The bipartisan Insulin Price Reduction Act was introduced by Senators from the Senate Diabetes Caucus last month. The bill takes aim at severing the financial relationship between drugmakers and pharmacy benefit managers (PBMs), which is keeping insulin costs grossly inflated.
The bill was written and introduced by Senators Jeanne Shaheen (D-NH), Susan Collins (R-ME), Tom Carper (D-DE), and Kevin Cramer (R-ND) to take direct action against rising insulin costs. In the past two decades, insulin prices have risen over 1,000 percent. The average cost of a single vial of insulin is now $300, though it costs less than $10 to produce and distribute.
If the bill passes, health policy experts would calculate the anticipated cost of insulin in 2020, and then reduce it by 75 percent to determine new insulin costs. The bill would also offer incentives to drugmakers to reduce insulin prices to match what they were in 2006, which was between $50 to $100, depending on the brand of insulin. Since 2006, insulin prices have quadrupled in the United States.
The bill would also make insulin exempt from insurance deductibles. This includes Americans covered by Medicare Part D plans as well as private insurance plans. Even diabetic patients with high-deductible plans would not be subject to deductibles, meaning insurance would pick up the bill immediately.
PBMs act as middlemen between drugmakers and insurers. When PBMs negotiate the price of an expensive, brand-name prescription drug and guarantee it will be covered by a drug plan, the PBM then receives large amounts of money from the drugmaker in the form of rebates or kickbacks.
This negotiation allegedly lowers the cost of the brand-name drug and makes it more likely for a consumer to select that drug as opposed to a generic version or one offered by a competitor. However, it’s a controversial aspect of the American prescription drug industry. Higher list prices have historically led to price hikes because higher list prices mean higher rebates paid to PBMs. This incentivizes PBMs and drugmakers to keep prices (and profits) high.
Senator Shaheen has said of the relationship between insulin prices and PBM kickbacks, “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… 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.”
Endorsements at the state and federal levels
State lawmakers are excited to see this legislation move forward, though many say it’s long overdue.
Colorado State Representative Dylan Roberts spearheaded the nation’s first bill to combat soaring insulin prices. Earlier this year, he passed a bill which caps insulin copays at $100 per month, regardless of your insurance plan. The bill also authorized the Colorado Attorney General to launch an investigation into the price gouging of this life-saving drug.
Of the bill, Roberts said, “I think the policy proposed in the Insulin Price Reduction Act is a great start. Anything to lower the list price of insulin is a worthy cause because it is that list price that controls the overall affordability of insulin as it works through the supply chain to the American who needs it to survive.”
Getting help with insulin costs
If you are in immediate need of insulin, go to the emergency room.
If you need help paying your monthly bill, look into these three insulin assistance programs from some of the country’s biggest drugmakers.
Beyond Type 1, a nonprofit organization that focuses on education and advocacy for those with type 1 diabetes, also has several strategies to find more affordable insulin.