PBMs, drugmakers both to blame for rising insulin prices, legislators say at hearing

Both the AH&LA and AAHOA released statements in support of the President’s call for bipartisan efforts to improve border security and ongoing job growth.
House Energy and Commerce subcommittee heard testimony this week from drug manufacturers on insulin prices. (Getty Images/Bill Chizek)

There's plenty of blame to go around in the pharmaceutical supply chain for the rising cost of insulin, legislators said at a hearing Wednesday.

Diana DeGette, D-Colorado, chair of the House Energy and Commerce Oversight and Investigations subcommittee, said “many entities share blame for the system” that has led to a jump in the price of insulin; the average list price nearly tripled between 2002 and 2013. 

Congressman Greg Walden, R-Oregon, agreed that while companies like Express Scripts were mitigating the problem through programs like one that would cap out-of-pocket costs for a 30-day supply of insulin at $25, these are only temporary solutions.

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“We keep hearing that net prices are flat or increasing and rebates are being passed onto health plans, not patients,” said Rep. Brett Guthrie, R-Kentucky. “We have short-term solutions and we collectively need to find a permanent solution.”

Representatives heard from witnesses representing pharma companies Eli Lilly, Novo Nordisk, and Sanofi along with pharmacy benefit managers CVS Health, Express Scripts and Optum. 

RELATED: Changing prescribing practices could slash insulin costs, study finds 

The executives from these two industries were divided over which solutions would most effectively address rising insulin costs. Mike Mason, senior vice president of Lilly Connected Care and Insulins Global Business Unit, for example, pushed for a nationwide preventive drug list that would consider how access to preventive treatment can lead to significant cost savings, and also backed a Department of Health and Human Services plan to end PBM rebates in Part D and Medicaid.

He noted that of the billions of dollars spent in the U.S. annually on medical expenses, only 6% is spent on insulin, yet much more than that is spent on treating the complications of diabetes. 

"Making people with chronic diseases like diabetes pay high prices for their medications does not make sense as a matter of public policy,” Mason said.

Thomas Moriarty, executive vice president and chief policy and external affairs officer at CVS Health, by contrast, pitched eliminating co-pays for preventive medications like insulin. He also suggested Congress pass a plan to reform Medicare law to offer greater support services to help diabetes patients manage their conditions more effectively.

Executives representing Optum and Express Scripts also called for steps to introduce greater competition into the insulin market.

Sumit Dutta, M.D., senior vice president and chief medical officer at Optum, defended the role PBMs play in the system, saying they are “the only stakeholders in the prescription drug supply chain working to reduce costs for their customers and the only ones able to effectively negotiate with drug companies.” 

RELATED: Insulin prices nearly doubled in 5 years

The panelists were also split in how pricing reform would affect the market. When asked whether list prices should be treated more like net prices, especially if rebates go away, Mason said that in the short term, manufacturers need to keep list prices so they have enough funds to give access to drugs to those who need it.  

However, Amy Bricker, senior vice president of supply chain at Express Scripts, disagreed, saying that if all net prices of drugs went down, it would not hurt incentives.  

DeGette said it's clear something needs to change, and that a bipartisan solution was the correct path. The subcommittee may reconvene later this year to see if progress has been made, she said.

“The people who are suffering need insulin every second of every minute of every day or they will die," she said.

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