WASHINGTON — Two key senators unveiled details of a bipartisan plan to lower the cost of insulin, a life-saving drug that some Americans have struggled to afford as prices have skyrocketed in recent years.
New Hampshire Democrat Sens. Gene Shaheen and Maine Republican Susan Collins introduced the measure in June after months of work to craft a deal. It builds on a law first introduced in 2019 that would cap monthly co-payments for privately insured consumers and limit insulin rebates in an effort to reel in drug list prices.
“Too many Americans are forced to ration their insulin, forced to decide what else to pay for, which puts their health and lives at risk. It’s time to change,” Shaheen announced the bill at a Senate press conference. “We’re calling on Senate leadership to move as quickly as possible on this bill.”
Shaheen and Collins said they are in talks with colleagues to try to get broad support and hope to see the bill on the Senate floor for a vote after the July 4 recess.
Central to his push is Senate Majority Leader Chuck Schumer, DNY, who has vowed to try to advance the issue.
“No American should have to go broke to access the medication they need to stay alive,” Schumer wrote on Twitter. “We will vote for this important bill.”
But with Schumer’s support and bipartisan co-operation, the bill could face a tough road in the Senate.
Shaheen and Collins need unanimous support from Democrats and at least nine Republicans to advance the legislation — making any legislation difficult to reach in the evenly divided Senate. The bilateral firearms package, however, is a recent example.
Collins said he’s been talking to colleagues to try to get support. Many have heard from constituents who are having trouble paying for their insulin.
“I would suggest that this is an issue that crosses partisan lines. If you have diabetes, the disease doesn’t care if you’re a Democrat or a Republican,” Collins told reporters at a June press conference.
The US House passed legislation in March that would cap insulin co-payments at $35 for Americans with private health insurance. A dozen Republicans supported the bill, but a majority of House Republicans voted against it. The Senate proposal is more broad and likely to generate more opposition.
Earlier this year, Schumer placed the House bill as a placeholder on the Senate calendar. A procedural move allows an issue to come to the Senate floor without going through the full committee process first.
Cost of insulin
Insulin is a life-saving drug for people with diabetes, but some people find it difficult to get it. According to the American Diabetes Association, the cost of the four most popular types of insulin has tripled in the past decade.
Insulin prices have risen beyond inflation rates — more so in the United States than in the rest of the world. Americans pay an average of 10 times more for insulin than people in other developed countries, according to a federal government analysis.
For people with type 1 diabetes, their bodies naturally stop producing insulin and they need daily medication to survive. But according to the ADA, 1 in 4 Americans with diabetes ratio their insulin. Skipping doses can cause serious short-term or long-term health consequences.
The leaders of the three major companies that make insulin – Eli Lilly, Sanofi and Novo Nordisk – have said they are not to blame for the rising prices. He told lawmakers at a congressional hearing in 2019 that insulin prices cannot be lowered because of the way health insurance companies and pharmacy benefit managers operate.
Secured rebate systems create a gap between the manufacturer’s list price and the over-the-counter price of insulin to the consumer. Pharmacy benefit managers negotiate discounts and coupons for their members, but those savings aren’t always available to shoppers, leaving the uninsured to pay full list price.
Representatives for the drugmaker told States Newsroom they were still reviewing the Senate proposal.
“We have received a working draft and will review it this week,” said Antoinette Forbes, a spokeswoman for Eli Lilly. “However, we are encouraged by the patient-centered language that it is a step in the right direction.”
As such, a Sanofi communications staffer said the company is still reviewing the proposed legislation and cannot yet talk about its specifics. In the past, the company has supported limits on monthly co-payments and legislation requiring discounts to be shared with patients at the pharmacy counter.
Sanofi recently announced a new program that will hit the federal government to lower costs for some consumers.
The Paris-based company said on June 29 that it would cut the price of its insulin from $99 to $35 a month for uninsured US residents. The savings, effective July 1, go to uninsured people who have a savings card with an insulin valyou Savings program.
Both co-pays and list prices
The Senate bill, called Life Saving Insulin Now, or the Improving Needed Safeguards for Insulin Users Act, aims to address patient co-payments and list prices.
It caps monthly co-payments for insulin at $35 a month or 25 percent of the list price — whichever is lower. This affects those in commercial health care plans and Medicare Part D.
That language Georgia Democratic Sen. Similar to the legislation that Raphael Warnock has been pushing for all year. His bill has 35 Democratic cosponsors.
According to an analysis of insurance claims data by the Peterson Center on Healthcare and the Kaiser Family Foundation, Warnock’s language offers financial relief to at least 1 in 5 insulin users with various types of private health insurance.
Shaheen and Collins added additional language aimed at lowering the overall cost of insulin, not just how much insured patients must pay for it.
His proposal would prevent insurance plans and pharmacy benefit managers from collecting rebates on insulin until manufacturers agree to cap their prices at the 2021 “net price,” the level consumers pay after the rebate.
The language is intended to encourage drugmakers to lower prices and take middleman rebates out of the equation — which can drive up drug costs at the point of sale.
The price of insulin over the counter is a combination of what goes to the manufacturer and the pharmacy manager – it also includes coupons and discounts. Currently, manufacturers say they are stuck in a system where pharmacy benefit managers favor products with high list prices and deep discount coupons that help attract clients. But that system puts those who can’t afford concessions into trouble.
The difference is extreme for insulin. In 2013, average rebates for long-acting insulin were about 2% to 4%. But six years later, the rebates were about 80%, according to a Senate Finance Committee investigation.
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The Senate proposal already has the support of some major diabetes advocacy groups, including the American Diabetes Association and the Juvenile Diabetes Research Foundation.
“Right now we have a broken system where people with diabetes can pay $300 or more for a bottle of insulin while others in the health care system get discounts,” said Cynthia Rice, the foundation’s chief mission strategy officer. “The Insulin Act Takes Important Steps for the Diabetes Community.”
“This legislation and leadership is a more comprehensive solution that addresses the multiple factors that contribute to insulin inefficiency,” said ADA Chief Scientist Robert Gabbe. This law is necessary for people with diabetes across the country.
Check for mediation
Pharmacy benefit managers are an invisible part of the drug pricing system with enormous influence. Intermediaries negotiate discounts and charges with drug manufacturers and create a list of drugs covered by insurance and reimburse pharmacies. Large pharmacy benefits managers are vertically integrated with large health insurance companies.
Their role in the drug pricing system is facing increased scrutiny in the federal government — in Senate insulin legislation and elsewhere.
The Federal Trade Commission has launched an investigation into the industry. Republican members of the House Education and Labor Committee recently asked the Government Accountability Office to study PBMs and their role in the supply chain.
And the Senate Commerce Committee recently approved legislation from Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Wash., that would give the FTC greater oversight powers over PBMs and require reporting on pricing and pharmacy charges.
The Pharmaceutical Care Management Association, a group that represents PBMs, opposes that legislation. The group says PBMs play an important role in lowering drug costs and holding drug manufacturers accountable for raising drug prices.
“While only drug manufacturers set prices, PBMs negotiate discounts to obtain lower net costs,” Christine Bass, chief policy and external affairs officer for the Pharmaceutical Care Management Association, said in a statement to the FTC.