US Lawmakers Hone in on PBM Role in Insulin Prices

Kerry Dooley Young

April 03, 2019

US lawmakers are focusing on the role that pharmaceutical middlemen may play in the rising cost of insulin, which is making the critical drug unaffordable for many people with diabetes.

Influential members of Congress from both parties say they will work together to try to put insulin within financial reach of more Americans.

It's estimated that around 7.5 million Americans are taking insulin, including 1.2 million who have type 1 diabetes and require daily insulin. Type 2 diabetes, which affects nearly 30 million Americans according to the American Diabetes Association (ADA), is treated with a variety of other medications but many of those patients may also eventually become dependent on insulin.

In letters released yesterday, leaders of the Senate Finance Committee demanded detailed information from three of the nation's biggest pharmacy benefit managers (PBMs): Cigna's Express Scripts, CVS Health Corp, and UnitedHealth's Optum unit.

The senators want to bring into the light the often unseen mechanisms that let PBMs profit from serving as a go-between on insulin prescriptions between patients and manufacturers.

"Even though insulin has been used to treat diabetes for almost 100 years, its price has continued to increase, putting stress on patients and taxpayers alike," wrote Senate Finance Chairman Charles E. Grassley (R-IA) and Sen. Ron Wyden of Oregon, the committee's ranking Democrat.

The information demanded by Grassley and Wyden will likely frame the debate for an April 9 Senate Finance hearing on PBMs. Senate Finance has also summoned executives from Humana and Prime Therapeutics to appear at the hearing.

And in the House of Representatives yesterday, a hearing with diabetes experts also set the stage for an expected deeper examination of insulin costs later this month.

Prices for commonly prescribed insulins rose over the past two decades from about $20 per vial to over $250 per vial — a more than 700% increase after adjusting for inflation, said the House Energy and Commerce Subcommittee in a background memo for the hearing. 

Spiraling insulin prices reflect poorly on the work of PBMs as negotiators, at least when it comes to serving patients, according to Rep. Earl L. "Buddy" Carter (R-GA), who owns drugstores in his community and describes himself as Congress' only pharmacist.

"Their mission is to keep prescription drug prices low," Carter said at the hearing. "Well, I would ask you, 'How's that working out?' Obviously, it's not working out very well at all."

Call for More Transparency Around PBM Pricing Strategies

Like the Senate Finance Committee, Carter argues for a need for greater information about the rebates paid to PBMs. In January, the Department of Health and Human Services proposed a plan to allow discounts on prescription medicines to flow more directly to patients in the Medicare Part D pharmacy program, while disrupting the flow of rebates to PBMs.

Carter and his Democratic and Republican colleagues want more open access to information about PBMs' rebates, price concessions, and other direct or indirect remuneration in prescription drug plans.

The House Energy and Commerce's Health Subcommittee last month approved a bill to increase transparency in drug pricing that Carter had put forward with Democratic and GOP colleagues. It would provide the Medicare Payment Advisory Commission and the Medicaid and CHIP Payment and Access Commission with more access to data on rebates, a step that could aid Congress with future PBM legislation.

"When you have three PBMs that control almost 80% of the market, I don't think we have enough competition in that area," Carter said. "We need transparency. It's the only way that we're ever going to see exactly how we attack this problem that impacts everyone. It is a nonpartisan problem."

There's deep shared interest among Democrats and Republicans in Congress in addressing drug costs, with insulin a particular cause of concern.

Rep. Diana DeGette (D-CO), chairwoman of the House Energy and Commerce Committee's Oversight and Investigations panel, said she and her GOP counterpart on the panel had planned yesterday's hearing together.

She and Rep. Brett Guthrie of Kentucky, the panel's ranking Republican, had agreed on the selection of witnesses. That's a break from tradition, in which the minority party usually gets to weigh in on only one choice of a witness for a hearing, DeGette said.

DeGette has a notable track record for helping bring both parties together to pass health law. She was a key lawmaker behind the 2016 passage of the 21st Century Cures Act, a law meant to aid biomedical research. DeGette has cited her daughter's type 1 diabetes as one of her reasons for championing that measure.

"We are committed to fixing this," said DeGette at the hearing on insulin prices. "We are committed to a bipartisan solution."

Why Can't CMS Pay for Insulin?

A perhaps more surprising example of bipartisanship at the hearing was a quick endorsement from Rep. Jan Schakowsky, a liberal Democrat from Illinois, for an idea tossed out by Rep. Michael C. Burgess, MD, a conservative Republican from Texas.

Burgess suggested having Medicare and Medicaid pick up the tab for insulin for patients with diabetes. Burgess and Schakowsky spoke of this idea as a potential cost saver for these programs, sparing them from having to pay to treat complications people suffer because of poorly controlled diabetes.

"Why do we even charge for insulin? If someone has got a diagnosis of diabetes, why not just treat it?" Burgess said. "Why would the Centers for Medicare and Medicaid Services [CMS] not just cover that?"

Skipping doses of insulin because of cost puts people at risk for "devastating and sometimes deadly complications," including cardiovascular and kidney disease, blindness, and lower-limb amputations, William T. Cefalu, MD, chief scientific and medical officer of the ADA, told the House panel.

"The amount of money a person pays for insulin is going to have a direct effect on their adherence," Cefalu said in reply to Burgess' suggestion. "Whatever we can do to lower the cost of insulin is going to increase adherence."

Burgess noted that Energy and Commerce has jurisdiction for the Medicare and Medicaid programs. He said he intended to follow up with CMS Administrator Seema Verma on the idea of providing insulin without charging patients in government health plans.

"In a federal program, why don't we just cover it?" Burgess wondered.

"That's a question that I think this committee in Congress needs to ask," replied Cefalu.

Sellers' Market: Patients Skimping on Insulin a Common Occurrence

In his testimony, Cefalu also urged Congress to have the Food and Drug Administration (FDA) further streamline the process for clearing so-called biosimilar insulins.

Prices for these copycat versions of pricier insulin analogs won't drop until there are several potential rivals that can be substituted for the brand-name version, he said.

The FDA has also announced a May 13 public hearing about steps needed to bring more competition to the insulin market. As previously reported by Medscape Medical News, there has been some reluctance on the part of physicians and patients to switch to biosimilars.

Although biosimilar insulins are cheaper than branded insulins, the prices have not yet been low enough to make changing products enticing in some cases.

"While the regulatory transition of insulin products nears, we're cognizant of the fact that it won't be soon enough for the millions of Americans who struggle to pay for their insulin today," FDA Commissioner Scott Gottlieb, MD, said in a statement. "We all need to do our part. A drug that's nearly a century old should not have a list price that increases between 15% to 17% annually."

At the House hearing, Kasia Lipska, MD, MHS, of Yale-New Haven Hospital Center for Outcomes Research and Evaluation, Yale University School of Medicine, New Haven, Connecticut, spoke about her published research that found one in four insulin-treated patients surveyed at the Yale Diabetes Center rationed their insulin because of cost.

Lipska told the House Energy & Commerce Subcommittee on Oversight and Investigations panel these results indicate the phenomenon of people skimping on insulin is common nationwide.

And Rep. Raul Ruiz, MD, (D-CA) told his colleagues on the Energy and Commerce panel about having seen this phenomenon in both his own family and his own practice, as an emergency room physician. Patients who are not yet suffering ill effects or diabetes complications may be unwilling to pay for insulin, putting themselves at risk, he said.

"I've done talks about how this is the silent killer," Ruiz said.

He explained how he has struggled to persuade his uncle, who has diabetes, to take adequate insulin. Ruiz said his uncle rebuffs the advice, saying he'd rather put his money toward buying groceries and filling his gas tank to get to work.

In the ER, Ruiz said he saw people who had fallen into diabetic ketoacidosis and hyperglycemic comas because of missing insulin doses, and he said he has treated people for pain caused by neuropathy and cardiac arrest.

And through his work as a community activist, he has witnessed the struggles of people to come up with the money for insulin. He said he once encountered an elderly woman rummaging through trash. She told him she was looking for aluminum cans, for which she could collect rebates. The money she earned this way would pay for insulin. Ruiz said the woman tried to reassure him about her situation.

"'Don't worry, doctor,' she told me. 'Don't worry. I only take half a dose, so it can last,'" Ruiz recalled.

Ask the Tough Questions: Why Has the Price of Insulin Skyrocketed?

Rep. Nanette Diaz Barragán (D-CA), who also has family members with diabetes, said lawmakers must act quickly to address the forces that are putting insulin beyond the reach of many Americans.

"Something is broken and people look to Congress" to fix it, Barragán said, calling for a hearing with representatives of PBMs and insulin makers as witnesses.

"I want us to ask the tough questions," she said. "We've got to get down to why this is happening. Why is it that [the price of] insulin has skyrocketed?"

Barragán said Congress should also act to assuage public concerns about lawmakers' financial ties to drugmakers, noting that many Americans think Congress has failed to do much on drug prices because of the lobbying influence of drugmakers.

The pharmaceutical industry has been a significant contributor for many years to congressional campaigns of both Democratic and Republican candidates, according to the Center for Responsive Politics, a well-respected nonprofit group based in Washington.

"We have to come together to show that we don't care about the lobby, we don't care about private industry in the sense that we are colluding with them, because sometimes the American people think that," she observed.

Barragán seemed to have missed an earlier comment from DeGette, who said her panel will call executives from three insulin makers to appear at a hearing.

She did not immediately name the companies whose representatives she has summoned. But, given her comment, it appears likely that she meant the three big insulin manufacturers, Eli Lilly, Sanofi, and Novo Nordisk.

At the hearing, DeGette asked permission to interrupt Barragán as the junior member of the committee argued for a need to call a hearing with drugmakers and PBMs.

"We're bringing them in next week," DeGette told Barragán, who replied "Fantastic." "You're welcome," DeGette said.

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