Senate Bill Aims to Cut Price of Insulin by 75%

7/22/19
WRITTEN BY: Todd Boudreaux
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On Monday, July 22, a bipartisan group of U.S. Senators introduced legislation that could significantly lower the price of insulin if passed. The Insulin Price Reduction Act was announced by Sen. Jeanne Shaheen (D-NH) and is co-sponsored by Senators Collins (R-ME), Carper (D-DE) and Cramer (R-ND). Collins and Shaheen are co-chairs of the Senate Diabetes Caucus.

The bill takes direct aim at the complex system of insulin pricing in the U.S., with an aim to cut list prices by targeting and restricting the rebates that go to pharmacy benefit managers (PBMs).

Insulin manufacturers typically pay a percentage of the list price back to PBMs in the form of a rebate. Effectively, the PBM gets a deep discount on drugs in return for making them available through insurance. This sets up a reverse incentive for manufacturers to offer bigger rebates to PBMs in order to have their product put on an insurance plan’s formulary. Competition in the insulin market has historically led to higher list prices because higher list prices mean higher rebates to PBMs.

The Insulin Price Reduction Act would create a new pricing model where the use of rebates will be restricted for any insulin for which the manufacturer has reduced the current list price to no higher than the price of that same product in 2006. The rebate restrictions are designed to incentivize this change in pricing by manufacturers. To continue to qualify for the restrictions, the list price of insulin could not be increased by more than the increase in medical inflation for that year.

The rebate restrictions would apply to Medicare Part D as well as the private insurance market. For the most popular insulins, patients would see a 75% reduction in prices from what is expected in 2020.

An equally important measure of the bill states that private insurance plans would also be required to waive the deductible for insulin products that meet the above criteria. This means that patients with high deductible health plans would be able to obtain insulin at a standard copay, rather than paying the full list price until their deductible is hit.

“Americans across the country are literally dying in desperate attempts to ration their insulin because of the explosive increases in insulin prices that are putting this life-saving medication out of reach. This is a health crisis that demands the full attention of this country and this Congress,” said Senator Shaheen. “Rebates have been a significant factor in what’s driving insulin prices higher, but we know we cannot simply restrict rebates with no strings attached for big pharma – there needs to be accountability.”

The bill has been endorsed by both JDRF and the American Diabetes Association (ADA).

“No one should suffer or die because they cannot access insulin. We are very grateful for Senators Shaheen, Collins, Carper, and Cramer for introducing this important piece of legislation, which would treat insulin like the life-saving drug that it is,” said JDRF’s CEO Aaron Kowalski, PhD. “This bill would take several significant steps to make insulin affordable. Prescription drug rebates currently make up about 70 percent of the list price of insulin, and JDRF supports eliminating their use and requiring insulin manufacturers to drop their prices, as this bill would do.”

The repercussions of high insulin prices can be deadly — There have been a troubling number of stories lately regarding deaths and hardship related to insulin rationing. Earlier this month, the family of 21-year-old Jesimya David Scherer-Radcliff shared that he died as a result of rationing his insulin. Similarly, 24-year-old Jada Louis passed away in June after a week-long hospital visit to treat DKA (diabetic ketoacidosis), brought on by her skipping insulin doses. In 2017, Alec Smith, Antavia Lee-Worsham, and Justin Lutgen all died after they could no longer afford insulin and began rationing.

This bill is the latest in a string of proposed legislative fixes to the insulin access crisis in America. Just last week, the U.S. Treasury issued new guidance which could classify insulin as a preventative treatment and thus exempt from the deductible phase in some high deductible insurance plans. And earlier this month legislation was introduced to speed up the pathway for a generic insulin to come to market.

 


If you or anyone you know is having trouble affording insulin, click here.


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Todd Boudreaux

Todd was diagnosed with Type 1 diabetes in 2000, and has been unofficially advocating for T1D ever since. Before joining the team at Beyond Type 1, Todd wrote and produced television shows for Discovery Channel, Travel Channel and Animal Planet. When he’s not in the office, you can usually find him at a baseball game, traveling or drawing on his Etch A Sketch. You can also follow him on Instagram.