Senate Hearing, ADA, Address Insulin Prices for Diabetes Patients

Miriam E. Tucker

May 09, 2018

The American Diabetes Association (ADA) has published a new white paper addressing the high price of insulin that includes recommendations for health care providers to help minimize patients' out-of-pocket costs. 

Entitled Insulin Access and Affordability Working Group: Conclusions and Recommendations, the paper was published online May 8 in Diabetes Care by the working group, which was chaired by William T. Cefalu, MD, ADA Chief Scientific, Medical, and Mission Officer.

The release of the paper was timed to coincide with a hearing by the US Senate Special Committee on Aging, entitled Insulin Access and Affordability: The Rising Costs of Treatment.

In the paper, Cefalu and colleagues write, "The average list price of insulin has skyrocketed in recent years, nearly tripling between 2002 and 2013. The reasons for this increase are not entirely clear but are due in part to the complexity of drug pricing in general and of insulin pricing in particular."

About 7.4 million Americans with diabetes take insulin, including all patients with type 1 diabetes and roughly a quarter of those with type 2 diabetes.

The ADA advises that physicians discuss the advantages, disadvantages, and financial implications of the various types of insulin preparations with patients, and prescribe "the lowest-price insulin required to effectively and safely achieve treatment goals," which may include using human insulin (ie, NPH and Regular rather than analogs) "in appropriately selected patients."

In addition, ADA advises that healthcare providers be mindful of how the rising price of insulin may adversely affect treatment adherence and "be trained to appropriately prescribe all forms of insulin preparations based on evidence-based medicine."

Drawing on input from numerous stakeholders, the document also calls for transparency throughout the insulin supply chain and makes additional recommendations aimed at insulin manufacturers, pharmacies, health plans, pharmacy benefit managers (PBMs), advocacy organizations, and patients. 

And the ADA says it will soon release a follow-up paper with more specific public policy recommendations on lowering out-of-pocket costs for people with diabetes.

Senate Panel Examines Insulin Pricing, Patients Suffering

Among those testifying before the Senate panel were Cefalu, Jeremy A. Greene, MD, PhD, Professor of Medicine and the History of Medicine at Johns Hopkins University, Baltimore, Maryland, and Paul Grant, whose child has type 1 diabetes.   

In her opening remarks, Senate committee chair Susan Collins (R-Maine), who is also the founder (in 1997) and co-chair of the Senate Diabetes Caucus, noted, "The cost of insulin has soared in recent years. In 2013, more was spent on insulin than on all other diabetes medications combined."

The price for a vial of Humalog increased from $21 in 1996 to $275 in 2017, while out-of-pocket costs rose by 10% for Medicare Part D beneficiaries between 2006 and 2013, Collins said, adding, "While the prescription drug market, and the insulin market specifically, is opaque to virtually everyone involved, one fact is clear: patients are not getting the best deal."

Indeed, she said, members of Congress have heard stories of people skipping or rationing their insulin doses, seeking insulin from other countries — Canada in particular among Maine residents — or resorting to the black market or crowdfunding from the Internet.

"These measures can result in major risks that can compromise health and even life," she said.

During his testimony, Cefalu said, "As the leading organization whose mission is to prevent and cure diabetes and to improve the lives of all people affected by diabetes, the ADA believes that no individual in need of insulin should ever go without it due to prohibitive costs."

Greene, a practicing internist in an inner-city community health center and historian who has written on the topic of insulin pricing, told the Senate panel, "No single issue exposes the tragedy and absurdity of our inability to provide 20th-century cures to patients in the 21st century as does the increasing unaffordability of insulin for Americans living with diabetes today."

No Generic Insulins, Not Enough Manufacturers to Drive Down Prices

Greene pointed out that there are no generic insulins in the United States, and that all of the currently available preparations, including the recently available "follow-on" insulins (called biosimilars in other countries), come from just three manufacturers, Eli Lilly, Novo Nordisk, and Sanofi, who control 99% of the nearly $27 billion global insulin market by volume.

At the same time, "We know from pharmacoeconomic analysis that you don’t really see true competition driving down drug prices in a significant way until you have four or more manufacturers in the market," Greene told the Senate panel.

He noted that the two follow-on insulins approved by the US Food and Drug Administration (FDA) are Eli Lilly's Basaglar, a copycat version of Sanofi's long-acting insulin glargine, and Admelog, Sanofi Aventis's copy of Lilly's short-acting Humalog.

Both of the follow-ons are priced only slightly below the brand names, by about $50 a vial. "It doesn't bring it down to a reasonable rate," said Greene.

"Multiple Opaque Transactions Between and Among...Stakeholders"

The ADA document details the complex interactions among the insulin manufacturers, wholesalers, PBMs, pharmacies, health plans, and employers involved in the insulin supply chain, as well as the distribution and payment systems amongst those stakeholders.

"With this system, there is no one agreed-upon price for any insulin formulation. The price ultimately paid by the person with diabetes at the point of sale results from the prices, rebates, and fees negotiated," Cefalu and colleagues write. 

And, they say, the lack of transparency about the process means that "it is unclear how the dollars flow and how much each intermediary profits."

The paper levels much of the blame at PBMs, the third-party administrators of prescription drug programs for both private and public health plans.

Interactions, including discounts and rebates negotiated between PBMs and both manufacturers and pharmacies are kept confidential, as are formulary decisions, the ADA says, noting "PBMs have substantial market power."

What Should Be Done to Solve the Pricing Problem, and By Who?

The ADA recommends that list prices for insulins should more closely reflect the net price, and that overall the system relies less on rebates, discounts, and fees based on list price. Rebates, they say, should be used by PBMs and payers to lower costs of insulin at the point of sale for people with diabetes.

Moreover, formularies should include a full range of insulin preparations, including human and analog insulins, in the lowest cost-sharing tier.   

At the same time, they say, innovation in developing new insulins should be encouraged and the FDA should streamline the process of bringing more lower-cost insulin products to the US market.

But endocrinologist Kasia Lipska, MD, Yale University, New Haven, Connecticut, whose research on insulin pricing was cited in the ADA white paper, told Medscape Medical News that  manufacturers also need to step up.

"The ADA white paper focuses on the lack of transparency in the entire insulin supply chain — this is a valid point — but I think this lets industry off the hook. There should be a stronger call for manufacturers to lower prices to make insulin affordable."

Greene, in his testimony, echoed the call for transparency but said that Congress is the only entity that can ensure it happens.

"Preserving access to affordable insulin is not a Democratic or Republican issue....Only Congress has the power to follow all the steps from production to consumption and understand where exactly this market is being distorted." 

Senator Collins vowed to do just that. "I want to deconstruct that complicated web of transactions to figure out who is making how much money and why aren't discounts that are negotiated with manufacturers reaching the patient....It's astonishing that for a drug approaching a hundred years old and that is serving millions of Americans that we don't see a proliferation of manufacturers." 

And to Grant, a contract company employee with a high-deductible health plan who testified that the 90-day cost of his 13-year-old son's insulin jumped from $450 in 2017 to more than $900 in 2018, Collins said, "We want to keep him healthy, but we also don't want you to go broke in doing so. I'm committed to trying to get to the bottom of this."

Cefalu is an ADA employee, which receives support from several diabetes product manufacturers. Greene has received grants from the National Science Foundation and National Library of Medicine. Disclosures for the other Working Group members are listed in the paper.

Diabetes Care. Published online May 8, 2018. Full text

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