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Senators, diabetes stakeholders seek transparency in insulin pricing
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Stakeholders from the diabetes community brought their growing concerns regarding rising insulin prices before Congress on Tuesday, outlining the complex problems that place a lifesaving drug almost out of reach for some people with diabetes and seeking help from legislators to demand more accountability in drug pricing.
The testimony before the U.S. Senate Special Committee on Aging follows a statement from the American Diabetes Association outlining findings from the organization’s insulin access and affordability working group, also published Tuesday. The working group, convened in spring 2017, identified several issues influencing the high price of insulin, including a lack of transparency throughout the insulin supply chain and a complicated regulatory framework for developing so-called biosimilar insulins.
Between 2002 and 2013, the average price of insulin has nearly tripled, whereas 24% of adults with diabetes earning below the poverty level use insulin, according to the working group. Currently, there are no generic insulins on the market, and there are only three insulin manufacturers in the United States — Eli Lilly, Novo Nordisk and Sanofi. The current pricing and rebate system involving those manufacturers and other stakeholders, including wholesalers, pharmacy benefit managers, payors and employers, encourages high list prices for a lifesaving drug, which must be paid by patients without insurance or those with insurance who have a high-deductible plan, according to the working group.
“As a physician and clinician scientist, I have witnessed firsthand how the incredible research advances and innovative therapies resulting from investment in biomedical research have dramatically improved the lives of those with diabetes,” William T. Cefalu, MD, chief scientific, medical and mission officer for the ADA, said in prepared remarks before the Senate committee Tuesday morning. “However, I have also observed that the incredible innovation may not benefit those who are not able to access and afford such treatments.”
In its consensus statement, the ADA working group highlighted the difference between the list price for insulin — which manufacturers are rarely paid — and the lower, so-called “net” price, which reflects what the manufacturers actually receive. In most cases, data outlining those differences are not available, the researchers wrote. In most cases, discounts and rebates negotiated between pharmacy benefit managers (PBMs) and manufacturers and pharmacies, which affect the cost of insulin for people with diabetes, are confidential. Additionally, PBM clients are not privy to such negotiations, nor do they know the net price obtained by the PBM for insulins, and formulary considerations and decisions are also not transparent, according to the working group.
“There is a flow of money that we don’t quite understand. ... None of these savings and profits are flowing back to the vulnerable patients,” Cefalu said when addressing the Senate committee. “Our understanding — or lack of understanding — is that the negotiations are private.
“The underinsured and the uninsured are the patients subsidizing the system,” Cefalu said, referring to patients who must pay the high list prices.
Addressing the panel during the hearing, committee member Elizabeth Warren, D-Mass., called insulin an “obvious candidate” for a healthy, competitive market.
“It’s been around almost 100 years ... and multiple companies make it,” Warren said. “So ... why are prices going up instead of down? How many generics on the market today? After 100 years on the market, zero. That’s amazing.”
Warren accused insulin manufacturers of practicing what she called “evergreening strategies” — releasing new, incrementally improved versions of older insulins to extend patent protection and keep competitors out of the market.
“I see an industry doing everything it can to throw sand in the view of the insulin market, so they can keep raking in the cash on the back of patients,” Warren said. “It is time we look into policy solutions that will actually make a difference for patients.”
Addressing the point of newer insulin formulations, Cefalu, who also led the working group, noted that incremental changes in insulins have made a difference in outcomes for many patients. The question to be addressed, he said, is why such steep increases in cost exist throughout the supply chain.
“It’s the system that needs to be fixed,” Cefalu said. “Fix the rebate. Where does this rebate go? Who is benefiting? Who is profiting? The patient is certainly not getting the rebate at the point of sale. Why are there rebates at all?
“When we talk about solutions, we want to talk about solutions throughout the entire chain and not pick out one stakeholder,” Cefalu said, referring to manufacturers. “Isolating one stakeholder will not get the job done.”
Testifying before the panel, Jeremy Greene, MD, PhD, the Elizabeth Treide and A. McGehee professor of medicine and the history of medicine, and interim chair of the department of the history of medicine at Johns Hopkins University School of Medicine, also cited the lack of a generic market for insulin and pointed to the opaque nature of negotiations surrounding pricing as reasons behind the drug’s high cost.
“We know from a number of studies of the off-patent pharmaceutical marketplace that robust price competition does not occur in the pharmaceutical marketplace until four or more manufacturers compete in a given drug market,” Greene said in his prepared remarks. “But in the case of the insulin market, prices have been rising dramatically over the past decade, with no clear indication of why.
“It is to everyone’s advantage to actually point at each other while list prices remain high,” Greene said later, addressing the congressional committee. “None of these individual actors is going to willingly provide this [price] transparency.”
Senate committee chair Susan Collins, R-Maine, who founded the Senate Diabetes Caucus in 1996, said she never envisioned the high cost of insulin as a problem her committee would be confronting.
“When I founded the caucus, I never dreamed that we would have a problem with the cost of insulin, given how long insulin has been around,” Collins said. “It’s becoming a barrier to treatment for so many Americans with diabetes who are unable to control their diabetes without insulin. It is puzzling to say the least that even older versions [of insulin] are increasing in price at rates that are untenable for too many Americans with diabetes.”
Collins called the pricing issue “the most complex web that I have ever seen.”
“We’re going to need the help of the experts at our witness table as we seek to unravel the web and see what is going on,” Collins said.
In developing the consensus statement, the ADA working group held meetings with more than 20 stakeholders throughout the insulin supply chain, including representatives of pharmaceutical manufacturers, wholesalers, PBMs, pharmacies, pharmacists, distributors, health plans, employers and people with diabetes and caregivers, who responded to a set of standard questions focused on learning the role each entity plays in the supply chain, the issues each entity faces, and their recommendations for change.
Cefalu said the ADA will soon release a follow-up paper with more specific public policy recommendations on lowering out-of-pocket costs for people with diabetes. The ADA working group’s statement was published online in Diabetes Care. – by Regina Schaffer
Disclosures: Cefalu is chief scientific, medical and mission officer for the ADA. Please see the ADA statement for the other authors’ relevant financial disclosures.
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