Insulin Copay Cap Bills: An Overview
Editor’s Note: This article originally appeared on Diabetes Daily and has been republished with permission.
Problems of access
America has a unique problem: prescription drug prices are too expensive for many people. In 2018 alone, 1 in 5 Americans (or 37 million non-elderly adults) went without a prescription drug due to cost. One of the most egregious examples of the high cost of prescription drugs is the rising cost of insulin in the United States. There are over 34 million Americans with diabetes, and at least 8 million are dependent on insulin to live. The list price of insulin has nearly tripled since 2002 and the average price of the drug has increased by 64% since 2014 alone. Most tellingly, a pivotal Yale study recently reported that as many as 1 in 4 people with diabetes have rationed their insulin due to cost. So, what are lawmakers doing about the problem?
Insulin copayment caps have become a wildly popular idea by state lawmakers to curb the price of insulin for some insured patients in their states. Notably, Colorado was the first state in the nation to pass such legislation, making national news last May. The bill, which caps monthly copayments (for some insured patients) at $100, went into effect on January 1, 2020.
The bill’s main sponsor, Representative Dylan Roberts, said, “Colorado is leading the way with this measure, but this is just a first step. We won’t stop until all the pharmaceutical companies and drug middlemen start taking more accountability and stop gouging patients with their high costs.”
Other states have followed suit. The Governor of Illinois signed into law similar legislation this past January (although the law doesn’t take effect until January 1, 2021), and there are currently similar bills pending in 36 other states.
A step in the right direction
This is great news for many people with diabetes. The average cost of a vial of insulin in America is over $300, and people with insulin-dependent diabetes often require multiple types and vials of insulin per month, which can drive up the price (to live!) into the thousands. Capping copayments, or essentially “carving” out a $100 copayment (especially for people on high-deductible health plans who are paying the full list price of insulin until they hit their deductible, which can sometimes be in the high-thousands) can save people thousands of dollars and will undoubtedly help save lives.
Some people may think this solves the insulin pricing crisis, but it doesn’t. These bills are a great start to bring attention to the exorbitant cost of prescription insulin, but there are many people who don’t qualify under these new laws. State legislatures only have jurisdiction over state-regulated health plans, and thus cannot determine pricing on ERISA plans – or health insurance plans that are fully or partially managed by the federal government, such as Medicare, Medicaid, or the Veteran’s Health Administration. Additionally, any large, private employer plans would not fall under the law. Most importantly, anyone who’s uninsured does not receive protection under this law, and must still pay the full list price of insulin at the pharmacy counter.
For states that have expanded Medicaid, this doesn’t pose as much of a problem, as more people are covered by some sort of insurance (Medicaid copayments are usually set between $1-3). States with robust exchange programs also benefit more under these laws, as by definition these are state-regulated plans that are subject to the copayment caps. But for people who don’t qualify for Medicaid, cannot afford a health exchange plan, and find themselves without insurance, they’re still stuck paying these outrageous prices, which is sometimes a matter of life or death.
And the problem isn’t going away. The Health Care Cost Institute reported that the price of insulin doubled in a span of four years, between 2012 and 2016. According to their report, the average price a patient with Type 1 diabetes paid for insulin in 2012 was $2,864 but that doubled to $5,705 by 2016.
Who is to blame?
Why is the cost for a nearly 100-year-old drug continuing to rise? For one thing, there are no generic competitors, and only three companies manufacture the drug. Secondly, insulin products are protected under patent laws, which allow the manufacturer to sell a product unchallenged in the market before a generic can be introduced. Novo Nordisk, Eli Lily, and Sanofi – the three main insulin manufacturers – have continued to “tweak” their insulin products in order to extend their exclusivity rights and hold onto their patent longer, without facing competition from generics. In fact, Sanofi has filed lawsuits in the past against Merck and Mylan to prevent them from going to market with a generic version of Sanofi’s Lantus insulin. Additionally, our government (unlike most other countries in the world) does not negotiate drug pricing with pharmaceutical companies, and thus there are no regulations on how high pricing can be set.
This national crisis has even gotten the attention of current and former Presidential hopefuls: Mayor Pete Buttegieg, Senator Amy Klobuchar, Senator Elizabeth Warren, Senator Bernie Sanders, Tom Steyer, and even former Vice President Joe Biden have all called out insulin specifically when talking about outrageous drug pricing.
Congress has also started paying closer attention: H.R. 3, the Lower Drug Costs Now Act has been introduced, and would allow for The Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices on certain drugs (including insulin) to lower the costs, among other measures. Co-Chairs of the Congressional Diabetes Caucus, U.S. Representative Diana Degette and Representative Tom Reed, have also introduced the Insulin Price Reduction Act, which, if enacted, would decrease the price of insulin nearly 75% for Americans, to costs equal to those in 2006. These are all great first steps to addressing American’s cries for help, and to help reduce the burden millions of people with diabetes are facing every day.
Any legislation will have its pros and cons, but people with diabetes suffering due to high drug pricing don’t have to suffer in silence any longer. Politicians are taking note and action, and one day I hope we can all declare the crisis solved.
Check out another piece about insulin affordability – The Power in Numbers: Change.org’s Affordable Insulin For All Movement.