The federal government should use the tools it has at its disposal to regulate the nation’s spiraling insulin costs, concluded a new bipartisan Congressional Diabetes Caucus report.
U.S. Rep. Tom Reed (R-NY), a caucus co-chairman, announced release of the Nov. 1 report following a year-long investigation, according to his staff, that involved discussions with patients, insulin manufacturers, health care providers, health insurers, pharmacies, wholesalers, and pharmacy benefit managers.
“We care about the 7.5 million Americans who rely on insulin to manage their blood sugar levels and prevent debilitating complications every day,” said Rep. Reed and U.S. Rep. Diana DeGette (D-CO), also a caucus co-chair.
Average insulin prices have nearly doubled since 2012, and many patients are also facing high prices due to steep deductibles, coinsurance and formulary exclusions, according to the 22-page report, Insulin: A lifesaving drug too often out of reach.
“Many cannot live without it, but countless patients struggle to afford it,” the lawmakers said last week. “As their out-of-pocket costs continue to rise, the current system is unfairly putting insulin out of reach – placing millions of lives at risk.”
In developing their report, Reps. Reed and DeGette found that, in comparison to the traditional prescription drug market, the complicated insulin drug market is impacted by upward price pressures, while few downward market forces exist to maintain insulin prices.
In the United States, only three companies make insulin while just three large wholesalers control about 85 percent of the drug distribution market.
“The insulin supply chain is composed of two interrelated pathways, the delivery of insulin from manufacturers to patients and the flow of payments for insulin throughout the supply and delivery chain,” according to the report. “These pathways are not direct. Instead, wholesalers, pharmacists, providers, insurers, and pharmacy benefit managers serve as intermediaries.”
In their report, the representatives make 11 policy recommendations, such as actions toward increasing price transparency, spurring market competition, changing formulary usage, and addressing patent reforms.
For example, to combat upward price pressures, the lawmakers recommend that the development and use of value-based contracts between insulin makers and PBMs be encouraged. “ The implementation of these contracts could eliminate current volume-based incentives by tying payments to successful patient outcomes,” according to the report.
And to change competitive market forces, one of the recommendations in the report is to allow generic manufacturers to produce older, off-patent insulin formulations.
“As insulin manufacturers are awarded new patents, they often stop manufacturing older forms of insulin products,” according to the report. “Allowing generic manufacturers to produce these older formulations, as long as they are safe, could expedite the development of a robust and competitive insulin market.”
The lawmakers also noted that out-of-pocket expenses should be capped for prescription drugs that are needed for chronic conditions.