed laws around insulin price transparency, it remains to be seen if congressional investigations into price increases will affect the cost shouldered by patients.

As for Andrew B., as graduation approaches, the prospect of finding a job that will give him benefits to cover the cost of his insulin is weighing on him.

"It just makes me feel nauseous thinking about it," he said.

Want to tell us about your healthcare experience? Email the author at lramsey@businessinsider.com.

• Read more:
• Walgreens is forging alliances with tech giants like Microsoft as it prepares for war with Amazon
• CVS Health just revealed a key piece of its plan to change how Americans get healthcare
• We got 6 big predictions about how Amazon could disrupt healthcare from execs in the tech giant's backyard
• The hospital in Amazon's backyard has a plan to disrupt itself before being disrupted by big tech companies