Rising Insulin Costs Addressed at Senate Hearing on Drug Prices

In a congressional hearing held on Capitol Hill today, the damaging impact of rising insulin prices was the centerpiece of a larger discussion on rising drug costs in the United States.

The Senate Finance Committee hearing, held by Chairman Senator Charles Grassley, R-Iowa, was the first of a series of hearings that will focus on drug pricing.

Kathy Sego, who is the mother of a child with insulin-dependent diabetes; Douglas Holtz-Eakin, PhD, who is president of the American Action Forum; Mark E. Miller, PhD, who is vice president of health care at Laura and John Arnold Foundation; and Peter B. Bach, MD, MAPP, who is director of Memorial Sloan Kettering Center for Health Policy and Outcomes all were part of the discussion.

“I have heard stories about people reducing their life-saving medicines, like insulin, to save money,” Grassley said in his opening remarks “This is unacceptable and I intend to specifically get to the bottom of the insulin price problem.”

Sego, of Madison, Indiana, told the panel how her son became seriously ill after rationing his insulin to save money, a story that is not uncommon among those who experience difficulty affording their medications.

Insulin affordability has become a serious public health problem. A recently issued report by the Health Care Cost Institute (HCCI) showed dramatic increases in patient spend on insulin. According to the report, spending on insulin per patient nearly doubled between 2012 and 2016 in the United States, which the researchers determined was largely driven by price hikes.¹

Many of the panel members addressed transparency as playing a potentially important role in drug pricing. Senator Grassley and Ron Wyden (D-OR) pointed the finger at pharmaceutical companies, some of which were invited to take part in the discussion but declined. Only 2 companies agreed to attend the hearing, according to Grassley.

In terms of transparency, Dr. Miller added that “certainly keeping track of contributions to providers and patients is relevant,” as well as having improved oversight of the fees and rebates in the supply chain and how those are allocated back to the government.

The hearing touched on a range of potential solutions to drive down costs, including Medicare Part D restructuring and re-examining the rebate system. Other areas of discussion included targeting anti-competitive behaviors, increasing transparency, and value-based pricing. The general consensus from the discussion was that there is a need for some type of Medicare reform and better transparency, but opinions varied concerning negotiation issues.

According to Dr. Bach, it would be valuable to reform the Part D program. He noted that the current system of back-end rebates may not serve the consumer as well as alternative arrangements that may lower the price at the counter.

In his testimony, Dr. Holtz-Eakin concluded that “A more effective solution to high prices is greater competition in the supply and greater financial incentives on behalf of the payers and manufacturers to keep costs and prices down.”²

The House Oversight and Reform Committee also held its own hearing later Tuesday. This follows Chairman Elijah Cummings, D-Md, sending letters to 12 drug companies seeking information on prescription drug pricing practices, promising to launch an investigation into price hikes. These companies included the top 3 insulin manufacturers: Eli Lilly, Novo Nordisk A/S, and Sanofi SA.

References

• Health Care Cost Institute. Spending on Individuals with Type 1 Diabetes and the Role of Rapidly Increasing Insulin Prices. 2019. https://www.healthcostinstitute.org/research/publications/entry/spending-on-individuals-with-type-1-diabetes-and-the-role-of-rapidly-increasing-insulin-prices. Accessed January 22, 2019.
• Holtz-Eakin D. Testimony Regarding: Drug Pricing in America: A Prescription for Change, Part I. American Action Forum. https://www.americanactionforum.org/testimony/testimony-regarding-drug-pricing-in-america-a-prescription-for-change-part-i/. Accessed January 29, 2019.