Today we continue our ongoing coverage of the Insulin Affordability and Access Crisis in the U.S. with a fascinating interview by our correspondent Dan Fleshler in New York, who's been following the role of Pharmacy Benefit Managers (PBMs) and what can be done to address the big issue of drug pricing.

(See hashtag #PBMsExposed for more.)

 

Q&A with Diabetes Advocate Rick Phillips, by Dan Fleshler

The Diabetes Community desperately needs good ideas to address the dangerous crisis of high insulin costs, at a time when some Americans are literally forced to choose between insulin and food. Searching for new solutions, I talked with Rick Phillips, who is uniquely qualified to discuss the infuriatingly complex insulin supply chain.

Rick has both type 1 diabetes and Rheumatoid Arthritis and is an energetic advocate for people with both diseases, writing the RA Diabetes blog. For 30 years, he's helped to administer health insurance plans for school systems in Indiana. He retired in 2008 but keeps in close touch with former colleagues in the health insurance trenches, and his work there gives him very useful insights into our broken drug pricing system.

Rick PhillipsHere's my recent back-and-forth with Rick:

DF) When talking about high insulin prices, the focus has mainly been on insulin manufacturers and pharmacy benefit managers (PBMs). We don’t hear much about the businesses that hire the PBMs and set up and sponsor health insurance plans for employees. Are they also contributing to the crisis?

RP) Yes, I don’t think insulin has been given the importance it deserves in health plan design. It’s often treated as a commodity and really gets little recognition as a life-sustaining drug. We haven’t done enough to help health plan administrators understand that insulin is necessary for T1Ds to live. 

That’s astonishing. You mean the people in charge of health plans really don’t know that without insulin, some of their employees or their family members will die?

In the back of their minds, they may understand it at some level, but when they design and negotiate health plans, they don’t attach the importance to insulin that it deserves… In one of the last [health insurance] committees I worked on, I was pressing to move several drugs from one formulary category to another. Insulin was one of them. An executive said, “This is the same place on the formulary that insulin has always had. It’s been there forever.”

I don’t think enough health plan administrators understand that insulin needs to be treated as life-sustaining!

What can we do about that?

Only about 10-15 employers in this country really have the ability to influence formularies -- including GM, Ford, IBM, UPS, PepsiCo, Coca-Cola, FedEx, Verizon and others that have high numbers of employees covered by private insurance. These are the companies that have the most leverage with the PBMs, so we need to focus on them and tell them our story, including the fact that insulin is not an optional medication, and we need them to force the reclassification of formularies. I like the idea of an effort aimed at HR professionals at these companies to educate them about insulin.

(See recent D'Mine coverage of PBM-focused advocacy efforts underway.)

 

We also need to put pressure on all of the other parts of the pricing system, right?

Of course. We have to educate employers, to speak out on PBM’s and continue the pressure on [insulin] manufacturers to reduce prices. No one single group can solve this issue alone. 

What about people with diabetes who are uncomfortable approaching the HR folks in their companies and calling attention to their health condition?

In my estimation, we have to get over that. Not so long ago people were afraid to test their blood in public. Yet today we have started to say it is OK to do so. We have a choice: are we willing to accept the status quo or are we willing to make our point? I don’t think there is any other way. But the cost of insulin should be raised with employers in a civil manner, not a confrontational one.

What should we demand from PBMs, besides transparent pricing?  

What's a "Formulary" Again?
A Formulary is a list of selected drugs and medical equipment covered by a given health insurance plan. Formularies are divided into “tiers” -- typically with the “preferred” drugs with lowest co-payments in Tier 1, most of those being generic. The higher the tier, the more money the patient will need to pay out-of-pocket.

PBMs can help reduce the cost of insulin in several ways:

  1. Place insulin in the lowest formulary tiers. Using a new classification that puts insulin in the same category as generic drugs is the quickest way to solve the problem. I have felt it should be in that category for years.
  2. Diversify the formularies. For example, if fast-acting Novolog and Humalog are considered interchangeable by physicians, then offer both as Tier 1 drugs instead of how it currently works with plans often forcing people to choose a specific "preferred" brand.
  3. Take the rebates now provided by manufacturers to PBMs and make sure consumers benefit from those discounts at the retail level, at the point-of-sale.

Do you honestly think the PBMs, Big Insulin and other companies that have our lives in their hands can be persuaded to change their approach?

Yes. Let me give you an example of what’s possible: most health care plans now cover 100% of the costs of vaccinating children. Thirty years ago, that was not the case at all, and it only changed when, as a society, we came to understand that vaccines are a necessity to public health. We need to work to raise insulin to that level of importance.

For the RA community, some medications are life-saving. One of those is Methotrexate. Now it’s in the generic drug category. It didn’t used to be, but we fought for it. It’s time for us to help insulin work its way into the lower tiers like Methotrexate.

That would help. But those are all just baby steps, really… What do you think of the idea of a single-payer system, which some believe ultimately is the only sensible path for American healthcare?

I didn’t used to believe that, but now I do. From the time I started working in the system until now, it has become more and more inefficient... A single-payer system like Medicare-for-all would be cumbersome and there would be problems. But the current situation is so outlandish that I don’t know what else to do, if we are talking about reforming the entire system.

 

Image Attribution

Image Attribution

Source: TheProgressivePhysician.net

Rolling Up Our Sleeves

Before my talk with Rick, I would have laughed if you’d told me that I would be invigorated, rather than put to sleep, by a chat about health insurance administration and formulary design. But I found his perspective to be both fascinating and helpful. He's written about his ideas for battling insulin price inflation on his blog, and it's worth the read.

Other ideas can be found in DiabetesMine’s summary of the Lilly Diabetes Insulin Access Workshop, which Rick attended in mid-April along with several other diabetes advocates – just two weeks before Lilly bumped up the list price of Humalog and other medications.

Even though that price hike is appalling, it doesn’t mean the ideas discussed there should be ignored.

The Diabetes Community needs to continue rolling up its sleeves and keep on doing the hard work of pressing, pushing and prodding to make these reforms a reality (and, IMHO, join with those who are advocating for more systemic changes -- notably a single-payer system). 

 

Thanks, as always, for your hard work on this topic of #InsulinPrices and #PBMsExposed, Dan! We appreciate your insights and hope the D-Community can effectively work together to move the needle (so to speak).

Disclaimer: Content created by the Diabetes Mine team. For more details click here.

Disclaimer

This content is created for Diabetes Mine, a consumer health blog focused on the diabetes community. The content is not medically reviewed and doesn't adhere to Healthline's editorial guidelines. For more information about Healthline's partnership with Diabetes Mine, please click here.