Diabetes leaders testify to Congress on the drivers and impact of high insulin prices – April 2, 2019

Subcommittee members were diligent and respectful in asking witnesses about the potential effect of drug pricing reform on insulin costs.  The representatives of the large organizations (ADA, JDRF, ENDO) and well as DPAC were highly prepared in both their formal statements and in Q&A to address reform.

Selected Witness Testimony

Dr. William Cefalu, the Chief Scientific, Medical, and Mission Officer of the ADA, referenced details from the ADA white paper published in Diabetes Care last May. The public policy recommendations from that study were:

• Increasing pricing transparency throughout the insulin supply chain. ADA’s own research on the issue found it difficult to tell who profits and how money flows through the complex insulin supply chain;

• Lowering or removing patient cost-sharing for insulin;

• Increasing access to healthcare coverage for all people with diabetes; and

• Streamlining the biosimilar approval process.

Dr. Aaron Kowalski, the Chief Mission Officer of the JDRF, referenced its Coverage2Control campaign, with the goals of “predictable and reasonable out-of-pocket costs for insulin and diabetes management tools; the freedom to choose the type of insulin and insulin pump that’s right for them; and for all life-saving technology to be covered, including artificial pancreas systems.” The list of specific actions to achieve those goals includes:

• Elimination of rebates (“an astonishing 70 plus percent of the list price of insulin”);

• FDA support for generic insulin products and eased regulatory pathway for biosimilars (“We aren’t saying that insulin companies shouldn’t be profitable, but having generics or biosimilars come to the market is another way of improving affordability.” – we note that this assumes companies are interested in this);

• Reform of deductible and co-pay structures so that patients have consistent year-round out-of-pocket costs; and

• Public and private support for the uninsured and patients on high-deductible plans.

• See an opinion from Dr. Kowalski just published in The Hill. 

Christel Marchand Aprigliano, CEO of the Diabetes Patient Advocacy Coalition, defended co-pay cards (currently under pressure in Massachusetts and California), but only if reforms permit use of these cards to count towards a patient’s deductible. A notable feature of her testimony was DPAC’s analyses of the Patient Assistant Programs of Lilly, Novo, and Sanofi. While expressing appreciation for the programs, she noted issues and suggested improvements:

• DPAC’s patient survey suggests that about 50% of PAP applicants are rejected as non-qualified; qualification criteria can be difficult to find, and income and residency verification challenging;

• Very few patients (7%) learn about PAPs at the pharmacy; almost 40% find out about PAPs from the internet (here’s one example, “How to Get Diabetes Drugs for Free” that well over 20,000 page views over the last year) and about the same percentage from their healthcare provider. More point-of-sale education and empowerment is recommended;

• 44% of patients did not receive medication quickly; since many patients turn to PAPs as a last resort, delays can be especially harmful; and

• Medicare Part D participants are “effectively banned” from PAPs since PAP use is not counted in Part D catastrophic coverage eligibility; costs under PAPs should count towards eligibility for catastrophic coverage.

DPAC also supports rebate reform, in particular restricting rebates to fixed fees rather than percentage-of-cost arrangements in an effort to curb list prices. There are currently 144 signatures on their petition on this front (nearly at the goal of 150).

In a later conversation with our team, JDRF’s Dr. Kowalski was optimistic about how payers are beginning to view the investment of making insulin more accessible up-front to prevent complications, particularly hospitalizations for DKA, which are 100% preventable and would save the system immensely. Insulin is a life-sustaining and life-saving drug, said Dr. Kowalski, but it isn’t being treated as such. We sense encouraging momentum on this front. The Insulin for All Act aims to eliminate cost sharing (deductibles, copayments, and coinsurance) for insulin on Medicare and Medicaid. To us, this type of reform seems to be one of the most tractable solutions proposed to date, and we hope to see further movement in the near future. Although we are not sure that most employers will have the appetite for this, we hope they will see the long-term value – presumably many employers will be open to cost-shifting shifting back to them (they’re the ones who shifted costs toward patients over the last several years). Although Lilly already implements a similar approach within its own health plans, presumably it is self-funded and is willing to take the cost-shifting “back” – will all other major employers follow suit? That would be an incredible commitment to see from Corporate America and we hope so! 

As next steps, Chair Diana DeGette (D-CO) noted the Subcommittee’s dedication to taking action and announced that all three insulin manufacturers – Lilly, Novo Nordisk, and Sanofi – will testify before the same Subcommittee next week, on April 10. We are not sure yet who will be speaking for each company The Senate Finance Committee will hear testimony from the three largest pharmacy benefit managers (PBMs) – Cigna/Express Scripts, CVS, and Optum – a day earlier, on April 9 (we’ve heard they’ll also be at the April 10 hearing).

Of note, Rep. DeGette and others just Monday (April 1) introduced legislation to make permanent FDA’s plan for transitioning insulin to the biologic pathway. Regulation of insulin as a biologic – could encourage biosimilar insulin development though there have been more major companies exiting diabetes R&D and manufacturing than entering it in recent years (BMS, GSK, and Takeda on the manufacturing side and Amgen and Gilead on the R&D side, to name several).

Close Concerns’ Questions

• If rebates are eliminated and transparency improves, how will increased premiums for employers be covered – will employers embrace cost-shifting back to them?

• What impact will lower insulin prices have on patient outcomes? How many more patients with type 2 would take insulin who could benefit from it?

• Will drug manufactures outside the current insulin manufacturers still have incentives to produce generics/biosimilars under a system with no rebates?

• How can regulatory systems and patent regulation be further revised to encourage the development and market entry of biosimilars and generics?

  • Will the entry of more biosimilars truly impact patient affordability?

• Medicaid programs currently include much larger rebates than other payors. How would moving away from rebates impact government spending on Medicaid specifically? What would happen to insulin demand overall? Would this help “bend the curve” by ensuring that more people take insulin where warranted?

• Would a “grassroots” approach to improving patient affordability be effective – for example, by reducing cost sharing for insulin on a health plan basis? How can this complement a legislative approach to address the rising cost of insulin? 

• How can patient affordability programs be made more impactful and easier to use, so that they actually work for patients?

• How will the PBM and manufacturer testimonies further add to our understanding of this issue, and what are the next steps for Congress?

• Will there be a continued push for free insulin and what will come of the Insulin for All Act?

--by Ann Carracher, Martin Kurian, Meghna Ray, Terry Vance, and Kelly Close