WASHINGTON, D.C. – Today, U.S. Senator Tom Carper (D-Del.) joined Senators Jeanne Shaheen (D-N.H.), Susan Collins (R-Maine) and Kevin Kramer (R-N.D.) to announce new legislation to combat skyrocketing insulin prices and hold health care middlemen accountable. The Insulin Price Reduction Act would hold pharmacy benefit managers (PBMs), big pharmaceutical companies and insurers accountable for these surging prices by incentivizing reductions in list prices.
Each year, insulin and other drug manufacturers establish list prices for their products. In order to get their insulin covered by insurance, manufacturers then negotiate financial rebates to pay PBMs and insurers. 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. In Medicare alone, enrollee out-of-pocket costs for insulin have more than quadrupled since 2007. Researchers also estimate that the price of a 40-day supply of insulin rose from $344 in 2012 to $666 by 2016.
The 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 percent decrease in prices compared to what we can expect to see in 2020. These rebate restrictions would apply in Medicare Part D and the private insurance market. Private insurance plans would also be required to waive the deductible for insulin products that met the list price reduction criteria. To keep these rebate exemptions and deductible waivers in future years, the manufacturer would have to limit any list price increase to no more than medical inflation.
“For the more than 30 million Americans living with diabetes, insulin is lifesaving. But much too often, this crucial drug is unaffordable for those who need it most. 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,” said Senator Carper. “For these millions of Americans, including over 100,000 Delawareans, we must do better. Drug prices must come down and become more transparent. Today, I’m proud to join my colleagues in introducing the Insulin Price Reduction Act, a common sense, bipartisan first step that will help to make lower insulin prices a reality for patients and taxpayers.”
“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,” 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. 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. This is an issue that bridges the divide between Democrats and Republicans, so I urge Leader 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.”
“Although insulin was discovered nearly a century ago, the cost of this lifesaving medication has increased exponentially. In the past decade alone, the price of insulin has risen by more than 240 percent. 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 Senator Collins, the Chairman of the Senate Aging Committee. “As the co-chairs of the Senate Diabetes Caucus, Senator Shaheen and I are committed to making insulin more affordable, and this bipartisan bill would help do exactly that.”
“Insulin is a life-saving drug for those with diabetes, but the price continues escalating to unaffordable lengths,” said Senator Cramer. “Our legislation incentivizes lower list prices by tackling rebates and deductibles, which could significantly change the insulin pricing model and finally ease the sticker shock North Dakotans and Americans experience every month.”
The bill has also been endorsed by 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, making it more affordable year around,”said Aaron J. Kowalski, PhD, JDRF President and CEO.
“The American Diabetes Association applauds Senators Shaheen, Collins, Cramer and Carper for introducing this important bill which seeks to lower the cost of insulin,” said LaShawn McIver, senior vice president of Government Affairs and Advocacy of the American Diabetes Association. “For millions of Americans living with diabetes, insulin is a matter of life and death, and the consequences for people who cannot afford their insulin can be devastating. This legislation is critically important in the fight to lower insulin costs. The ADA supports the Insulin Price Reduction Act and urges Congress to pass this bill.”