As Congress considers legislation that would cap out-of-pocket costs for insulin, Walmart and Civica Rx are taking steps that could make less expensive versions of the diabetes medication more available.
If it were a popularity contest, putting a $35-per-month cap on out-of-pocket insulin costs would win, no problem.
About 87% of voters surveyed by think tank Data for Progress support the idea. President Joseph Biden is on board. He mentioned it in the State of the Union address and has talked about it since. The Build Back Better legislation that passed the U.S. House of Representatives in November 2021 but stalled in the Senate included a $35 monthly insulin cap among its drug-pricing provisions. A separate bill, the Affordable Insulin Now Act, which would also limit the price of insulin, passed the House in March.
Some drugmakers have taken steps to blunt the criticism about insulin prices. For example, Sanofi announced in late June that it limit its insulin prices to $35 per month for people without health insurance.
The political momentum to cap insulin prices comes as out-of-pocket prices for the medication continue to be high and are rising. The average cash price for insulins climbed approximately 55% from 2014 to 2019, from $0.22 to $0.34 per insulin unit, according to GoodRx (an insulin unit is a measure used for dosing; for example, a concentration of U-100 has 100 insulin units per milliliter). Since then, it has dropped some, $0.33 to $0.31, which works out to 5%.
Most of this current decline is a result of recent approvals of generics and biosimilars. But not all insulins saw decreases, according to GoodRx’s January 2022 report on insulins. GoodRx tracked 28 insulins across all manufacturers and insulin types. A package of five generic insulin lispro KwikPens, for example, still costs about $300 compared with the $700 price for a similar package of brand-name Humalog KwikPens.
In December 2021, the House Committee on Oversight and Reform’s minority staff issued a report on pharmacy benefit managers’ (PBMs) practices and drug pricing that found that drug prices overall have risen three times faster than inflation and that patient out-of-pocket costs have increased by 53%.
Manufacturers are charging what the market will bear, Allan Coukell, senior vice president of public policy at Civica Rx, said in an interview with Managed Healthcare Executive®. “The retail distribution system for drugs is a system that incentivizes very high list prices; it is also not transparent about negotiated prices. A lot of what you’re looking at is a profit margin with those products.” Civica Rx is a nonprofit generic company that recently announced a new initiative in the insulin space. The company has entered into a co-development and commercial agreement with GeneSys Biologics for three insulins it plans to sell at a major discount. Civica Rx anticipates that the first insulin, glargine, will be available by early 2024.
The Build Back Better Act that the House of Representatives passed in November included several provisions that would lower prescription drug costs. Those concerning insulin would have capped monthly insulin costs for people covered by Medicare and private insurance. Sen. Raphael Warnock (D-Ga.) introduced the Affordable Insulin Now Act, which would cap insulin prices at $35 per month, in the Senate.
In June, Sens. Susan Collins (R-Maine) and Jeanne Shaheen (D-New Hampshire) announced that they would be intrducing a different bill that take several steps to improve access to insulin, including the $35 cap on out-of-pocket costs featured in the other bills.
Kaiser Family Foundation research found that 26% of those with an insulin prescription who have bought health insurance coverage in the individual market (primarily through the Affordable Care Act exchanges) would benefit from a limit of $35 on monthly out-of-pocket costs for insulin. Currently, more than 1 in 20 insulin users in the private insurance markets pay more than $150 per month per insulin product, according to a recent review by the foundation.
In the large group market, the researchers found that if insulin was capped at $35 a month, median savings would be $19 per month, and one-quarter of patients would save at least $42 per month. The researchers also reported that in the small group market, median savings would also be $19 per month, and one-quarter would save at least $48 per month.
A different analysis from the Health Care Cost Institute, an independent, nonprofit healthcare research organization, found that a $35 cap on insulin would benefit about 70% of patients with commercial insurance who pay for insulin. The institute’s analysis, which used 2019 claims data, determined that almost 30% of individuals in the sample had average monthly out-of-pocket spending on insulin between $51 and $100, 16% had average monthly spending between $101 and $200, and close to 9% had average monthly spending over $200.
Coukell points out that efforts to cap insulin prices would lower costs only for those with insurance and wouldn’t help those without it. The National Center for Health Statistics estimates that between January 2021 and June 2021, about 31.1 million people, or 9.6% of the population, were uninsured.
“One of the ways that uninsured patients get hurt the most is that their out-of-pocket cost is driven by a very high list price, which PBMs and insurance companies don’t pay,” Coukell. “They all negotiate a lower price. But if you’re somebody who doesn’t have insurance, they will be charged $300 a vial.” A 2020 report from The Commonwealth Fund found that uninsured people are also much more likely to pay full list price for insulin (68%) than those who are privately insured (9%) or have coverage through Medicaid (3%).
Walmart, which has said that 14% of its shoppers have diabetes, introduced its own brand of insulin in 2021 that could help those without insurance. Available through Walmart’s private ReliOn brand, the company announced that analog insulin vials would be priced at $72.88 and a FlexPen option at $85.88. A few months later, the retailer began offering an equivalent of the combination NovoLog Mix 70/30 for the same price. Walmart is also working directly with Novo Nordisk, which sells the NovoLog brand, to develop a private-label version.
Civica Rx announced in March that it will sell insulins for no more than $30 per vial and no more than $55 for a box of five pen cartridges. The company said it will manufacture glargine, lispro and aspart that are interchangeable with their brand-name products, Lantus, Humalog and Novolog, respectively. In June, Civica announced that Profil, a German company, will be its “clinical trial partner” in developing the insulin. But patients will have to be patient: The company said the first insulin, glargine, won’t be available until early 2024.
“We’re not going to have a high price and a subsequent discount or rebate that’s only available to some purchasers,” Coukell said in his interview with MHE. “We hope that if Civica insulin is out there for no more than $30 a vial, other manufacturers will have to respond to that,” he added. “It will become difficult or impossible for anybody to try to charge patients hundreds of dollars for an identical product.”
Denise Myshko is senior editor of Formulary Watch®, a news website affiliated with Managed Healthcare Executive®.