On Monday, July 22, 2019, a group of U.S. Senators from both sides of the political aisle introduced a new bill that proposes to lower the cost of insulin – drastically.
U.S. Senator Jeanne Shaheen (D-NH) co-chairs the Senate Diabetes Caucus and united with fellow Senators Susan Collins (R-ME), Tom Carper (D-DE) and Kevin Cramer (R-ND). The team of lawmakers introduced their “Insulin Price Reduction Act.” to the first session of the 116th U.S. Congress to convene on Capitol Hill in Washington, D.C.
“The cost of prescription drugs is one of the number one issues facing Granite Staters and Americans throughout the nation – and insulin is a prime example of what’s wrong with prescription prices. 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,” stated Sen. Shaheen.
The bill would lower prices up to 75 cents on the dollar, based on anticipated 2020 levels, according to lead sponsor Shaheen. Sen. Carper explained the harsh economic reality facing many U.S. diabetics and their families:
“These Americans and their families have seen the sticker price of insulin skyrocket, forcing impossible choices between buying critical medication and putting food on the table. For these millions of Americans, we must do better. Drug prices must come down and become more transparent.”
If passed, this new law would benefit the more than 30 million Americans living with diabetes who need regular insulin injections to stay healthy. This ongoing healthcare expense would be slashed, resulting in significant savings to patients who currently ration their doses because they can’t afford to buy enough supplies at the proper doctor-recommended amounts.
The bill prevents insurers and pharmacy benefit managers (PBMs) from colluding in rebate deals with insulin manufacturers. List prices for insulin for 2020 will align with 2006 rates. Future price increases would not be allowed to exceed medical inflation for that year:
“Shaheen’s legislation would create a new insulin pricing model where the use of rebates would be restricted for any insulin product for which the manufacturer reduces the list price back to a level no higher than the price of the product in 2006. For the most popular insulins, this would result in more than a 75% decrease in prices compared to what we can expect to see in 2020.”
The rebate limits would apply to private insurance plans and Medicare Part D plans.
The new bill would force private insurance plans to waive the deductible for insulin products that met the list price reduction criteria.
The problem is that each year Big Pharma makers of insulin and other drugs set list prices for their products. Manufacturers then bargain for financial rebates to pay insurers and PBMs so their insulin is covered by insurance.
“The American Diabetes Association has found that as PBMs have increased rebates as a percentage of the list price, the heightened rebates have helped drive increases in list prices for insulin. The higher list prices for insulin have damaging consequences for uninsured patients and individuals in high-deductible plans, who frequently have to pay the full list price of the insulin at the pharmacy counter,” according to Shaheen’s official website.
It is estimated that Medicare enrollee out-of-pocket costs for insulin have risen more than four times since 2007. The price of a 40-day supply of insulin rose from $344 in 2012 to $666 by 2016, researchers discovered.
Sen. Sheehan also pointed out that rebates need to be formally tracked and counted because they “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. That’s why this bill is so important: it reduces costs and includes mechanisms to hold health care middlemen and insulin manufacturers responsible for keeping prices down.”
Sheehan appealed to Senate Majority Leader Mitch McConnell to “work with us and bring this bill to the floor so we can deliver a bold, bipartisan solution to this problem impacting millions of Americans.”
The price of insulin has shot up 240 percent since its discovery in 1921 and first successful human treatment (on a boy suffering from severe diabetes) the following year.
“I have heard stories from people across the country who have had to ration or skip doses altogether to make their insulin supply last longer. Some have sought medication online from other countries. These drastic measures can result in major risks that can compromise health and even life,” said Sen. Sheehan.
One St. Louis, Missouri, resident named Terry confirmed the genuine need for a price-regulating law that would cover the needs of diabetics:
“I can speak to the blatantly excessive increase of the cost of insulin which has skyrocketed in recent years. I have a daughter and two grandchildren who depend daily on insulin injections in order to live. My youngest daughter has lived with diabetes since the age of two. She is now in her early thirties. I have seen the price of insulin go from reasonable price to price gouging for a medicine that cannot be skipped briefly, it is a ‘do or die’ situation.”