If state lawmakers do what our Diabetes Community needs them to, 2019 could be a banner year on the issue of drug and insulin pricing transparency.
That doesn’t necessarily mean we’ll see a direct price drop for insulin. But the first step in addressing any problem is admitting there is one, and setting the stage for actually dealing with it effectively.
We’ve seen a handful of legislative efforts across various states in recent years, following Nevada’s mid-2017 law that marked the first bill of its kind focusing specifically on diabetes prices. Now the drumbeat is growing louder, with increased media coverage and the grassroots #insulin4all effort making waves nationwide; more state legislators are raising the topic and introducing so-called “sunshine bills” aimed at insulin prices.
It’s refreshing to see both big and small groups be a part of this effort, even if they don’t always agree on exact messaging or methods. The more story-sharing and lobbying the better!
As we all wait impatiently to see what happens at the federal level with the House Oversight Committee about to start grilling various players on this issue, and others around the country are filing lawsuits against insurers, PBMs and Pharma, it’s fascinating to see that the main action may be happening at the state level.
New Data on the Insulin Crisis
Several new controversial research reports have helped put this Insulin Pricing Crisis in the spotlight. The new data is spurring discussion — and outrage — and has prompted additional advocacy from both patients and legislators, who are hearing from their angry constituents:
- Twice as Much: The non-profit Health Care Cost Institute (HCCI) released a report recently showing that a person with type 1 diabetes incurred annual insulin costs of $5,705 on average, during 2016 — equating to double the amount reported in 2012. While the data isn’t complete because there’s a lack of info from the Pharmacy Benefit Managers (PBMs), it’s telling that prices have risen so dramatically.
- Rationing: A study out of Yale University shows that 25% of PWDs (people with diabetes), both type 1 and 2, have reported using less insulin than prescribed as a direct result of high prices.
- Production Costs: A study published in the BMJ Global Health Journal earlier in 2018 claimed that with a more active and competitive biosimilar insulin market, the costs of producing analogue insulin bring the end-price down to as low as $78-$130 per person a year, while older insulins like Regular and NPH could be $48-$72 per year. Pharma disputes that estimate, and in fact it’s impossible to substantiate because many pricing data points aren’t readily available, and insulin manufacturers don’t publicly share the R&D specific to their insulins.
None of this is particularly surprising, but adds ammunition to the data gathered over several years by others and drives home the clear message: This Insulin Affordability Crisis must be addressed (!), and to address it, we need all the pricing details from all parties involved.
State-by-State Legislation on Drug Pricing Transparency
That landmark Nevada transparency law passed a couple years back mandated that Pharma and PBMs active in the state would need to share details on their price increases and costs. Initial submissions started coming in at the start of 2018, and though some didn’t comply initially, it’s reassuring to know that the Big Three Insulin Makers (Lilly, Novo and Sanofi) have sent in the required information, per media reports. So far, Nevada hasn’t released the data but that’s expected in at some point in February.
That is what the #insulin4all advocacy nationwide is pushing toward, and new chapters are popping up all the time — most recently, Michigan and Virginia joined the ranks of 17 chapters across the USA (as of Jan. 27). Even with the most recent federal government shutdown, stories of insulin rationing and unaffordability were making national headlines, and that bolstered many to raise their voices even more.
In just the first weeks of the year, lawmakers in both Minnesota and Colorado have introduced legislation calling for greater transparency in drug and insulin pricing, and we hear that more are in the works to be introduced soon.
For example, Colorado Rep. Dylan Roberts is filing a bill that calls for more transparency on insulin and diabetes drug costs. His legislation in 2018 didn’t make it, but he’s eager to move forward in the new year. If you recall, we interviewed Dylan last year and he shared the story of his younger brother Murphy, a type 1 himself who died after a low blood sugar incident while out hiking. The memory of his brother and how the cost of insulin was so burdensome for him, has been an inspiration in moving on this legislation in Colorado.
Meanwhile, in Minnesota, a multi-bill package was introduced aimed at insulin costs — from greater transparency to ensuring that emergency insulin refills are available at pharmacies. Minnesota Senate File 366 would require Pharma companies that sell insulin to explain their decision to hike prices and the state health commissioner would then analyze that information and present it to the state legislature.
A big reason why Minnesota is moving on this relates to 26-year-old Alec Raeshawn Smith, who died after rationing insulin and whose story has been shared nationally since then. His mom, Nicole Smith-Holt has been a key advocate in raising her voice on this issue and has joined with other #insulin4all advocates, including D-advocate Quinn Nystrom to work with lawmakers on this issue.
Creating Model Legislation for States (DPAC and NDVLC)
Given that action seems to be coming at the state level, Diabetes Community advocates are wisely focusing their efforts on helping more states follow suit.
In December 2018, the Diabetes Patient Advisory Coalition (DPAC) and National Diabetes Volunteer Leadership Council (NDVLC) announced model legislative aimed at drug cost transparency for state legislators to consider. It’s dubbed the Access To Lifesaving Medications Act, or ALMA for short. The model language includes “patient-centric” measures specific to meds for diabetes and other chronic illnesses, as well as provisions designed to help everyone in terms of transparency on prescription drug coverage and reimbursement systems.
ALMA has admirable goals of helping people to:
- Understand the terms of their prescription coverage;
- Compare treatment costs and make an informed decision in collaboration with their health care provider; and
- Pay the lowest available price for their prescriptions at the point of sale.
ALMA also contains diabetes-specific provisions to cap patient cost-sharing for insulin and other D-meds, as well as devices, supplies and services.
Sounds great, for sure… but just how would legislation go about achieving all that? Here’s what the ALMA states specifically:
- Eliminate consumer exposure to excess cost burden – passing through rebates and other negotiated discounts, including co-pay cards, at the point of sale so patients pay the lowest available price for their prescriptions;
- Prohibit pharmacy gag clauses in prescription medication benefit contracts – allowing pharmacists to discuss lower priced, therapeutically equivalent options with consumers and sell lower priced alternatives if one is available;
- Improve patient access to transparent prescription medication coverage and medically appropriate treatment – eliminating patient cost sharing for lifesaving medicines; clarifying health carrier and pharmacy benefit manager (PBM) obligations to make certain coverage information available and understandable to consumers, and affirming that a prescriber’s determination of medical necessity prevails;
- Require transparency reports from health carriers, PBMs and pharmaceutical manufacturers – to discourage wholesale acquisition cost (a.k.a. WAC or “list price”) inflation and ensure negotiated rebates, discounts and price concessions pass through to consumers;
- Require fee-only pharmacy benefit management state contracts – eliminating spread pricing and PBM compensation based on a percent of list price or retained rebates in state employee health plans and Medicaid managed care contracts
Reading through these requirements, you’ll find some very notable items: language requiring PBMs to report all rebates and administrative fees received from Pharma companies; allowing pharmacists to recommend lower-priced meds to patients without penalties; and the bit about “affirming that a prescriber’s determination of medical necessity prevails” — which is a direct hit at the controversial practice of “non-medical switching.”
ALMA also calls for PBMs to break down specifically what is and isn’t passed on to another party or the patient at point-of-sale or otherwise. Many of those same requirements are echoed in the provisions for health insurance carriers, including the creation of a list of the top outpatient prescription meds.
In the Pharma requirements, the language sets percentage-thresholds of price hikes for which Pharma would need to report: if they’ve raised list prices 20% in the past year or 50% in the prior three years.
While that threshold seems high, meaning many companies that don’t wouldn’t have to report, our advocacy contacts tell us the numbers are meant only as a starting point for lawmakers to use when crafting and considering their own legislation.
“We have left it up to states to decide a threshold that works for them,” says DPAC’s Policy Director Leyla Mansour-Cole, an attorney and fellow type 1 in Rockland, MD. “The reason for this is because we’re trying to appeal to state legislators broadly, and they need to decide how much state money goes into this legislation.”
She says state legislators and potential bill sponsors who really value the reporting requirements may want to push for a lower threshold, even if that means higher spending by the state in order to collect and organize additional data. However, legislators who might want to reduce the funding component of the bill could look at a higher threshold for the reporting requirement.
“We tried to make this bill as enticing to state legislators as possible, since it has so much in it that directly helps patients — like the pass-through rebates, provider-prevails language, and an end to accumulator adjustment programs,” Mansour-Cole says.
Leading the Advocacy Charge
In case you’re wondering about the people behid all this advocacy, one individual who stands out is T1D peep Angela Lautner, who lives in Kentucy and leads the tri-state #insulin4allchapter for Kentucky, Ohio and Indiana (KOI). She started getting involved in Fall 2017, when the first protest in front of Eli Lilly HQ in Indianapolis was being organized, and she officially launched the KOI chapter in March 2018.
Together in that three-state chapter, they have about a dozen people actively involved to date. Lautner says she spends about 40 hours in addition to her full-time airline industry job focused on this #insulin4all advocacy. It’s basically another full-time job, she says.
“Because I’ve been laid off so many times in the airline industry… my emergency funds go to covering insulin when I’m not working. It doesn’t go for my apartment, or bills, or look to find another job or move to do that in the airline. That’s my priority. Any of us could be in that situation at any time,” she tells the ‘Mine.
When first starting the chapter, she wasn’t sure whether it would be best to just focus on Kentucky or look at the bigger tri-state area. At an early 2018 kickoff meetup, PWDs came from all over the region, so they decided it was best to expand to all three states. Other advocates stepped up to lead efforts in each respective state. They pushed for in-person petitions to get legislators to address this topic, and it also helped them raise awareness about type 1 diabetes and diabetes overall – and then, to drill down into insulin price transparency.
Lautner’s first priority was targeting the GOP in Kentucky, meeting and networking with lawmakers and lobbyists for as little as 60-second “elevator pitch” meetings on the issue, if that’s all the lawmaker had time for. They now have a bill in the works in Kentucky and another expected in Ohio soon. Kentucky Republican Senator Ralph Alvarado is expected to introduce the bill, and Lautner says that she and fellow advocates locally are working on other legislation relating to changes on emergency refills for insulin.
After watching the Colorado legislation get shot down in 2018, Lautner says she learned just how complex the system is, and that even state legislation must include all the players involved in the setting prices — insulin manufacturers, PBMs, insurers, pharmacies, etc. While she would love to see price-caps in place, that’s not a place to start — rather they must begin by pushing for transparency first.
While it’s not yet final and introduced, the Kentucky bill’s working draft resembles the Nevada-passed one except it does not include a transparency provision aimed at manufacturers-to-nonprofits, because that was a controversial point. Lautner says her group is OK with that.
“We’ve developed a very complicated system in this country in the last 41 years that I’ve been alive… well, it’s now time to un-complicate that. And this is just part of it, one thing we need to do,” she says.
She’s pleased to see the American Diabetes Association (ADA) now also involved in efforts to craft state legislation on transparency — something that wasn’t as visible early on. She also notes that staying respectful, and not openly criticizing other organizations and advocates or players in the system, is key to working for the benefit of this legislation.
“A lot of things have to happen for this kind of legislation to materialize, and you may have to give up a couple things that you’d like to have otherwise done, just to make progress for the betterment of everyone with diabetes. That’s something I truly believe #insulin4all chapters have to learn — find your local allies and work with them respectfully. It may take time, but keep the door open,” she advises.
We thank these advocates for their devotion, and remind our D-Community to keep pressing for new State Legislation if we’re hoping to see meaningful action any time soon.