Drug pricing fight centers on insulin

Lawmakers are zeroing in on the skyrocketing cost of insulin and putting pressure on manufacturers as they work to address high drug prices.

Congressional Democrats, Republicans and the Trump administration say that lowering drug prices is a priority, and drugmakers are on the hot seat.

Insulin could prove an easy target in that push. The drug hasn’t changed much since it was first discovered nearly 100 years ago, and as newer forms of the drug have been introduced, the price has climbed.

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There is also no generic competition to the brand names that cost patients hundreds of dollars a month.

Three companies — Eli Lilly, Sanofi and Novo Nordisk — control 99 percent of the world’s insulin, and lawmakers are demanding they explain their pricing.

According to the American Diabetes Association, the average price of insulin nearly tripled between 2002 and 2013 and then nearly doubled from 2012 to 2016.

For the first time, there are bipartisan and bicameral probes from the top health care committees into the insulin market, and advocates are hopeful this renewed focus will lead to more oversight and transparency for a drug that helps more than 7 million Americans.

The House Energy and Commerce Committee’s oversight subcommittee, led by Rep. Diana DeGette (D-Colo), is investigating the main insulin makers over “skyrocketing costs.”

DeGette and Rep. Tom Reed (R-N.Y.) conducted a similar inquiry last year as co-chairs of the Congressional Diabetes Caucus, but now that Democrats have taken power in the House, DeGette said she wanted to do an official committee investigation.

“We thought it was pretty thorough, but it was through the Diabetes Caucus and not through an official committee,” DeGette said in an interview.  

Now, as chairwoman of a powerful subcommittee with jurisdiction on health care, DeGette said she thinks the findings of the investigation will lead to substantial policy reforms.

The goal is to hold a hearing on the issue “soon,” but DeGette noted the investigation will be much larger.

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“This isn’t going to be sort of a one hearing, it’s going to be an ongoing investigation … we actually think we can develop legislation out of these hearings,” DeGette said.

The House Oversight and Reform Committee, led by Rep. Elijah Cummings (D-Md.), is also conducting its own sweeping probe of drug industry pricing practices, including insulin manufacturers.

Across the Capitol, bipartisan Senate Finance Committee leaders have also pledged to investigate spiking insulin prices. Committee Chairman Chuck Grassley (Iowa) is a free-market Republican who has long been an adversary of the drug industry.

“I have heard stories about people reducing their life-saving medicines, like insulin, to save money,” Grassley said during a recent hearing on drug prices. “This is unacceptable and I intend to specifically get to the bottom of the insulin price increase.”

“There has been no recent ‘a-ha’ moment in a lab to explain why the list price of Eli Lilly’s main insulin drug, Humalog, went from $21 a vial in 1996 to its current list price of $275. A thirteen-fold increase,” said Sen. Ron Wyden (Ore.), the Finance Committee’s top Democrat. “Humalog isn’t thirteen times as effective as it used to be.”

Wyden said he is optimistic the bipartisan interest in reducing drug prices will lead to action, especially with insulin.

“The chairman and I both said we’re going after this,” Wyden told The Hill. “We have jurisdiction over $1 trillion in health spending. And you have a chairman and a ranking member who have a history of going after price gouging, and that presents an opportunity.”

Yet untangling the price is not easy and speaks to the larger issue of rising drug costs.

Drugmakers say the list price of insulin isn’t what patients actually pay, because secret rebates negotiated by pharmacy benefit managers will reduce it.

Insurers say they spread the savings from discounts to lower overall premiums.

“It is our belief that growing rebates and declining net prices should result in lower out-of-pocket drug costs for patients. Unfortunately, under the current system, this is generally not the case and these savings are not consistently passed through to patients in the form of lower co-pays or coinsurance,” Sanofi wrote in a letter to House and Senate lawmakers, ahead of hearings last month.

Sanofi is cooperating with the separate probes, and the company’s CEO, Olivier Brandicourt, will testify in front of the Senate Finance Committee next week, along with executives from six other pharmaceutical companies.

Cynthia Rice, senior vice president of advocacy and policy at JDRF, an organization funding Type 1 diabetes research, said congressional attention is important, but she wants to see more.

“I think there are concrete things the public and private sector can do, but it requires key decision makers to take action,” Rice said.

“Companies need to lower prices, make more insulin available, Congress needs to end rebates, [and] health plans and employers need to take action and provide good coverage,” she added.

The Trump administration is taking aim at those rebates. The Department of Health and Human Services wants to eliminate rebates for drugs purchased by Medicare, to make manufacturers compete to lower sticker prices.

However, only Congress can expand the proposal to the private sector.