New Year, New Administration: What’s Coming For US Healthcare Policy
Editor’s Note: Directly after the inauguration, a flurry of misinformation about insulin pricing changes made its way around the internet; the policy in question is specifically related to a federally-funded health clinic program. More information can be found here.
New governmental administrations bring policy changes. With the incoming presidential administration combined with a Democratic leaning Congress, it is likely we will see notable and impactful movement in healthcare policy and drug pricing in the coming years. It is safe to expect a return of federal healthcare policy debates, as well as actionable change around drug pricing and transparency that, while talked about in the 116th Congress, did not come to fruition. So what exactly can we expect?
New Health & Human Services leadership
The incoming Health and Human Services team is comprised of a team of seasoned public health professionals who have previously worked in federal healthcare policy, state-run health programs like Medicaid and Supplemental Nutrition Assistance Program (SNAP), addressing health inequities and rectifying systemic discrimination, building behavioral health programs, bolstering child and adolescent health support and robust infectious disease mitigation and management, in addition to work specifically around LGBTQ+ health and more. Appointments to this team reflect the incoming Biden administration’s health care focuses.
Big swings in federal healthcare policy
While imperfect and needing continued reform, the Obama administration’s Affordable Care Act—which was under threat for much of the Trump administration—will become a renewed focus for protection under the Biden administration. Over the last several years, court cases have threatened protections for people with pre-existing conditions, including diabetes. Moving forward, those protections will receive more steadfast support, while Congress also works to make the ACA work for more Americans.
Separate and in addition to access policy enacted through the ACA, the Biden administration ran on a message of looking to introduce a federal public healthcare option, to exist alongside current private healthcare options. While it is unclear exactly what this will look like, here’s why this is particularly important for people living with diabetes—because the US does not have an overarching federal healthcare plan (Medicare is limited to certain groups, primarily around older age, while Medicaid is run on a state-by-state basis), we are unable to federally negotiate drug prices and reimbursement rates or create country-wide standards of care.
Additionally, the Diabetes Self Management Training Act, which stalled out in 2019, may be revived, bringing a renewed focus to the importance of diabetes education, particularly for historically underserved populations covered by Medicare.
With the appointment of Dr. Marcella Nunez-Smith as the COVID-19 Equity Task Force Chair, we expect and hope that issues of healthcare inequities, brought about both by long-standing systemic racism and poor access infrastructure, will be a focus not just regarding COVID-19, but also alongside all healthcare issues, including diabetes of all types.
The circus of drug pricing and regulatory reform
In January 2021, Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Oregon), leaders of the Senate Finance Committee, issued a 90-page report on the rising cost of insulin, placing blame on pharmacy benefit managers (PBMs) —which act as brokers between drug manufacturers, insurance companies and pharmacies—s well as insulin manufacturers for rapid price increases. This tees up expected broad drug pricing reform, particularly aimed at PBMs and the large percentage of list prices they and health insurance companies receive in compensation for brokering drugs’ placements on health insurance formularies and in pharmacies, also known as rebates.
While federal insulin price cap legislation may be an eventual push, price caps placed at the end of a drug’s pricing journey do not address the source of why list prices have gotten so high in the first place—lack of federal drug pricing regulation and next-to-no transparency in PBM contracts chief among the culprits. Price caps, even the ones happening on a state level, also do not help everyone as they are currently written. All current state price caps only apply to those with private state health insurance or state Marketplace plans. There are loopholes for companies that offer employer-based health insurance across state lines or for those who are self-funded.
This leaves rebate reform as the key place where shorter-term and far more impactful to out-of-pocket patient costs change can happen. The Insulin Price Reduction Act (IPRA), which was introduced as companion bills in July 2019 in both House and Senate but did not see much movement, may be reintroduced in the 117th Congress. The bill is aimed at preventing PBMs and health insurance plans from receiving rebates or discounts for insulins. It drops the list price of most types of insulin back to their 2006 list price, and requires that insulin not be subject to a health insurance deductible. This is another bill that is not ideal and is more of a bandaid solution than overarching reform, but it could create shorter term change in insulin prices (although primarily for insulins that were available prior to 2006). Changes are expected to be made before reintroduction of this bill.
Overarching rebate reform would have to be tackled across Congress and is more likely to happen across all drug types than just for insulin, which is better for all Americans. However, there is likely to be a big focus on insulin and other blood glucose lowering drugs, given the national attention on insulin pricing and the high amount of Medicare funding (one in three Medicare dollars) spent on diabetes. Rebates typically account for 30-50 percent, sometimes up to 70 percent, of the list price of insulin, which leaves the greatest burden on people with diabetes who do not have insurance or have a high deductible health plan for which they must pay the full list price until their deductible is met.
Of course, we know that it’s not just insulin and other diabetes medications that require attention. Early in the new administration, there will be hearings to discuss changing qualifications for continuous glucose monitor (CGM) eligibility for Medicare beneficiaries, hopefully expanding access opportunities for those who have type 2 diabetes, regardless of diabetes medication regimens.
Continued action on state-based insulin price cap bills
Following the success of 10 states introducing various forms of insulin price cap and emergency insulin access laws in 2020, we are going to see a lot more on a state level specific to diabetes than we will see immediately on a federal level. Pre-filings and introductions are happening right now in California, Florida, Kentucky, Mississippi, Missouri, Oklahoma and Texas. The price caps range from $30 to $100 per month, regardless of the amount prescribed.
If passed, this would mean that 17 states have insulin price cap bills but, as stated previously, these do not address the root cause of high list prices for insulin, and do not apply to everyone, particularly the uninsured.
Missouri has a insulin rebate pass-through bill introduced (House Bill No. 344) for insulin, essentially aimed at removing any cost added by the rebate system from the out of pocket cost at the counter (i.e., up to 70 percent of the current list price). New York has introduced their version of an emergency insulin program bill (A00194), aimed at addressing emergency access to analog insulins and related supplies.
How individual advocates can help
Substantial healthcare policy change takes the voice of many, and individual advocates make a resounding and impactful difference. If you are looking to get involved with diabetes access advocacy, start here. Reach out and get to know your state’s congressional representatives in the House and Senate. Make sure they know your personal experience and how issues of healthcare, drug pricing and access impact you.
People who take insulin require consistently affordable and predictable sources of insulin at all times. If you or a loved one are struggling to afford or access insulin, you can build custom plans based on your personal circumstances through our tool, GetInsulin.org. To learn more about the insulin access crisis in the United States, click here.