Endocrine Society Calls for Negotiated Insulin Prices in Medicare

The United States should start allowing Medicare to negotiate insulin prices, according to a position statement released this week by the Endocrine Society.

The statement, published in The Journal of Clinical Endocrinology & Metabolism, is aimed at drug companies, policymakers, pharmacy benefit managers (PBMs), employers, and others, and calls attention to soaring insulin costs, which were the subject of several Congressional hearings in 2019.

Besides Medicare beneficiaries, insulin costs affect young adults who move off of their parents’ health plan after age 26, those on high-deductible health plans, the uninsured or underinsured, and those with low incomes.

In 2016, a research letter appearing in JAMA revealed that insulin prices nearly tripled between 2002 and 2013, jumping from $4.34/mL to $12.92/mL. During the same period, estimated spending for insulin per patient increased from $231 to $736. Another report, in January 2019 from the Health Care Cost Institute, showed that between 2012 and 2016, insulin spending per patient almost doubled, from $2864 to $5705, during the 5-year period.

CMS is prohibited by law from negotiating directly with pharmaceutical companies over drug prices for Medicare beneficiaries.

The society called on PBMs to create transparent pricing arrangements with manufacturers that do not result in large annual increases in manufacturer list prices and on manufacturers to develop patient assistance programs (PAPs) that are inclusive, accessible, and ending the use of copay savings cards.

For instance, although those without health insurance may be eligible for a manufacturer-sponsored PAP, the statement said the programs are cumbersome to navigate, to the point that some patients run out of insulin.

It also called on employers to limit costs to copays without increasing premiums or deductibles and to choose plans with diabetes in mind. More than 34 million Americans have diabetes, and another 88 million may be prediabetic, the society said.

The statement also called for greater use of real-time, patient-specific benefit information about medication costs in electronic health records for prescribing clinicians, so that they know what patients will be asked to pay and lower cost alternatives are available. This information is not currently widely available.

For Medicare beneficiaries, the cost depends on whether they are covered by Part D or Part B. Those with Part D coverage without a supplemental plan must pay full price for insulin until they meet their deductible, after which point they will pay coinsurance until meeting their plan’s initial coverage limit for prescription drugs ($4020 in 2020). They then enter the so-called donut hole coverage gap, where they pay full price again until catastrophic coverage begins. This is where patients may decide to ration insulin or go without.

Part B covers costs for patients using insulin via a pump. Without a supplemental coverage plan, patients pay 20% of the average sales price as their copay once their annual deductible is met, the society said. While in the donut hole, they will pay 35% of the plan’s cost for covered brand name prescription drugs until reaching their annual out-of-pocket limit of $5000. Catastrophic coverage will then begin, and the Medicare beneficiary will pay a small coinsurance or copay.

"Inventors Frederick Banting and Charles Best sold the insulin patent for a mere $1 in the 1920s because they wanted their discovery to save lives and for insulin to be affordable and accessible to everyone who needed it," Endocrine Society President-elect Carol Wysham, MD, of the Rockwood/MultiCare Health Systems in Spokane, Washington, said in a statement. "People with diabetes without full insurance are often paying increasing out-of-pocket costs for insulin, resulting in many rationing their medication or skipping lifesaving doses altogether."