[Senate Hearing 115-673]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 115-673

     INSULIN ACCESS AND AFFORDABILITY: THE RISING COST OF TREATMENT

=======================================================================

                                HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                              MAY 8, 2018

                               __________

                           Serial No. 115-17

         Printed for the use of the Special Committee on Aging

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


        Available via the World Wide Web: http://www.govinfo.gov
                       
                    
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
35-281 PDF                  WASHINGTON : 2019                     
          
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                       SPECIAL COMMITTEE ON AGING

                   SUSAN M. COLLINS, Maine, Chairman

ORRIN G. HATCH, Utah                 ROBERT P. CASEY, JR., Pennsylvania
JEFF FLAKE, Arizona                  BILL NELSON, Florida
TIM SCOTT, South Carolina            KIRSTEN E. GILLIBRAND, New York
THOM TILLIS, North Carolina          RICHARD BLUMENTHAL, Connecticut
BOB CORKER, Tennessee                JOE DONNELLY, Indiana
RICHARD BURR, North Carolina         ELIZABETH WARREN, Massachusetts
MARCO RUBIO, Florida                 CATHERINE CORTEZ MASTO, Nevada
DEB FISCHER, Nebraska                DOUG JONES, Alabama

                              ---------- 
                              
                 Kevin Kelley, Majority Staff Director
                  Kate Mevis, Minority Staff Director
                                
                                
                                
                                CONTENTS

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                                                                   Page

Opening Statement of Senator Susan M. Collins, Chairman..........     1
Statement of Senator Robert P. Casey, Jr., Ranking Member........     3

                           PANEL OF WITNESSES

William T. Cefalu, M.D., Chief Scientific, Medical and Mission 
  Officer, American Diabetes Association.........................     5
Paul Grant, Father of Son With Type 1 Diabetes, New Gloucester, 
  Maine..........................................................     6
Lois Ondik, Retiree, Blandon, Pennsylvania.......................     9
Jeremy A. Greene, M.D., Ph.D, Professor of Medicine and the 
  History of Medicine, Johns Hopkins University..................    10

                                APPENDIX
                      Prepared Witness Statements

William T. Cefalu, M.D., Chief Scientific, Medical and Mission 
  Officer, American Diabetes Association.........................    34
    Chart submitted by Dr. Cefalu................................    41
Paul Grant, Father of Son With Type 1 Diabetes, New Gloucester, 
  Maine..........................................................    42
Lois Ondik, Retiree, Blandon, Pennsylvania.......................    43
Jeremy A. Greene, M.D., Ph.D, Professor of Medicine and the 
  History of Medicine, Johns Hopkins University..................    45

                  Additional Statements for the Record

Closing Statement, Senator Robert P. Casey, Jr., Ranking Member..    58
Closing Statement, Senator Richard Blumenthal....................    58
Chart submitted by Senator Susan M. Collins, Chairman............    59
Sabrina Burbeck, Family with Type 1 Diabetes, Old Town, Maine....    60
Gail DeVore, Type 1 Diabetic, Denver, Colorado...................    60
Clayton McCook, Daughter with Type 1 Diabetes, Oklahoma City, 
  Oklahoma.......................................................    60
Patients for Affordable Drugs (P4AD).............................    61
Endocrine Society................................................    62
T1International..................................................    67
American's Health Insurance Plans (AHIP).........................    70

 
     INSULIN ACCESS AND AFFORDABILITY: THE RISING COST OF TREATMENT

                              ----------                              


                          TUESDAY, MAY 8, 2018

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
room SD-562, Dirksen Senate Office Building, Hon. Susan M. 
Collins (Chairman of the Committee) presiding.
    Present: Senators Collins, Tillis, Fischer, Casey, 
Gillibrand, Blumenthal, Donnelly, Warren, Cortez Masto, and 
Jones.
    Also present: Senator Shaheen.

    OPENING STATEMENT OF SENATOR SUSAN M. COLLINS, CHAIRMAN

    The Chairman. The hearing will come to order.
    Good morning. When a team of three scientists at the 
University of Toronto discovered insulin in 1921, they 
revolutionized the treatment for diabetes, transforming it from 
a debilitating and ultimately fatal disease, to a manageable 
chronic condition. The scientists sold the patent for $1 each 
to the university, a move intended to ensure that those in need 
would always have affordable access. They explicitly stated 
that profit was not their goal.
    Yet the cost of insulin has soared in recent years. In 
2013, more was spent on insulin than on all other diabetes 
medications combined. In a new report to be released today, the 
American Diabetes Association notes that between 2002 and 2013, 
the average price of insulin nearly tripled.
    More than 30 million Americans live with diabetes, 
including one out of four seniors. In Maine, there are more 
than 137,000 people living with this condition--roughly 11 
percent of our population.
    Untreated, diabetes can lead to vision problems, nerve 
damage, kidney failure, heart disease, stroke, and ultimately 
death. Since 2015, diabetes has remained the seventh leading 
cause of death in the United States, claiming nearly 80,000 
lives last year.
    Fortunately, diabetes is treatable. Improving diabetes 
treatment has long been one of my top priorities since I 
founded the Senate Diabetes Caucus in 1997, and I have invited 
my co-Chair, Senator Jeanne Shaheen, to join us here today, and 
she will be here shortly.
    For those living with type 1 diabetes, in which the body 
loses its ability to produce insulin, treatment requires life-
long insulin administration. Five percent of adults diagnosed 
with diabetes have type 1, and in children and youth with 
diabetes, this type accounts for the majority of cases. Those 
with type 1 diabetes depend on insulin to survive and manage 
their disease. Insulin is also critical for many older 
Americans with type 2 diabetes.
    For some people with type 2, lifestyle changes and non-
insulin medications can allow them to manage their diabetes; 
however, approximately a third of those with type 2 require 
insulin.
    Medical costs for Americans with diabetes are more than 
double those incurred by individuals without diabetes. The 
disease costs our Nation a total of $327 billion per year; one 
out of three Medicare dollars goes to treating people with 
diabetes.
    Insulin is one of the most expensive categories of drugs 
purchased by private payers and government health care payers. 
People with diabetes who use insulin, particularly those with 
type 1, need this medication every day in order to live. It is 
a matter of life or death.
    The rising cost of insulin presents a barrier to care for a 
growing number of Americans with diabetes. We have heard 
stories from people across the country who have had to ration 
or skip doses altogether to make their insulin supply last 
longer. Some have sought medication from other countries, while 
others have turned to the black market. Still others have 
raised funds for their insulin using the Internet. These 
measures can result in major risks that can compromise health 
and even life.
    While the prescription drug market, and the insulin market 
specifically, is opaque to virtually everyone involved, one 
fact is clear: The patients are not getting the best deal. The 
price for a vial of Humalog increased from $21 in 1996, to $35 
in 2001, to $234 in 2015, to $275 in 2017. Today we will hear 
testimony from one of my constituents who paid more than $320, 
out-of-pocket, for the same product last year. And that was 
even after using a coupon. This chart, which my staff compiled 
using publicly available price data, illustrates this 
disturbing trend.
    [The chart can be found in the Additional Statements for 
the Record, page 59.]
    As list prices have increased, so too have out-of-pocket 
costs. For Medicare Part D beneficiaries, out-of-pocket costs 
increased by 10 percent per year between 2006 and 2013, 
outpacing overall inflation, medical care service costs, and 
spending on prescription drugs in general. For those without 
insurance, the costs are untenable. The cost of a single vial 
can be more than $300, and some patients need more than one 
vial per month to effectively manage their disease.
    Insulin products have changed since 1921. Early versions of 
insulin were produced from purified animal extracts, and 
scientists worked to improve duration and purity. In the late 
1970's, the discovery of recombinant technology led to the 
approval of the first synthetic human insulin in 1982, which 
better mimicked human insulin and reduced allergic reactions. 
Continued improvements through the use of recombinant 
technology resulted in the development of insulin analogues 
with modified chemical structures and improved physiological 
effects.
    Insulin analogues have provided greater flexibility in 
administration and have allowed many patients to better manage 
their conditions, especially those with type 1 diabetes and 
those prone to having low blood sugar. However, as more 
products entered the market, prices began to increase 
significantly, even for the older versions of the insulin. The 
use of higher-priced analogues has grown, while the use of 
lower-priced human insulins has declined, even though for many 
patients, clinical efficacy among the various products is not 
markedly different.
    I have previously expressed my concern with a practice 
called ``evergreening.'' This means when pharmaceutical 
companies obtain patents based on small innovations to extend 
the exclusivity of a product after its initial patent expires. 
For insulin, a careful look is warranted to determine if minor 
modifications were used to just extend the patent protections 
and discourage competitors.
    In the face of skyrocketing costs of newer versions of a 
time-tested therapy, too many consumers find themselves without 
affordable alternatives and find that they are paying more each 
year.
    Last Congress, this Committee conducted a bipartisan 
investigation into the sudden, dramatic price increases of 
certain decades-old prescription drugs. At the end of our 
investigation, we published a report documenting cases in which 
companies that had not invested a dollar in the research and 
development of a drug nevertheless hiked its price to 
unconscionable levels.
    In February, this Committee examined why prices have soared 
for drugs used to treat rheumatoid arthritis. Today we continue 
our study of drug pricing as we examine why the price continues 
to climb for insulin, a life-saving drug for so many Americans.
    Far too many individuals and families are familiar with the 
devastating toll diabetes has taken on people of every age, 
race, and nationality. The cost of a drug that is approaching 
its 100th birthday should not add to that burden.
    I now would like to turn to our Ranking Member, Senator 
Casey, for his opening statement and express my appreciation to 
the members who have joined us today.

  OPENING STATEMENT OF SENATOR ROBERT P. CASEY, JR., RANKING 
                             MEMBER

    Senator Casey. Chairman Collins, thank you very much for 
holding this hearing today. I am pleased that we were able to 
invite your co-Chair of the Diabetes Caucus, Senator Shaheen, 
to participate in our hearing. And we are grateful to be 
examining this subject today.
    An estimated 30.3 million Americans are living with 
diabetes. Also, eighty-six million Americans have prediabetes, 
and that number that have that circumstance do not even know 
they have it in many instances.
    In my home State of Pennsylvania, 12.8 percent, or 1.4 
million people, just in Pennsylvania--and that is of the adult 
population--have a diagnosis of diabetes as of 2014.
    We know there are many complications associated with it, 
including heart disease, stroke, kidney disease, blindness, and 
even death.
    In Pennsylvania alone, diabetes and prediabetes cost an 
estimated $13.4 billion a year. One state, $13.4 billion. That 
includes the cost of physician visits, hospital care, and, yes, 
the cost of prescription medication like insulin.
    Indeed, even with advancements in medication and 
technology, treatments can oftentimes be out of reach for our 
loved ones. That is unacceptable. No senior should have to go 
without life-saving medication.
    I am pleased to say that Congress did take steps to make 
coverage more affordable through the Affordable Care Act--by 
expanding Medicaid, by closing the Medicare prescription drug 
coverage gap--known as the ``donut hole''--and by providing 
preventative care at no cost. We must continue to protect and 
strengthen the Affordable Care Act. And we must keep the 
promise that Congress made to the American people that Medicare 
and Medicaid will be there, always will be there, when they 
need it.
    But our work is not done. As we hear from our witnesses 
today, there is not one policy that will address the rising 
cost of prescription drugs, especially in the context of 
seniors. The price of insulin has tripled between 2002 and 
2013, just 11 years. There is more we can and should be doing 
to shield patients from sky-high costs.
    It is for this reason that I am so pleased that we are 
having this hearing today and that Chairman Collins and I had 
the chance to participate in hearings in the Health, Education, 
Labor, and Pensions Committee. We have aired issues and policy 
recommendations, but now we must act to address the cost of 
prescription drugs.
    The President will soon speak on this topic. He has 
indicated that he, too, recognizes that more needs to be done. 
The time is now for both bold leadership and bipartisanship. 
Access to affordable prescriptions, like insulin, is a matter 
for so many Americans of literally life and death.
    I look forward to our discussion today. Thank you, Chairman 
Collins.
    The Chairman. Thank you very much, Senator Casey. We will 
now turn to our panel of witnesses.
    First we will hear from Dr. William Cefalu, the chief 
scientific, medical, and mission officer of the American 
Diabetes Association. Dr. Cefalu served as the chair of the 
working group convened by the ADA to conduct a comprehensive 
study of the insulin affordability problem and to provide the 
ADA and policymakers with advice and guidance. Today he will 
announce the release of that report.
    Next we will hear from Paul Grant, a father from New 
Gloucester, Maine, whose son Solomon was diagnosed with type 1 
diabetes at the age of 9. Paul will discuss his experience 
caring for a son with diabetes and the challenges that he faces 
affording the insulin that his son requires.
    I will now turn to our Ranking Member to introduce our 
witness from Pennsylvania.
    Senator Casey. Thank you, Chairman Collins. We are grateful 
to all of our witnesses. I have the pleasure to introduce Lois 
Ondik from Blandon, Pennsylvania. Ms. Ondik is a grandmother, a 
mother, and has a foster dog named ``Murfee.'' I have not seen 
Murfee yet, but I am sure we will have a chance to meet.
    Five years after a diagnosis of diabetes, Lois found 
herself struggling to manage her condition. By happenstance, 
she saw an advertisement for a diabetes self-management program 
at her local grocery store. The rest is history. She will tell 
us about the class she took through her local Area Agency on 
Aging. Lois is joined today by Martha Sitler, one of the 
instructors from her diabetes self-management class. That class 
has saved her thousands of dollars in medication costs. Not 
only that, I understand that Lois and Murfee are now exercising 
every day and walking two and a half miles every single day. By 
all accounts, her class has been life-changing, as Lois will 
share.
    So, Lois, we are grateful you are here. Thanks for making 
the trip from Pennsylvania.
    The Chairman. And, finally, I am pleased to introduce Dr. 
Jeremy Greene. Dr. Greene is a professor of medicine and the 
history of medicine at Johns Hopkins University. He treats 
patients at a community health center in Baltimore as well. Dr. 
Greene will discuss his experience treating patients with 
diabetes as well as his research on the history of insulin and 
competition in the market.
    We welcome all of you for joining us, and we are going to 
start with Dr. Cefalu.

STATEMENT OF WILLIAM T. CEFALU, M.D., CHIEF SCIENTIFIC, MEDICAL 
       AND MISSION OFFICER, AMERICAN DIABETES ASSOCIATION

    Dr. Cefalu. Good morning. Thank you, Chairman Collins, 
Ranking Member Casey, and distinguished members of the Senate 
Special Committee on Aging for the opportunity to discuss 
insulin affordability. As you know, more than 30 million 
Americans have diabetes, and approximately 7.4 million of them 
rely on insulin. For millions of people with diabetes--
including everyone with type 1 diabetes--access to insulin is a 
matter of life and death. There is no medication that can be 
substituted for insulin. As the leading organization whose 
mission is to prevent and cure diabetes and improve the lives 
of all of those affected by diabetes, the American Diabetes 
Association believes that no individual in need of insulin 
should ever go without it due to prohibitive costs.
    In 1921, Canadian scientists Frederick Banting and Charles 
Best discovered insulin, revolutionizing diabetes care and 
making it possible for patients to live with the disease. Along 
with their partner, James Collip, Banting and Best sold the 
patent to the University of Toronto for $3 to ensure affordable 
insulin for all who needed it. Further discoveries have 
resulted in new formulations of insulin, advancing from the 
animal insulin to the human insulin, and in the 1990's to the 
human analogues. In recent years there have been fewer 
advancements in insulin formulations, yet the prices continue 
to rise, even for the off-patent insulins.
    Between 2002 and 2013, the average price of insulin nearly 
tripled, causing patients' out-of-pocket costs to rise and 
creating a tremendous financial burden for many with diabetes 
who need insulin.
    In November 2016, the ADA Board of Directors unanimously 
passed a resolution calling on all entities in the insulin 
supply chain, including manufacturers, wholesalers, PBMs, 
insurers, and pharmacies, to substantially increase 
transparency in pricing associated with the delivery of insulin 
and ensure that no person with diabetes is denied affordable 
access to insulin. The resolution also called upon Congress to 
hold hearings with all entities in the supply chain to identify 
the reasons for the dramatic increases in insulin prices and 
ensure that all people who use insulin have affordable access 
to the insulin they need.
    In concert with the board resolution, the ADA initiated a 
grassroots petition calling for the same actions. Over 311,000 
people have signed this petition, making it the largest 
collection of signatures on an ADA petition to date. The ADA 
has also collected 800 stories of people with diabetes, 
caregivers, and health care providers who are directly burdened 
by the increasing costs of insulin.
    For example, we heard from Michael, who reported paying 
over $700 a month for the insulin he needs to stay alive. That 
cost is 59 percent above his monthly mortgage payment and 143 
percent above his monthly insurance premium, a substantial 
financial burden for him or, for that matter, for many 
Americans.
    As a physician and a clinician scientist, I have witnessed 
firsthand how the incredible research advances and the 
innovative therapies resulting from investment in biomedical 
research have dramatically improved the lives of those with 
diabetes. However, I have also observed that the incredible 
innovation may not benefit those who are not able to access and 
afford such treatments. This became even more apparent to me 
when I joined the ADA as the chief scientific, medical, and 
mission officer in February of last year, where I have had the 
vantage point to appreciate more fully the daily struggles of 
individuals with diabetes through their stories.
    In the spring of 2017, the ADA Board of Directors 
established an Insulin Access and Affordability Working Group 
to ascertain the full scope of the problem and to advise the 
ADA on the execution of strategies to lower the cost of 
insulin. Throughout 2017 and into 2018, the working group held 
discussions with over 20 stakeholders throughout the supply 
chain to discuss how this complex and complicated system 
impacts the out-of-pocket costs for individuals with diabetes. 
The final product is a white paper which will be released 
online today outlining what we have learned from existing 
public information and our interview process.
    The conclusions and recommendations of the working group, 
to be released today, are only a starting point. Beginning with 
increased transparency within the supply chain, every 
stakeholder must work toward a common goal, and that goal is to 
ensure affordable insulin is within reach for all who need it.
    Again, thank you, Chairman Collins, Ranking Member Casey, 
and all the members of the Committee for convening such a 
hearing on this critical issue today. The ADA looks forward to 
working with you and every stakeholder in the insulin supply 
chain on strategies to lower the rising costs of insulin.
    The Chairman. Thank you very much, Doctor.
    Mr. Grant, welcome.

 STATEMENT OF PAUL GRANT, FATHER OF SON WITH TYPE 1 DIABETES, 
                     NEW GLOUCESTER, MAINE

    Mr. Grant. Good morning. Thank you, Senator Collins, 
Ranking Member Casey, and members of the Senate Aging 
Committee. It is a privilege and an honor to be here to testify 
today.
    My name is Paul Grant. I am a father of four children: 
Oliver, 18 years old; Jordan, 16; Solomon, 13; and Levi, 11. We 
live in the small community of Gray-New Gloucester, Maine, and 
I would describe us as an active family. We play a lot of 
sports: basketball, baseball, soccer, football, lacrosse, 
softball. We are usually on a field or in a gymnasium most 
days. My children mean the world to me, and I love coaching 
them and watching them play.
    At the end of January in 2014, my son Solomon became very 
ill. For at least a week, he laid on the couch with flu-like 
symptoms. He was very lethargic, had stomach pain, grayish pale 
color, noticeably thinner, and he had glossed-over eyes. His 
mother had taken him to the doctor's, but we were told he had 
the flu and it would just run its course. We treated him with 
ibuprofen and Tylenol and made sure he drank lots of fluids. 
But Sol's condition did not improve. In fact, it only appeared 
to only get worse.
    I was coaching youth basketball the day I got a call from 
Solomon's mother, and she was sad and upset. Sol was still very 
ill, and she decided that she would take him to the ER at St. 
Mary's Hospital in Lewiston, Maine.
    My other three kids and I left basketball. We met her at 
the ER. And when I arrived, Sol was on a gurney, hooked up to 
an IV, surrounded by nurses. And the on-call doctor eventually 
came in and looked at us and said, ``Your son has type 1 
diabetes.'' His blood sugar that day was over 800. This was 
more than 4 years ago now, but I can remember this day like it 
was yesterday. You can imagine the feelings his mother and I 
experienced when we heard the words, ``Your son has type 1 
diabetes.''
    Our son has a disease. We experienced feelings of sadness, 
confusion, fear, astonishment, and bewilderment, just to name a 
few. The three of us spent that weekend in the ICU, and our 
lives were forever changed.
    Today Sol is 13 years old and a seventh grade student at 
Gray-New Gloucester Middle School. At his school there are 
several students that share that same disease of diabetes, and 
the school system does really a pretty good job at helping 
these students manage their disease. Besides going to the 
nurse's office several times a day to check his blood sugar and 
carrying around a diabetes bag, things are pretty normal for my 
13-year-old boy. He has a good group of friends, he has great 
teachers, and he loves playing basketball. As long as he has 
insulin and checks his blood sugar regularly, he manages it 
pretty well.
    I work for a small general contracting company, Wally J. 
Staples Builders, Incorporated, in Brunswick, Maine. and we 
build new homes, additions, and garages. And we complete many 
interior and exterior renovations, anything to do with 
construction. My job is I am a project estimator. I absolutely 
love my job, and I have had the opportunity to work on 
thousands of construction projects over the years. 
Unfortunately, like many small businesses, my employer does not 
provide health insurance, so I purchase it for myself and my 
children through the marketplace, which is very expensive and 
very complicated. I pay a high deductible to keep my monthly 
premium lower. So, consequently, I end up paying a lot out-of-
pocket for necessary supplies for Solomon, approximately 
$2,500.00 last year just on insulin supplies and diabetic 
supplies, and I will have spent close to $15,000 for health 
care for 2017.
    Solomon needs two types of insulin: Humalog and Lantus. In 
2017, I would typically pay $300 for a 90-day supply of Humalog 
through Express Scripts and $150 for a 90-day supply of Lantus. 
This seemed like a lot--until this past January when I called 
to refill Solomon's Humalog prescription, and it was going to 
be $900 for a 90-day supply. Nearly $1,000 for medicine that 
Solomon absolutely needs to be alive and about three times more 
than what I had been paying. So I kind of went into panic mode 
as I was low on Humalog, and I needed to get it as soon as 
possible. I tried to get answers from my insurance company, and 
it was difficult, hard to get any help with that. I do not 
think they understand our health plan. I know I do not.
    I ended up purchasing a 30-day supply at Walmart to get me 
by until I could figure things out. That 30-day supply cost me 
$322, and that included a coupon. But I had no choice. I had to 
have insulin for my son.
    No father ever wants to see what would happen if you run 
out of insulin for your child with type 1. I remember Sol's 
state in the week that he was first diagnosed, when his body 
first stopped producing insulin on its own, and I know I have 
to do whatever to make sure he has insulin. I have purchased it 
on a credit card. I have borrowed insulin from friends.
    So when I saw that the price had hiked to nearly $1,000 for 
a 90-day supply, I knew it was something I could not afford. 
And I spent several hours and days reaching out to friends in 
the diabetic community looking for an affordable option. 
Ultimately, I found a pharmacy in Canada where I could purchase 
a 90-day supply of Humalog for $294, and that included a $50 
shipping fee. And this is with no contribution from my 
insurance company. That was January 22d, and I just refilled 
that prescription the beginning of April with the same pharmacy 
in Canada. Last week, I checked with Express Scripts to see how 
much a 90-day prescription would be for Solomon's Humalog, and 
it would cost me $1,489, and that is with my insurance.
    As I mentioned, I help people build houses for a living. I 
am good at my job. I can tell you very accurately how much it 
would cost to build a new home or put an addition on your home. 
But I cannot tell you how much it is going to cost from month 
to month to buy insulin, which I need to keep my son healthy.
    I just do not understand why insulin for children with type 
1 diabetes is so expensive and why I can purchase it in Canada 
for so much less. We are just talking about the cost of insulin 
today, but there are many other things like insulin pumps and 
glucose monitors out there that would make children's lives and 
parents' lives so much easier if they were more affordable.
    Thank you again for the opportunity to appear before you 
today to share our story. I would be happy to answer questions.
    The Chairman. Thank you very much, Mr. Grant, for sharing 
your experience.
    Ms. Ondik

               STATEMENT OF LOIS ONDIK, RETIREE,
                     BLANDON, PENNSYLVANIA

    Ms. Ondik. Chairman Collins, Ranking Member Casey, and 
members of the Committee, thank you for inviting me here today. 
It is an honor to be here.
    My name is Lois Ondik. I am 73 years old and a resident of 
Blandon, Pennsylvania. I have three children and two 
grandchildren. I am a retired school bus driver for the Berks 
County Intermediate Unit.
    Five years ago, my doctor diagnosed me with type 2 
diabetes. At that time my doctor wanted me to start on 
medication to help manage my blood sugar and A1C. A1C measures 
the amount of hemoglobin in the blood that has glucose attached 
to it, and an A1C level of 5.7 percent is considered normal. An 
A1C of 5.7 to 6.4 is pre-diabetes and 6.5 and over is type 2 
diabetes. Five generations of my family have been diagnosed 
with diabetes, myself being the fifth generation, and now my 
daughter has just been diagnosed with pre-diabetes, making her 
the sixth generation. I understand the toll that it can take on 
both your body and finances, and I was concerned about the side 
effects of medications, and I knew that the cost of medication 
would likely eat into my budget and my savings. So I insisted 
on trying to manage my condition on my own, without medication. 
And for a while, I was able to do so.
    During a recent visit with my doctor, I was again told that 
my blood sugar and A1C levels would soon require me to begin 
taking medication. And so, again, I thought to myself that 
there had to be another option.
    Then I saw an advertisement for a diabetes self-management 
program through Berks Encore, my local Area Agency on Aging, 
hanging on the bulletin board at my local grocery store. I 
ended up registering for the diabetes self-management class. I 
did not know what the class would be about when I signed up, 
but knew that I needed to manage my diabetes better or face the 
bills and side effects associated with medication.
    The class was a blessing. We met once a week for two and a 
half hours for 6 weeks, and it was run by two trained leaders, 
and one of my leaders, Martha Sitler, joins me here today.
    My classmates were at different levels in their disease, 
including those with a new diagnosis, people managing with 
metformin medication, and people on insulin. I met a woman who 
used an insulin pump and another who was struggling to manage 
her blood sugar, even with insulin. Meeting them, learning 
about the side effects, and knowing how costly the medications 
can be affirmed my resolve to manage my diabetes on my own for 
as long as possible.
    The class is evidence-based, so I know that I learned about 
techniques to deal with the symptoms of diabetes that really 
work. We discussed how to deal with emotions and stress 
management and also talked about foot care, exercise, healthy 
eating, and many other topics, especially how to talk to our 
doctors.
    Before these classes, I did not regularly test my blood 
sugar, but I started to once I joined the diabetes self-
management program. I also tracked everything I ate and learned 
how food and exercise affected my blood sugar. The class helped 
me understand the amount of food I need per day, including how 
to balance protein, carbohydrates, and fats to better control 
my blood sugar.
    At the end of every session, each individual created an 
action plan, something they wanted to accomplish before the 
next class. For example, I wanted to start exercising. My plan 
was to start low and slow, to exercise 15 minutes per day, 3 
days a week. The following week we were accountable to our 
classmates and had to report on how we did. Sometimes it is 
hard to accomplish every goal you set, but being accountable to 
my classmates helped me reach my goal. I found the peer-to-peer 
support to be very important. The class was eye-opening, to say 
the least.
    After my diabetes self-management program ended, I joined a 
free walking class entitled ``Walk with Ease,'' sponsored by 
the Arthritis Foundation of Berks County. The program is 
presented by Martha Sitler and Kathy Roberts of Berks Encore, 
my local Area Agency on Aging. Today my foster dog, Murfee, and 
I walk every day, and I use two pedometers to track my 
activity. I went from zero exercise to more than 2.5 miles per 
day. I think of the walking class as an extension of the 
diabetes self-management program because of how important 
exercise is in managing my disease.
    I am pleased to say that since starting my class, I lost 13 
pounds and lowered my A1C two-tenths of a point. In fact, the 
doctor told me that had my A1C moved two-tenths of a point in 
the opposite direction, she would have insisted I start taking 
medication. That is when it all fell into perspective. I knew I 
had the ability to manage my diabetes on my own; I just needed 
the right tools.
    The diabetes self-management program did just that. It gave 
me the tools I need to manage my diabetes, and now I use those 
tools to live a healthy life. I even told my doctor about the 
course and recommended that she tell her patients about it. I 
am now able to manage my disease through lifestyle changes 
instead of having to purchase expensive medications and 
supplies like insulin.
    I believe it is important for people to have access to 
supports to prevent or better manage their diabetes, and that 
can help them avoid paying for high-cost medications. I am 
concerned about the rising cost of medications across the board 
because it puts treatment out of the reach of some people.
    Again, thank you for the invitation to testify before the 
Committee, and I look forward to answering your questions. 
Thank you.
    The Chairman. Thank you very much. I congratulate you for 
what you have been able to do. Your situation is, of course, 
different from someone who has type 1 diabetes who has no 
choice but to use insulin, no matter how healthy a lifestyle 
they may have, or that one-third of adults with type 2 are 
insulin-dependent. But I certainly congratulate you for the 
steps you have taken.
    Ms. Ondik. Thank you.
    The Chairman. Dr. Greene.

   STATEMENT OF JEREMY A. GREENE, M.D., PH.D., PROFESSOR OF 
 MEDICINE AND THE HISTORY OF MEDICINE, JOHNS HOPKINS UNIVERSITY

    Dr. Greene. Thank you. Chairman Collins and Ranking Member 
Casey, thank you so much for calling attention to this vital 
matter. And if I may for a moment, I would also like to thank 
Mr. Grant and Ms. Ondik for being willing to share your 
personal testimonies as both patients and caregivers.
    I speak as an individual and not on behalf of Johns Hopkins 
University, but the affordability of life-saving medicines has 
been a subject of central concern to my own career, both as a 
historian of the pharmaceutical industry and an internist in an 
inner-city community health center in East Baltimore. No single 
issue exposes the tragedy and absurdity of our inability to 
provide 20th century cures to patients in the 21st century as 
does the increasing unaffordability of insulin for Americans 
living with diabetes today.
    As you know, diabetes affects more than 9 percent of the 
U.S. population, more than 30 million Americans as of 2015. For 
the million or so Americans with type 1 diabetes, insulin is an 
absolute requirement for survival. Since their bodies no longer 
produce this vital hormone, without access to a pharmaceutical 
version they die preventable deaths. Of the larger proportion 
of Americans living with type 2 diabetes whose bodies are no 
longer responsive to the insulin they do produce, some can 
manage their illness with lifestyle measures such as dietary 
change, exercise, and weight loss. Most, however, require 
treatment with one or more oral medications in order to prevent 
the many serious long-term complications that type 2 diabetes 
brings: blindness, stroke, heart disease, kidney failure, loss 
of limbs, coma, and death. For many of these patients, oral 
medications are not enough. Roughly one out of every four 
patients with type 2 diabetes--and, Madam Chairman, the new 
statistic of one out of every three will require insulin. For 
more than 7 million Americans, this drug is a necessary tool to 
avoid preventable loss of life and limb.
    Controlling diabetes with insulin is not easy. There are a 
number of social, biological, economic, psychological, and 
structural factors that complicate the ability of individual 
patients to manage their diabetes. Yet until recently, the cost 
of insulin--a drug first patented in 1923--was not considered 
to be part of that problem. But over the past decade in my 
clinic, when I have asked my patients why they are not taking 
their insulin as prescribed, I increasingly heard the cost of 
medicine itself was becoming prohibitive. I thought perhaps the 
problem was that I was prescribing the wrong insulin, the 
expensive newer versions, when really I should prescribe the 
cheaper older generic versions. And I was surprised to learn 
that this thing, ``generic insulin,'' simply did not exist. All 
insulin for sale in the United States in 2015 came from one of 
three brand-name manufacturers--Eli Lilly, Sanofi-Aventis, and 
Novo Nordisk--who control 99 percent of the nearly $27 billion 
global insulin market by volume, even though none of the main 
agents used are protected by patents anymore.
    In a recent survey, more than one out of four type 1 
diabetics admitted to rationing insulin at least once due to 
cost in the past year. More than half of them had rationed 
insulin monthly, weekly, or even daily. A colleague of mine 
found the same proportion for her type 2 diabetes clinic. One 
in four rationed or withheld insulin the past year due to cost.
    By some reports, the price of insulin products have 
increased more than 270 percent in the past decade. Eli Lilly's 
Humalog was $21 a vial when first introduced in 1996, but by 
2017 cost $275 for a month's supply. And these dramatic 
increases, as we have heard, have real consequences for 
Americans living with diabetes who face increasingly untenable 
choices between insulin and other necessary expenses of daily 
life.
    Now, I do not mean to suggest that the short-acting agent 
Humalog or the long-acting agent Lantus do not represent true 
innovations compared to the original pork or beef insulins of 
the 1920's. No doubt for many patients these innovations are 
worth the added price. What is surprising, however, is that the 
trailing edge of old insulin products has not become a market 
for generic competition, instead becoming a set of obsolete 
products that have been removed from the market.
    On the whole, it is hard to say that a patient in 2018 who 
cannot afford their insulin, let alone the array of patent-
protected glucometers and test strips or pumps used to titrate 
it, is better served by having the option--only having the 
option of marginally more effective agents compared to the 
quite effective versions that could have been generically 
available as of 1968 or 1988 or 2008 had a cheaper generic 
competitive market appeared when patents expired.
    Preserving access to insulin is not a Democratic or a 
Republican issue. But we will make no progress unless we can 
understand why the insulin market is still limited to only 
three players, how insulin prices are actually determined. 
Congress alone holds the power to illuminate how the hidden 
pieces in the puzzle of drug pricing actually fit together. 
Only Congress has the power to follow the molecule through all 
the steps from production to consumption and understand where 
exactly this market is being distorted to provide evidence that 
will lead to a true and lasting solution.
    As this Special Committee did just a few years ago when 
confronted with the problem of rising prices of off-patent 
drugs, I urge you to find continued space for bipartisan 
investigation into this issue affecting millions of Americas.
    Thank you for the opportunity to speak today.
    The Chairman. Thank you very much, Dr. Greene.
    Mr. Grant, I want to start with you. I was really struck by 
your comparison of the fact that when you are on a job, you 
give a concrete estimate to your customers of how much the cost 
is going to be of the project. But when you go to fill a 
prescription for insulin for your son, you have no idea what it 
is going to be. It just keeps going up and up and up.
    You testified that ultimately you switched to an 
alternative method of obtaining Humalog because you just could 
not afford to pay nearly $1,000 every 90 days for a therapy 
that your son is going to need for the rest of his life. And 
you are now purchasing it from Canada. Could you tell us what 
the cost comparison is between the same insulin that you are 
getting from Canada versus what you were paying in this 
country?
    Mr. Grant. Yes, so to get the same exact medicine, the 
Humalog in a KwikPen form, a 90-day supply, in January it was 
$294. That was still true at the beginning of April when I 
ordered my second--when I refilled the prescription. And so the 
crazy thing was in January, when I tried to get it through 
Express Scripts through my insurance company, it was $900. And 
then just as a little test, last week I called Express Scripts 
just to check again, you know, what this would be if I was to 
buy it today. And so even from January to last week, it had 
gone up from $900 to $1,489. We are talking about the same 
medicine. As Dr. Greene mentioned, there are only three people 
that make insulin. So it would be great if there was something, 
you know, more available right here in our own country.
    The Chairman. And when you buy it from Canada, does it 
count toward your deductible for your insurance?
    Mr. Grant. No.
    The Chairman. So that is another problem for you, too, 
isn't it?
    Mr. Grant. Right. So not being able to pay down my 
deductible, it kind of hurts there as well.
    The Chairman. Dr. Cefalu, I want to put up a chart that was 
in your report that looks at the supply chain. And if it looks 
complicated and obtuse, it is because it is. It just seems 
unacceptable that a drug first discovered in 1921, despite the 
improvements in duration and purity, has increased in price so 
significantly in recent years and that the price continues to 
climb.
    [The chart can be found in the Additional Statements for 
the Record, page 41.]
    But when we look at the insulin supply chain--and, Dr. 
Greene, I am going to ask you to comment on this as well--we 
see this intricate web of transactions that move medicines and 
money from manufacturers, wholesalers, distributors, pharmacy 
benefit managers, insurance providers, private payers, 
government payers, finally to the consumer. And when we wrote 
to the three manufacturers, they all claim that they are not 
really benefiting from the increase in price, that their net 
price is approximately the same. Yet we see this enormous 
tripling, on average, according to the ADA, increase in the 
cost of this essential insulin.
    So what is going on here? Who is making the money that is 
causing these enormous price increases? And are the 
manufacturers correct when they say, ``We are not the ones. Our 
net price is relatively stable over time''? Dr. Cefalu first 
and then Dr. Greene.
    Dr. Cefalu. Thank you, Senator. You are absolutely correct. 
When we went into this exercise, we wanted to get clarity on 
the situation. What we found, when you look at the chart, it is 
complex and complicated. What we are finding is a system of 
opaque negotiations where there is a flow of money that we do 
not quite understand. We really do not understand where the 
profits lie. We think there are incentives at every level of 
the supply chain that facilitate or even encourage a high list 
price from the manufacturers to the wholesalers to the PBMs to 
the health plans.
    The problem is that none of these savings and profits are 
flowing back to the vulnerable patient, and particularly when 
you talk about the list price going up, the person who is 
really exposed is the uninsured patient. He has to pay the list 
price. But our understanding, or lack of understanding, of the 
system is that negotiations are private. We do not understand 
what goes on between a manufacturer and a PBM. We do not 
understand the level of the rebate. We do not understand from 
the PBM to the health plan where this rebate goes. And for that 
matter, again, at the point of sale, this is the problem, that 
the patient, particularly the underinsured and the most 
vulnerable patient are the ones that are subsidizing this 
system.
    The Chairman. I would say the uninsured plus those with 
high deductibles.
    Dr. Cefalu. Absolutely.
    The Chairman. Dr. Greene, I know my time has expired, but 
if you could quickly comment on that as well.
    Dr. Greene. Certainly. Thank you for this question, 
Senator. I think there are two ways of approaching this 
question, and one has to do with why did the chart get to be as 
complex as it is. As a historian, I can tell you that the chart 
did not get so complex in countries in Europe, for example, 
that had national health services as single payers that 
negotiated with the companies that produced insulin to actually 
produce more affordable products.
    The reason that the chart got so complex is the way that we 
have chosen to keep prices down involved the genesis of the PBM 
industry comes as an attempt to find a different solution to 
keeping drug prices down, and yet the product over time has 
been an involuted system in which attempts to look under the 
hood and figure out what part needs to be replaced or changed 
or tweaked leads to a form of stasis.
    The second part of the answer is to say in the present day 
actors, it is to everyone's advantage, to the pharmaceutical 
manufacturers, to the PBMs, to the insurers, to actually point 
at each other while list prices remain high. It is ultimately 
the patient, certainly the uninsured patient, many of whom I 
see in my clinic, and the taxpayer who ultimately is harmed by 
such a system. Actually exposing where the prices are 
increased, none of these individual actors are going to 
willingly actually provide this transparency.
    The Chairman. It is so opaque. It really is. Thank you.
    Senator Casey?
    Senator Casey. Thank you, Chairman Collins.
    I will start with Ms. Ondik and then go to Dr. Greene. Ms. 
Ondik, you mentioned in your testimony that after your diabetes 
diagnosis, type 2 diabetes, you wanted to manage your condition 
on your own because you were concerned both about cost and side 
effects, and we are, of course, pleased that you had success 
with that self-management.
    The Diabetes Association estimates that health care costs 
for Americans with diabetes are 2.3 times greater than those 
without, and from what you have heard today, what we have all 
heard, we know that insulin is very expensive for those, as Dr. 
Greene testified, 1.25 million Americans with type 1 diabetes.
    What would it mean to you if you had to pay anywhere 
between 150 to 250 bucks extra per month for medication like 
insulin?
    Ms. Ondik. Well, I am a single person, and I receive Social 
Security and a pension. If I had to pay the high price for 
insulin, I could not do it. I would have to work with my doctor 
to try to find another way to help me out.
    But I would say that Medicare, right now the price--I did 
look up one of them. I think it was NovoLog. And I think the 
retail price would have been $125 under the Medicare program, 
but my out-of-pocket cost would have been $95. And no offense 
to the two doctors that we have here today, but when you go to 
them and they write a prescription for you for the pharmacy, 
they have no idea how much you are going to actually pay when 
you get there. They know the product or the drug is going to 
help you in managing your disease, but they really do not have 
any idea, because everybody's insurance is different.
    Like I said, Medicare would be $95, and then Mr. Grant, 
what he is paying for the insulin for his son, even under his 
insurance, which is different than what I have, that is 
exorbitant. You know, it is really tough for those that have to 
put that out.
    But I would do like many other ones do. I would cheat. But, 
of course, on insulin you cannot do that. But I did have some 
medications already that were high-priced, and I cheated. I 
took them every other day.
    Senator Casey. Thank you.
    Dr. Greene, the American Diabetes Association report 
indicates that people on Medicaid, those who are lower-income, 
can access insulin with a cost of $1 to $5 out-of-pocket. I 
live in a state where the Governor signed legislation to expand 
Medicaid, thankfully. Seven hundred thousand people, more than 
700,000, have affordable coverage because of that act.
    This population, lower-income folks, is at greater risk for 
developing diabetes. We also know that 18 states have not 
expanded Medicaid. I imagine in your practice you have seen 
patients that have many barriers to accessing affordable health 
coverage and medications.
    Can you speak to how Medicaid specifically can take the 
cost out of the equation and remove barriers to receiving 
affordable and appropriate treatment?
    Dr. Greene. Thank you, Senator, for this question. It is 
extremely important to attend to this question of Medicaid 
expansion and also disparities in increased risk of diabetes 
and its complications in lower-income populations.
    I have certainly seen this firsthand in my clinic. The 
expansion of coverage has greatly potentiated the ability of 
practitioners like me who often treat underinsured patients, 
patients at or around the margin of the poverty line, the 
ability to reduce the out-of-pocket costs--and it is hard to 
overemphasize how a seemingly trivial cost, like a $20 cost a 
month or even a $5 cost a month for a prescription, can be an 
extraordinary barrier for someone living at the edge of 
poverty. But when we have conversations about insulin 
affordability, it is important for us not to assume a middle-
class insured norm for the American population.
    And, conversely, reducing the amount of those who are 
insured through expanded forms of coverage will have disastrous 
effects in the ability of practitioners like myself to help 
manage populations of patients with diabetes. The sensitivity 
to that out-of-pocket cost for the insulin-depending patient is 
extraordinarily important.
    So I think moving in both ways, the public health benefit 
of Medicaid expansion and the real risks of reduced coverage 
and increasing amounts of uninsured Americans, is something 
that I view with significant concern.
    Senator Casey. Thank you, Doctor.
    The Chairman. Senator Tillis.
    Senator Tillis. Thank you, Madam Chairman. I thank you all 
for being here.
    One question that I have really relates to state Medicaid 
programs. In your view, is there any view about states that are 
doing it particularly well in terms of treating the diabetes 
population that we can learn from? I am a management 
consultant. I am always looking for best practices. So one 
thing I am looking for is programs out there that we should be 
learning more about and trying to promote as part of a national 
sort of de facto standard.
    Dr. Cefalu. Senator, I do not know of any specific 
programs, but from the association we could look into that. We 
do know that Medicaid in general, just the access and 
affordability of insulin, has made a huge change, a huge 
improvement. So the Medicaid expansion as far as just access 
for those with diabetes has made a huge change. We would be 
happy after the hearing to look specifically into those state 
programs from the association to see which ones we could 
recommend.
    Senator Tillis. I think it would be helpful. I am also 
curious about--you know, I had a father-in-law who died 
ultimately from complications related to diabetes, and he was 
in a position to where he had the resources. He had a health 
care plan, but he just had chronic compliance issues, whether 
it was diet or any number of other things.
    What is the data on the base of people who have diabetes 
where the challenges are really related to just a personal 
choice or some other factor that is not letting them take 
advantage of the resources they have available?
    Dr. Cefalu. So when we talk about adherence and compliance, 
it is a very complicated issue. Most individuals who start on a 
medication, be it a hypertension medication or cholesterol 
medication, generally across the disease state, you may find 
that as much as fifty percent may quit taking that medication 
or reduce the medication within 6 to 12 months. Again, there 
are a number of factors, socioeconomic factors, and other 
determinants for that type behavior.
    For insulin, it is different. We are also seeing that cost 
sharing, the amount of money a person puts out for the insulin, 
will actually affect adherence. For a person with type 1, 
adherence is a real issue. Adherence is--they cannot go without 
the insulin. So what they do is they start rationing the 
insulin, or they will skip a few doses, and that will cause 
them acute complications--again, acute complications of blood 
sugar elevation, they may get dehydrated, if it is severe 
enough, a condition referred to as ``diabetic ketoacidosis,'' 
which requires hospitalization.
    If they do this over the chronic period and they do not 
maintain their A1C, as Lois has done, then in that situation it 
may lead to an increased chance of blindness and amputations 
and heart disease.
    So the adherence and compliance issue from cost sharing is 
a huge problem. But adherence and compliance issues in 
medication in general is an issue. It is just that there are 
unique needs of those with type 1 and for those with insulin, 
and that adherence is based on financial considerations, which 
is important and not a trivial matter.
    Senator Tillis. In terms of the future of treatment, are 
there any particularly expensive treatments, expensive at least 
on the face, that the science would suggest if you took a look 
at the fully burdened cost, it actually would save money over 
time because it is more likely to improve compliance or 
adherence? I am asking this question because I was with doctors 
on a completely different subject matter earlier this year, and 
there are very clearly treatments where either because the time 
between administrations of the drug are longer, so you improve 
compliance, is there anything on the horizon for the diabetes 
population that we should be aware of?
    Dr. Cefalu. We have a number--it is an exciting time for 
diabetes. We have a number of injectable medications that can 
be taken per week or longer, and this certainly improves 
adherence. But to improve adherence and reduce complications 
for an individual with diabetes, you have to give them the 
tools. And the tools are high-quality, low-cost insulin. They 
have to have access to technology to get the job done. And that 
would reduce the long-term complications. We know how to reduce 
complications. We have unbelievable medications. We have 
unbelievable technology that can get the job done.
    As I said in my opening statement, that technology, we have 
seen the recent advances and what it has done to morbidity and 
mortality to a lot of individuals in this country. But if you 
cannot access the innovation, then that population does not 
really benefit, and that is really the situation we talk about 
today. All the wonderful advances are fantastic, but if they 
are not in the hands of the person who can implement that 
technology or that medication, it is an issue.
    Again, Senator, we know what it takes to reduce the 
complications. We know what it takes. But not all individuals 
are at that point where financially they are able to access 
those medications.
    Senator Tillis. Thank you all.
    The Chairman. Thank you.
    Senator Cortez Masto?
    Senator Cortez Masto. Thank you. Thank you, Madam Chair and 
Ranking Member, for this important hearing. And thank you all 
for being here today.
    Dr. Cefalu, I could not agree with you more, your last 
statement. I never understood why we work so hard, we spend a 
lot of money to create a cure for acute diseases for 
individuals to save lives and then we price it out of their 
hands. The very people that we are creating the cure for, they 
cannot get the drug. That makes no sense to me. And so that is 
why my fight has been to address the high cost of prescription 
drugs in general and how we put them in the hands of 
individuals who actually need them and can afford them.
    In Nevada, we recently passed a diabetes drug transparency 
bill. It was passed last year, and it requires drug 
manufacturers to explain each factor that contributed to 
increases in the price of diabetes drugs, the percentage of the 
total increase attributed to each factor, and an explanation of 
the role of each factor in the increase. The bill would also 
require PBMs to disclose rebates negotiated with drug 
manufacturers and what rebates are distributed to insurers.
    Dr. Greene, I am curious what your reaction is to this 
transparency law, and Dr. Cefalu as well. And do you think that 
a national drug price transparency law similar to the one that 
Nevada has would help us understand why drug prices have become 
so high?
    Dr. Greene. Thank you for that question, Senator. I have 
been following with great interest the activity in the Nevada 
Legislature and also states across the country that have tried 
to understand where the state government can take up the cause 
of off-patent drug affordability and prescription drug 
affordability in general.
    In the State of Maryland, the Attorney General proposed a 
bill that became law last year making price gouging, 
unconscionable price hikes in off-patent prescription drugs, 
illegal and actionable. This was the law in the State of 
Maryland until just a few weeks ago when an appellate court in 
the Fourth Circuit ruled under the dormant commerce clause that 
it was unconstitutional, which is to say that the extent to 
which the state can successfully act to defend the interest of 
its consumers in not paying unconscionably high prices for 
prescription drugs, was limited to the scope of Federal 
activity.
    Now, that is being appealed by the Attorney General, and 
personally--it was a 2-to-1 vote. I actually think there is a 
really credible legal argument for that ruling to be overturned 
and for the law to be reinstated. But I am not a lawyer. I am a 
physician, and I think that right now it is the law of the land 
suggesting that this is an arena in which only the Federal 
Government--only Congress, really, can take the proper actions 
to help ensure a more transparent system and understanding why 
prices are increasing.
    I had high hopes for State initiatives, and I still do for 
the Nevada initiative. But the finding of this recent Fourth 
Circuit ruling has caused me to consider even more the 
importance of Congress taking up this issue.
    Senator Cortez Masto. I agree, and let me just say that the 
Nevada law as well is being challenged by the pharmaceutical 
industry, and it will go through the courts right now, and it 
will be in the Ninth Circuit. But it is a clear example of 
where the states are taking action to protect their residents 
and their individuals, because there is an issue that I think 
we all hear every time we go to our state, high-cost 
prescription drugs. Something has to be done to address this.
    I think that transparency in general, to shine a light on 
what is happening and why the costs are there and what is 
causing these high costs is so important to address the issue. 
So I appreciate your comments.
    Yes, Dr. Cefalu?
    Dr. Cefalu. So I appreciate that. We also believe, again, 
from this exercise, that it is transparency throughout the 
supply chain, not just one or two stakeholders. The entire 
stakeholder issue is opaque. It is complicated. And so we would 
support transparency throughout the chain, first and foremost.
    Transparency is not going to get the job done. That will 
shed a light on what the problems are, and then we can address 
long-term solutions.
    So, again, transparency all the way through the supply 
chain so we understand the flow of money, who is profiting, who 
is not profiting. But once again, at the end of the day, it is 
the patient at the point of sale who is not benefiting. I think 
that is the important thing to consider here.
    Senator Cortez Masto. I agree with you. Thank you.
    I notice my time is almost up. Thank you all again for this 
important discussion today. I appreciate it.
    The Chairman. Thank you very much. The law in your state 
sounds very interesting and worth pursuing.
    Senator Jones?
    Senator Jones. Thank you, Madam Chairman, and thank you for 
having this hearing, and to all the witnesses who came here. I 
come from a state where diabetes is especially acute in 
Alabama--9.4 percent of the population have that--but in 
Alabama it is over 15 percent, with another 37 percent with 
pre-diabetes.
    Unfortunately, I also come from a state that did not expand 
Medicaid, you know, which to me has always been penny-wise and 
extremely pound-foolish. But it is what it is down there.
    I was struck by a couple things. I want to go back to that 
chart that we showed a few minutes ago with that complicated 
web. There are a lot of drugs that people take on a daily 
basis. Do any of you know if there are any drugs--statins, beta 
blockers, or whatever--in which a similar chart would be done? 
Is this unique to insulin and diabetes drugs? Or is that common 
in the industry?
    Dr. Cefalu. Senator, I think we can say that this exercise 
and complicated pattern may apply across the drug-pricing 
industry. Specifically, we related it to insulin because of 
some of the aspects of the transactions that are unique to 
insulin which we wanted to focus on. But I could say in general 
some of the principles or many of the principles can be applied 
to drug pricing in general. It is many of the same players and 
mostly the opaque negotiations are still going on, but I still 
think it is acutely insulin, given the life-sustaining nature 
of the drug and the fact that we have heard stories at the 
American Diabetes Association that we had to focus specifically 
on insulin for this exercise. But you are absolutely right. A 
lot of the transactions could be applicable to other drugs.
    Dr. Greene. And, Senator, I would add that while this is 
the first time I am seeing this chart, and it is slightly 
behind me and to the left and so I cannot verify exactly, I 
could say you can draw almost exactly the same chart for most 
classes of pharmaceuticals. The recent report of the National 
Academies of Science, Engineering, and Medicine titled ``Making 
Medicines Affordable,'' draws a very similar chart generalized 
across fields of pharmaceuticals on patent and off patent in 
trying to understand all the many places in which the real 
problems of where drug price increases are happening remain 
obscure to the American taxpayer and to actually anyone. 
Pharmaco-economists, my colleagues who are trying to study drug 
prices, are really limited in their ability to do scientific 
analyses of what is happening in drug prices by the inability 
to see the true discounts and net prices that occur in these 
arrows.
    Senator Jones. All right. Well, thank you for that.
    I want to follow-up, again, Dr. Greene, with something that 
you testified to about in your practice that you would 
prescribe drugs and they were sometimes the higher-priced 
drugs. Is that an education--and the reason I say that is 
because having been a lawyer and I have seen in private 
practice somehow pharmaceutical reps are all the time calling 
on doctors, and rightly so--I am not criticizing them for doing 
that. But there is only a limited amount of education that a 
doctor can do in a practice.
    So how much of that is pharmaceutical marketing that is 
keeping--because I am really struck by the fact that there is 
no generic market for these drugs. And how much of that is 
based on the marketing that the pharmaceutical companies are 
doing? Or what are other causes for the lack of generic markets 
that have not developed with regard to diabetes drugs?
    Dr. Greene. Thank you for those questions, Senator. They 
are all worth attending to. And I do not take it personally. 
Certainly, my profession is making substantial efforts, the 
medical profession in America, to increase the vetting of the 
ways in which continuing medical education happens free of 
specific bias. That was not true for a substantial chunk of the 
20th century. And if you look historically, the role that the 
pharmaceutical industry took, pharmaceutical marketers, sales 
representatives in particular, in the job of educating 
physicians about the practice of medicine really became 
striking. Certainly in the 1980's, when these recombinant 
insulins were first introduced, I could show you historical 
advertisements that show children, and it is aiming to 
physicians, saying, ``He is 5 years old and already he is 
living in the past.'' In other words, convincing physicians 
without particular data that switching wholesale on to the 
newer products was necessary, even though the older products 
credibly could work just as well.
    So I think that is part of why generic markets have not 
formed for insulin in the way that they have in other drugs, 
that what has happened is, unlike penicillin, where I will 
still prescribe penicillin for strep throat or for syphilis, 
but there still is generic penicillin in the market. Doctors 
and patients still feel it is valuable. The insulins that were 
available in the 1960's are simply not being prescribed at all 
today.
    Senator Jones. All right. Thank you all. My time is up, but 
thank you all for coming, and particularly, Ms. Ondik, I would 
like to invite you to come down to be a life coach down in 
Alabama for our citizens. They could use a lot of coaching from 
someone like you. So thank you, and Mr. Grant also, for your 
stories. Thank you very much.
    The Chairman. Thank you, Senator.
    Senator Donnelly?
    Senator Donnelly. Thank you, Madam Chair.
    I just want to start by mentioning I have a family member 
who deals with diabetes, and they came out to visit and left 
one of their nonprescription components home. And when I went 
to the local retail pharmacy to pick it up, it was multiples 
higher than the very same product online. Multiples higher. And 
you look and you go this is the same box, same product, but you 
have to have it now, and so that is--this is a chart that is 
extraordinarily important because I think, Madam Chair, our 
Committee can help unwind that chart, because one of the other 
things--and I want to ask you about this--is we have set up a 
perverse system where the higher the retail price, the higher 
the rebate is for the people who determine what product it is; 
that when they determine this, their rebate is a percentage of 
whatever that price is.
    And so if you have one of the low--and I am going to ask 
you, Dr. Cefalu, about this, and anybody else. So if a 
manufacturer has a much lower price, then when it is 
prescribed, whoever does the prescribing in that process that 
gets a rebate gets a much lower rebate than they would have if 
they had prescribed the higher-cost medicine. And we have set 
up a completely reverse incentive system as to what product 
gets prescribed. Dr. Cefalu?
    Dr. Cefalu. Senator, you are absolutely correct, and, 
again, as we mentioned, there are incentives throughout the 
supply chain that facilitate or encourage. Again, the 
manufacturers set the list price, and from some of the data we 
had in the working group, it is the rebate that seems to be the 
key. The list price is going up, the greater the rebate. Well, 
where is that rebate going? Some of the evidence we got from 
the public information----
    Senator Donnelly. And if that price is lower and you have 
two competitive, then whoever gets the rebate gets a lower 
amount of funds.
    Dr. Cefalu. So the question would be--so we look at the net 
prices, and the argument would be that the list price is 
increasing. But what is coming to the manufacturer. Maybe it is 
much less. We know that. But we also know that they give a 
rebate to a physician for formulary at the PBM level. So that 
is one of the incentives to provide a higher rebate for 
formulary so that the drug is even used at the PBM level. The 
rebate at the wholesale level, you are absolutely right, the 
higher the list price, the greater the percentage, and there is 
an incentive for higher list price based on the processing at 
the wholesaler. PBM, the same thing, higher fees. Even if they 
retain 4 to 10 percent, as we were told, that is 4 to 10 
percent on a higher list price, and then that rebate to the 
health plan supposedly most of that is going to reduce 
premiums. But, again, a reduced premium is not going to help a 
person with diabetes with a high-deductible plan.
    So those incentives need to be understood throughout the 
supply chain, and, once again, it is not one stakeholders. It 
is the stakeholder throughout this opaque system. And I am 
glad, Senator Collins, you like this complicated chart. We did 
not put it up there as a Snellen chart for eye vision, but it 
is quite complicated.
    Senator Donnelly. Dr. Greene, how important is transparency 
in unwinding this?
    Dr. Greene. Senator, thank you for that question. I think 
transparency is crucial and you are hitting the nail on the 
head in terms of why this issue has not made any progress. 
Because on the one hand, as many pharmaceutical manufacturers 
have stated, they are not making an increased profit off of 
these increased prices because the net remains the same. You 
would think it would be an incentive to actually favor a 
program that explains their contributions and the fairness of 
their pricing to the American people. Conversely, if the 
pharmacy benefit managers were actually helping save money for 
American consumers, you would think they would also like to 
open this up and show what is happening.
    So both parties insisting that this remains a trade secret 
suggests that this discounting and this elevated list price 
actually is a system which benefits both of those parties and 
hurts taxpayers and hurts patients.
    Senator Donnelly. Well, I think that we have a terrific 
team on this Committee, and I think we can really be part of 
unlocking what is causing this, because at the end of the day, 
you have people who struggle with diabetes and wonder how they 
are going to make ends meet, how they are going to--and you 
cannot miss your medicine.
    And so I really appreciate you having this hearing, Madam 
Chair, and I am very hopeful that with folks like these, and 
then we have the manufacturers and others come in, that we can 
unlock this for the American people so that they are the 
winners at the end of the day. Thank you.
    The Chairman. Thank you, Senator.
    Senator Warren?
    Senator Warren. Thank you, Madam Chair.
    You know, I am glad we are taking a look at the rising cost 
of insulin. It is a problem that affects millions of people 
with diabetes who have seen the cost of their life-saving 
medication rise. And I am grateful to you and to the Ranking 
Member for holding this hearing today.
    So my view on this is that when it comes to keeping prices 
low for consumers, nothing beats a competitive market. In the 
prescription drug market, the Government hands drug companies a 
monopoly on their product that lasts a certain number of years, 
depending on the type of drug. But when that monopoly runs out, 
market forces are supposed to kick in. Other companies are free 
to produce generic versions, lowering the cost for patients.
    On the surface, insulin seems like an obvious candidate for 
exactly this kind of healthy competition. It has been around 
for almost a hundred years, it is in high demand by millions of 
patients, and there are multiple companies that make it. So I 
want to dig into why are prices going up instead of down.
    Dr. Greene, you have studied the insulin market. How many 
generic insulin products are available on the market today?
    Dr. Greene. I would say there are no true generic insulins 
in America today.
    Senator Warren. The answer is, after a hundred years, zero.
    Dr. Greene. Yes.
    Senator Warren. Right? That is amazing. So I note 
biosimilars are more complex to produce than traditional 
generics, but that cannot be the whole story. The drug 
companies that make insulin have also kept releasing new 
versions of their product that make small improvements over the 
old versions. And these incremental changes deliver benefits to 
patients that can afford brand-name drugs, but also allow 
companies to extend their monopolies and keep competitors out 
of the market.
    So just let me ask you, Dr. Greene, are patients being well 
served by an insulin market with a product that is only 
marginally more effective than a few decades ago, but at a 
significantly higher and higher price?
    Dr. Greene. So thank you for that question, Senator. I 
would say that for many patients who benefit from insulin 
analogues that can point to the specific benefits they have 
received in their own management, their ability to titrate on a 
finer or closer basis their insulins, and yet for the patient 
who cannot afford their insulin, these advances provide no 
benefit.
    Senator Warren. Yes. Look, I am all for more innovative 
products that help people. I think that is great. But we cannot 
mistake this market for a competitive market. What the drug 
companies are doing has effects that are similar to a practice 
called ``evergreening,'' strategies to help keep a monopoly 
nice and fresh year after year, long after it otherwise would 
have expired. And it is not the only thing that is driving down 
competition. Today three of the largest insulin producers in 
the country are under investigation for price fixing, raising 
their prices by similar amounts at the same point in time. It 
is not just anticompetitive. It is against the law.
    Now, Mr. Grant, the U.S. market for insulin is so broken 
that you actually turned to a pharmacy in Canada to get insulin 
for your son. Is that right, sir?
    Mr. Grant. That is correct.
    Senator Warren. You know, I appreciate your sharing this 
with the Committee and coming here to testify about this. Drug 
companies talk a lot about market-based solutions to tackle the 
drug-pricing problem. But I do not think the drug companies 
actually want to see these markets work. I see an industry that 
is doing everything it can to throw sand in the gears of the 
insulin market so they can keep their monopolies and keep 
raking in the cash on the backs of patients.
    Drug companies do not like proposals like requiring them to 
negotiate prices with the Federal Government or importing drugs 
from Canada. But I think it is time we look into policy 
solutions that would actually make a difference for patients, 
whether the drug companies like it or not.
    Thank you. Thank you, Madam Chair.
    Mr. Grant. Thank you.
    The Chairman. Thank you.
    Senator Shaheen, I want to welcome you today. I mentioned 
you in my opening statement. You have been the Chair of the 
Diabetes Caucus, and I really appreciate all the work we have 
done together.
    Senator Shaheen. Well, thank you very much, Madam Chair, 
and I especially appreciate your and Senator Casey's inviting 
me today to crash this hearing.
    As I am sure Senator Collins said, I have had the honor of 
serving as co-Chair of the Diabetes Caucus, and she is really 
the one who has provided leadership for so many years here in 
the Senate. But I am pleased to be able to join her and very 
much appreciate the willingness of each of you to testify today 
about what is happening.
    Like she may have said, I actually have a granddaughter who 
has type 1 diabetes, so, Mr. Grant, I have seen very directly 
the impact on a family of what that diagnosis does to a child 
and what that means for the entire family. And to have added to 
that the fact that the cost of insulin is now becoming 
prohibitive for so many families who need that to stay alive is 
hard to justify in any way.
    So I want to ask each of you, several of us on this 
Committee serve on the Appropriations Committee, and we are 
going to have the Secretary of Health and Human Services, Alex 
Azar, before us this week testifying. What would you like us to 
ask him about what Health and Human Services should be doing to 
address the high costs of insulin? I will start with you, Dr. 
Cefalu.
    Dr. Cefalu. Well, we have heard Secretary Azar's statement, 
and it acknowledged that he wants to drive down the price of 
drugs. Hopefully, he is serious about that. He is certainly in 
the position to do so, and he certainly has a past history to 
understand the complexity of the system.
    So, once again, for our purposes, wanting to make sure that 
he understands--and I am sure he does--the complexity and the 
position of every stakeholder in this convoluted system. We 
have heard a lot today pointing at one stakeholder, and I just 
want to reiterate to him that it is the system that needs to be 
fixed.
    So, again, fix the rebate. Where does this rebate go? Who 
is benefiting? Who is profiting? That is where transparency is 
going to come in. Once it gets down to a level, the patient is 
certainly not getting the rebate at the point of sale. 
Recently, we have heard that some of the health plans are 
passing along a portion of the rebate to the patient. That is 
fantastic. We encourage that. But then it gets back to why 
there are rebates at all.
    The other thing--and I wanted to just make one statement 
about the advances in insulin--the newer formulations, these 
are an advance to the point where they give a long-acting 
profile, they are more physiologic. One can argue that over 
time in many patients the glycemic control may be the same, but 
they often increase advantages to hypoglycemia, which is going 
to prevent a person from getting tight glycemic control and 
improving quality of life.
    So these incremental changes have made a difference. The 
question is the cost of these insulins and why the increase in 
cost throughout the supply chain.
    So I think he would have a unique perspective on the 
situation and probably have a unique perspective on the supply 
chain and where things can be fixed.
    Senator Shaheen. Thank you. Yes, as you point out, 
Secretary Azar was an executive at Eli Lilly, so he certainly 
understands the pharmaceutical industry.
    Mr. Grant, what would you suggest that we ask the Secretary 
about this?
    Mr. Grant. I guess, you know, I live my life kind of, you 
know, what is fair. You know, we look at folks like you to kind 
of guide us and give us some direction in what is fair. So I 
would ask him, you know, what is fair? You know, what is 
expected, what someone should have to pay for these 
medications? And, you know, the other question I would ask--you 
know, for a type 1 diabetic, this is not anything that they 
brought upon themselves. It is, you know, that one of their 
major organs stopped working properly. You know, whether it is 
a baby--I mean, there are babies born with type 1 diabetes. You 
know, I am thankful that my son got it at 9 and so he could 
help with the treatment. But kind of, you know, what is fair?
    Again, it was not like I was looking to go outside of our 
country to purchase medicine for my son, but, you know, what I 
found last week was, you know, it is almost five times what I 
could get it for. I mean, you kind of have to do what you have 
to do. But, you know, what is fair? What can we expect people 
to really be able to afford and to be able to pay?
    Senator Shaheen. Thank you.
    Ms. Ondik?
    Ms. Ondik. I am not really familiar on how the drug 
companies operate. Right now I do not take anything for the 
diabetes because it is not necessary. But I would definitely 
appreciate if the cost would come down. I am currently on a 
Medicare Advantage plan, and the medications that I do take are 
within my reach. And if I do happen to get a prescription that 
is out of my reach, I will immediately call my doctor and say 
to her, ``I cannot afford this.'' And then we work together to 
find something, a drug that will do the same identical thing at 
a cheaper price for me.
    So I would really like to see the medications stay down 
where those that really cannot afford them have access to them.
    Senator Shaheen. Well, and your experience certainly speaks 
to the importance of taking every step you can. As we look at 
the cost, the increasing cost of diabetes, making sure that we 
can manage without having people go into diabetic episodes that 
require hospitalization and other more severe treatments is in 
the economic interest of the country, never mind the benefits 
that individuals receive from having that kind of management of 
their illness.
    If I can, Madam Chair, can I just ask Dr. Greene to answer 
that?
    Dr. Greene. Thank you, Senator. My principal question would 
be: Why is there no competitive market for insulin in this day 
and age? We have three manufacturers, and we know from 
pharmaco-economic analysis that you do not really see true 
competition driving down drug prices in a significant way until 
you have four or more manufacturers in the market. So when I 
answered Senator Warren earlier in terms of was there a generic 
insulin, now there are two new follow-on biological versions. 
There is Basaglar, which is Eli Lilly's follow-on copy of 
Sanofi-Aventis' long-acting insulin. And then there is Admelog, 
which is Sanofi-Aventis' follow-on copy of Eli Lilly's short-
acting insulin. Both of them are priced slightly under the 
brand-name competitor, but a savings of maybe $50 max out of a 
drug that costs $300, it does not bring it down to a reasonable 
rate. And one of the reasons is neither of these moves actually 
brings the competition of insulin products outside of a three-
player market.
    So that is the real question I would have: Is there 
something fundamentally about the nature of insulin as a drug 
in which there will never be more than three manufacturers? 
Because if so, thinking about generic competition is never 
going to work, and we are going to need to think of an entirely 
different method of thinking about this essential commodity 
which is a key part of our biomedical infrastructure. If it 
truly cannot become competitive, we need to think about 
different ways of acting. If it can become competitive, we have 
to become much more serious about how to make that happen.
    Senator Shaheen. Thank you all very much, and it certainly 
speaks to the importance of transparency to make it more 
competitive.
    The Chairman. Thank you.
    Senator Blumenthal?
    Senator Blumenthal. Thank you.
    Dr. Greene, you have just summarized very well a dilemma 
that I see not only as a member of this Committee, but as a 
member of the Antitrust Subcommittee of Judiciary and the 
Commerce, Science, and Technology Committee where antitrust 
also is of interest. I have studied this issue of insulin for 
years. I want to thank our Chair and Ranking Member for having 
this hearing because it is a real enigma to me. We love to talk 
about free enterprise and free markets, and yet the price of 
insulin and many other generics has risen astronomically 
without adequate explanation, without any credible explanation. 
And I have talked to the doctors and the hospital 
administrators throughout Connecticut who have complained to me 
almost since the day that I was elected a United States Senator 
about shortages and rising prices of insulin and other 
generics, critical medicines, workhorse treatments. They are 
not some esoteric drug that is used to treat a small number of 
people. They are workhorse medicines, anesthetics and other 
treatments that are vital to American medicine.
    In Connecticut, there are 355,000 adults with diabetes, 
costing the state $3.7 billion a year. And this problem will 
get worse before it gets better with over a third of adults in 
Connecticut suffering from pre-diabetes without intervention on 
the road to their own diagnosis of diabetes. And yet despite 
this spreading epidemic of diabetes, the prices of insulin 
continue to rise, and patients who need this drug struggle to 
afford it.
    I am going to ask permission that my full statement be 
entered in the record.
    The Chairman. Without objection.
    Senator Blumenthal. I think this issue is so widespread, it 
does not admit of rhetorical solutions. There have to be real 
interventions in the marketplace somehow, perhaps by the 
government, where essential medicines become out of reach for 
people. And maybe it is like a utility that has to be better 
controlled, because your stories are so powerful in human 
terms, and they are no different than the ones I have seen in 
my own travels around the State of Connecticut.
    So I just would like to know from you, Dr. Cefalu, what 
specific information in terms of increasing transparency--
because you have talked about that issue. What would you like 
to see from those companies that make insulin?
    Dr. Cefalu. So, Senator, let me also again state it has to 
be throughout the chain. We talk about lack of competition from 
insulin manufacturers, but we also talk about increased 
consolidation with the pharmacy benefit managers, which is a 
concern.
    So when we talk about solutions, we want to talk about 
solutions across the entire chain and not pick out one 
stakeholder. Isolating one stakeholder is not going to get the 
job done unless there is a down throughout the supply chain 
effect.
    So, again, it is important to realize throughout the chain 
there are issues that I would like this Committee--you need to 
address.
    So what are the things that need to happen? Well, some of 
the things discussed here, factors that influence the list 
price of insulin, understanding the negotiations with the 
manufacturer and the PBM, understanding the negotiation between 
the PBM and the health plan. What exactly--what is that rebate? 
It is a different negotiation with the health plan and the 
pharmacy, and in those situations, what you pay in the pharmacy 
and what the health plans pay, it is the same product, but yet 
no one is fully aware. That is the transparency we are looking 
for.
    What we also know is--you mentioned earlier about knowing 
the price when you build a house and know the price. Well, a 
patient may go to a pharmacy, and they may be on a high-
deductible health plan, and they may pay $400 for insulin when, 
in fact, that insulin may have received a 50-percent rebate to 
intermediaries in the supply chain. So is that fair that 
someone in a deductible has to pay for a rebate that stays in 
the supply chain?
    So this just reiterates the complexity of the situation and 
that you have to look at it globally rather than isolating a 
single partner. And that is the complex issue.
    But, once again, transparency in the negotiations, what the 
PBMs--rebates they are paying, how much the health plan is 
paying on insulin, how much are you applying for the rebate on 
the premiums? Again, the rebate should go back to the patient, 
and it does not help a person who is underinsured or high-
deductible health plan to have an acceptable premium when they 
are paying $7,500 a year for a deductible for life-saving 
medications. And that is what needs to be balanced.
    Senator Blumenthal. Thank you. My time has expired, but I 
may have some more questions for the record. Again, I want to 
thank the Chair and Ranking Member.
    The Chairman. Thank you, Senator.
    I want to thank all of our witnesses for testifying today 
and really helping us as we grapple with this issue. I first 
founded the Senate Diabetes Caucus some 21 years ago after 
meeting in Maine with a family whose 10-year-old son had type 1 
diabetes, and I will never forget his looking up at me and 
saying that he wished he could just take 1 day off from having 
diabetes. But as Mr. Grant well knows from his experience, 
those children cannot ever take a day off. And they are insulin 
dependent, as are about a third of adults with type 2 diabetes.
    So at that time I vowed to form the Caucus, and working 
with great co-Chairs like Jeanne Shaheen, we have made real 
progress in more than tripling the Federal funding for research 
into diabetes. And it has led to cutting-edge technology like 
the development of better pumps and continuous glucose monitors 
and, indeed, most recently an artificial pancreas, which I am 
very excited about and we would only have dreamed of 20 years 
ago.
    However, I will tell you that 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, almost a 
hundred years. And it is 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, to me that even older 
versions of insulin are increasing in price at rates that are 
untenable for too many Americans with diabetes. Last year and 
again this year, I received a petition that was signed by 
thousands of Americans asking what can Congress do to bring 
down the cost of insulin, and this hearing represents only the 
first step. I want to deconstruct that complicated web of 
transactions to figure out who is making how much money and why 
aren't discounts that are negotiated with manufacturers 
reaching the patient, particularly the uninsured patient, but 
also the insured patient who has a high deductible, which is so 
common, particularly for those who do not have employer-
provided insurance and are purchasing on the Affordable Care 
Act marketplaces.
    It is astonishing that for a drug approaching 100 years old 
and that is serving millions of Americans that we do not see a 
proliferation of manufacturers but, rather, just three major 
manufacturers. I do not understand that as well.
    So I am committed to continuing to dig into this issue, but 
I will tell you, it is the most complex web that I have ever 
seen, and we are going to need the help of many of the experts 
that are represented in this room and at our witness table as 
we seek to unravel the web and figure out exactly what is going 
on.
    But I want to thank you for laying the baseline. Mr. Grant, 
in particular I want to thank you for putting a human face on 
this problem and telling us what this has meant as you have 
worked so hard to keep your son healthy, to make sure that that 
original initial incident when he was just 9 years old and was 
misdiagnosed as just having the flu when he had a life-
threatening disease with his blood sugar over 800 does not 
happen again. I just cannot imagine how frightening that must 
have been. We want to keep him healthy, but we also do not want 
you to go broke in doing so.
    So I am committed to trying to get to the bottom of this, 
and I want to thank you for coming down from Maine. I want to 
thank all of our witnesses for being here today with us.
    Did you want to add something?
    Mr. Grant. I was just going to say thank you for the 
opportunity to come down here and just share. I really can 
tell, you know, everybody here is on the same page in wanting 
to make this better for everybody. So to be a part of it is 
just an honor, and thank you very much.
    The Chairman. Thank you.
    Again, thank you to all of our witnesses. You were an 
excellent panel today. I want to thank the Committee members 
and Senator Shaheen for coming today as well.
    I would note that Senator Fischer and Senator Gillibrand 
were also here but had to leave for other obligations.
    I will turn to Senator Casey for any closing remarks that 
he might have.
    Senator Casey. Madam Chair, thank you very much. I want to 
thank our witnesses for giving us the kind of information we 
are going to need to take action on this issue or range of 
issues. Ms. Ondik, thank you for coming from Pennsylvania. Mr. 
Grant, thank you for bringing your personal story here. And, of 
course, Dr. Cefalu and Dr. Greene, for your own expertise and 
background.
    I will submit a statement for the record, but thank you, 
Madam Chair.
    The Chairman. Thank you very much, Senator Casey.
    Committee members will have until Friday, May 18th, to 
submit questions for the record, so you may be receiving some 
additional questions. Again, my thanks to our witnesses, to our 
Ranking Member, to our staff, and to all the Committee members 
and Senator Shaheen who participated in today's hearing.
    This concludes our hearing.
    [Whereupon, at 11:46 a.m., the Committee was adjourned.]

      
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                                APPENDIX
   
      
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                      Prepared Witness Statements

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[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

 Prepared Statement of Paul Grant, Father of Son With Type 1 Diabetes, 
                         New Gloucester, Maine

    Good morning. Thank you Senator Collins, Ranking Member 
Casey, and members of the Senate Aging Committee. It is a 
privilege and an honor to be here to testify today.
    My name is Paul Grant. I am a father of 4 children, Oliver, 
age 18, Jordan, age 16, Solomon, age 13, and Levi, age 11. We 
live in the small community of Gray-New Gloucester, Maine. I 
would describe us as an active family. We play a lot of sports, 
basketball, baseball, soccer, football, lacrosse, and softball. 
We are usually on a field or in a gymnasium most days. My 
children mean the world to me, and I love coaching and watching 
them play.
    At the end of January in 2014, my son, Solomon, became very 
ill. For at least a week, he laid on the couch with flu like 
symptoms. He was very lethargic, had stomach pain, grayish pale 
color, was noticeably thinner, and he had glossy eyes. His 
mother had taken him to the doctors, but we were told he had 
the flu and it would just run its course. We treated him with 
ibuprofen and Tylenol, and made sure he drank lots of fluids. 
But Sol's condition did not improve. In fact, it only appeared 
to get worse. I was coaching youth basketball the day that I 
got a call from my wife. She was sad and upset because Sol was 
still very ill. She decided to take him to the ER at St. Mary's 
Hospital in Lewiston. My other three kids and I left basketball 
and met her at the ER. When I arrived, Sol was in a gurney, 
hooked up to an IV, surrounded by nurses. The on call doctor 
eventually came into the room and told us Sol had type 1 
diabetes. His blood sugar was over 800. This was more than four 
years ago now, but I can remember this day as if it were 
yesterday. You can imagine the feelings his mother and I 
experienced when we heard the words ``Your son has type 1 
diabetes.'' Our son has a disease. We experienced feelings of 
sadness, confusion, fear, astonishment and bewilderment just to 
name a few. The three of us spent that weekend in the ICU, and 
our lives were forever changed.
    Today, Sol is 13 years old and a 7th grade student at Gray-
New Gloucester Middle School. Several students in the middle 
and high school also have diabetes. The school system does a 
good job helping the students manage their disease. Besides 
going to the nurses' office several times a day to check his 
blood sugar and carrying around a diabetes bag, things are 
pretty normal for my 13-year old boy. He has a good group of 
friends, good teachers, and loves playing basketball. As long 
as he has insulin and checks his blood sugar regularly, he 
manages pretty well.
    I work for a small general contracting company, Wally J. 
Staples Builders Inc. We build new homes, additions, and 
garages. We also complete many interior and exterior 
renovations and pretty much anything to do with construction. I 
am a Project Estimator. I absolutely love my job, and have had 
the opportunity to be part of thousands of construction 
projects over the years. Unfortunately, like many small 
businesses, my employer does not provide health insurance. I 
purchase it for my children and myself through the marketplace, 
which is very expensive and very complicated. I have to pay a 
high deductible to keep my monthly premium lower. Consequently, 
I end up paying a lot out of pocket for necessary supplies for 
Solomon, approximately $2,500 plus. Last year, I will have 
spent close to $15,000 for health care.
    Solomon needs two types of insulin: Humalog and Lantus. In 
2017, I would typically pay $300 for a 90-day supply of Humalog 
through Express Scripts and around $150 for a 90-day supply of 
Lantus. This seemed like a lot until this past January when I 
called to refill Solomon's Humalog prescription. I was shocked 
to learn it was now going to cost more than $900 for a 90-day 
supply. That is nearly $1,000 for a treatment that Solomon 
absolutely needs, and about three times more than I had been 
paying. I immediately went into panic mode as I was low on 
Humalog and I had to get it as soon as possible. I tried to get 
answers from my insurance company but received little help or 
explanation. I do not think they even understand our health 
plan--I know I don't. I ended up purchasing a 30-day supply at 
Wal-Mart to get me by until I could figure things out. The 30-
day supply cost me $322.64 (with a coupon). I had no choice--
Sol had to have insulin.
    No father wants to see what would happen if you run out of 
insulin for your child with type 1. I remember Sol's state in 
the week that he was first diagnosed, when his body first 
stopped producing its own insulin. I know that I must do 
whatever I can to make sure that he never has to go without it. 
I have purchased it on my credit card and I have had to borrow 
insulin from friends.
    When I saw that the price had hiked to nearly $1,000, I 
knew it was something I could not afford. I spent several hours 
and days reaching out to friends in the diabetic community 
looking for an affordable option. Ultimately, I found a 
pharmacy in Canada where I could purchase a 90-day supply of 
Humalog for $294.97 that included a $50 shipping fee. This is 
with no contribution from my insurance company. That was 
January 22 and I just refilled that prescription the beginning 
of April with the same pharmacy in Canada. Last week, I checked 
with Express Scripts to see how much a 90-day prescription 
would be for Solomon's Humalog and it would cost me $1,489.46 
with my insurance.
    As I mentioned, I help people build houses for a living. I 
am good at my job and can tell you very accurately how much it 
would cost you to build a new house or put an addition on your 
home--but I can't tell you how much it's going to cost from 
month to month to buy the insulin I need to help keep my son 
healthy.
    I do not understand why insulin for children with type 1 
diabetes is so expensive and why I can purchase it in Canada 
for so much less. We are just talking about the cost of insulin 
today, but there are many other things like insulin pumps and 
glucose monitors out there that would make children's lives and 
parents' lives so much easier if they were more affordable.
    Thank you again for the opportunity to appear before you 
today to share our story. I would be happy to answer any 
questions.
                              ----------                              


    Prepared Statement of Lois Ondik, Retiree, Blandon, Pennsylvania

    Chairman Collins, Ranking Member Casey, and members of the 
Committee, thank you for inviting me to testify today. It is an 
honor to be here.
    My name is Lois Ondik. I am 73 years old and a resident of 
Blandon, Pennsylvania. I have three children and two 
grandchildren. I am a retired school bus driver for the Berks 
County Intermediate Unit.
    Five years ago, my doctor diagnosed me with type 2 
diabetes. At that time, my doctor wanted me to start on 
medication to help manage my blood sugar and A1C. A1C measures 
the amount of hemoglobin in the blood that has glucose attached 
to it. An A1C level of 5.7 percent is considered normal. An A1C 
of 5.7 to 6.4 is pre-diabetes and 6.5 and over is type 2 
diabetes. Five generations of my family have been diagnosed 
with diabetes, myself being the fifth generation and now my 
daughter has just been diagnosed with pre-diabetes, making her 
the sixth. I understand the toll that it can take on both your 
body and finances. I was concerned about the side effects of 
medications and I knew that the cost of medication would likely 
eat into my budget and my savings. So, I insisted on trying to 
manage my condition on my own, without medication. For a while, 
I was able to do so.
    During a recent visit with my doctor, I was again told that 
my blood sugar and A1C levels would soon require me to begin 
taking medication. And, so again, I thought to myself that 
there had to be another option.
    Then, I saw an advertisement for a diabetes self-management 
program through Berks Encore, my local Area Agency on Aging, 
hanging on the bulletin board at my local grocery store. I 
ended up registering for the diabetes self-management class. I 
did not know what the class would be about when I signed up, 
but knew that I needed to manage my diabetes better or face the 
bills and side effects associated with medication.
    The class has been a blessing. We met once a week for two 
and half hours for six weeks and it was run by two trained 
leaders. One of my leaders, Martha Sitler, joins me here today.
    My classmates were at different levels in their disease, 
including those with a new diagnosis, people managing with 
Metformin medication, and people on insulin. I met a woman who 
used an insulin pump and another who was struggling to manage 
her blood sugar, even with insulin. Meeting them, learning 
about the side effects, and knowing how costly the medications 
can be affirmed my resolve to manage my diabetes on my own for 
as long as possible.
    The class is evidence-based, so I know that I learned about 
techniques to deal with the symptoms of diabetes that really 
work. We discussed how to deal with emotions and stress 
management and talked about foot care, exercise, healthy 
eating, and many other topics, but especially how to talk to 
our doctors.
    Before these classes, I did not regularly test my blood 
sugar, but I started to once I joined the diabetes self-
management program. I also tracked everything I ate and learned 
how food and exercise affected my blood sugar. The class helped 
me understand the amount of food I need per day, including how 
to balance protein, carbohydrates, and fats to better control 
my blood sugar.
    At the end of every session, each individual created an 
action plan, something they wanted to accomplish before our 
next class. For example, I wanted to start exercising. My plan 
was to start low and slow, to exercise 15 minutes per day, 3 
days per week. The following week we were accountable to our 
classmates and had to report on how we did. Sometimes it is 
hard to accomplish every goal you set, but being accountable to 
my classmates helped me reach my goals. I found the peer-to-
peer support to be very important. The class was eye opening to 
say the least.
    After my diabetes self-management program ended, I joined a 
free walking class entitled ``Walk with Ease'', sponsored by 
the Arthritis Foundation of Berks County. The program is 
presented by Martha Sitler and Kathy Roberts of Berks Encore, 
my local Area Agency on Aging. Today, my foster dog, Murfee, 
and I walk every day, and I use two pedometers to track my 
activity. I went from zero exercise to more than 2.5 miles per 
day. I think of the walking class as an extension of the 
diabetes self-management program because of how important 
exercise is in managing my disease.
    I am pleased to say that since starting my class, I lost 13 
pounds and lowered my A1C two tenths of a point. In fact, the 
doctor told me that had my A1C moved two tenths of a point in 
the opposite direction, she would have insisted I start taking 
medication. That is where it all fell into perspective, I knew 
I had the ability to manage my diabetes on my own; I just 
needed the right tools.
    The diabetes self-management program did just that, it gave 
me the tools I need to manage my diabetes and now I use those 
tools to live a healthy life. I even told my doctor about the 
course and recommend that she tell her patients about it. I am 
now able to manage my disease through lifestyle changes, 
instead of having to purchase expensive medications and 
supplies, like insulin.
    I believe it is important for people to have access to 
supports to prevent or better manage their diabetes and that 
can help them avoid paying for high-cost medications. I am 
concerned about the rising cost of medications across the 
board, because it puts treatment out of reach for some people.
    Again, thank you for the invitation to testify before the 
Committee. I look forward to answering your questions.
    Thank you.
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                  Additional Statements for the Record

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    Closing Statement, Senator Robert P. Casey, Jr., Ranking Member
    Thank you, Madam Chairman, for holding this hearing today. I would 
also like to thank our witnesses for their testimony, particularly Lois 
for her compelling personal story. As we have learned today, living 
with diabetes is a far too common experience. To quote Lois, ``the 
rising cost of medication across the board can put treatment out of 
reach for some people.'' I couldn't have said it better myself. No 
senior should have to ration their insulin or choose between medication 
and food, simply because of the price of their medications. And, as 
Lois shows us, it is essential for Americans to have access to programs 
that provide the tools to better manage diabetes. I applaud our local 
Area Agencies on Aging for their leadership and dedication to helping 
seniors live full and healthy lives, all while saving on their health 
care costs. It is imperative that we work together and I look forward 
to continuing this important dialog.

                               __________

             Closing Statement, Senator Richard Blumenthal
    I want to start by thanking Senators Collins and Casey for holding 
a hearing on the increasingly high cost of insulin, and the higher cost 
of individuals struggling to gain access to it. There are 355,000 
adults in Connecticut with diabetes, costing the state $3.7 billion per 
year. This problem will get worse before it gets better, with over a 
third of adults in Connecticut suffering from prediabetes and, without 
intervention, on the road to their own diabetes diagnosis.
    Yet, unfortunately, despite the diabetes epidemic that has 
enveloped our country, insulin prices continue to rise and patients who 
need this drug struggle to afford it. One doctor from Yale-New Haven 
Hospital described a 78-year old patient who refused to increase her 
dose of insulin, despite it being absolutely necessary, because she 
couldn't afford to do so.
    Another doctor at Hartford Hospital said that patients forgoing 
necessary treatments ultimately end in the emergency room there. This 
problem is widespread in Connecticut, particularly amongst low-income 
individuals, and begs the question that I believe brings us all here 
today: how can a one hundred year old drug suddenly cost so much that 
our most vulnerable citizens cannot afford to access it?
    I believe this is the question we are all seeking to find answers 
to, not only for insulin, but countless other drugs that have seen 
astronomical and unjustified price spikes over the years. I will 
continue to push for policies that increase transparency, lower drug 
prices, and eventually, improve care, but that cannot be done without a 
strong commitment to everyone here in Congress.
    I want to thank each of you for contributing your stories and 
information to this important discussion and look forward to finding a 
way to implementing the suggestions you've given us today at this 
hearing.
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       Statement of Sabrina Burbeck, Family With Type 1 Diabetes
    Chairman Collins, Ranking Member Casey, and members of the 
committee: My name is Sabrina Burbeck, and I am from Old Town, Maine. I 
am writing to tell you about my family's experience with diabetes and 
insulin. When my brother was thirteen, he was diagnosed with type 1 
diabetes. Since then it has been a struggle for my family to afford his 
insulin as the prices have risen so much over the years. In 2012, I 
gave birth to my second son, Dakota, who was diagnosed at 18 months 
with type 1 diabetes. He is now five and has relied on insulin to 
survive since his diagnosis. Right now we are lucky because he has 
state provided healthcare that helps to cover some of his drug costs. 
My brother is not so lucky. He must pay for his insulin out of pocket, 
even with a discount card he spends $150 per vial. He should be using 
two vials a month, but instead he stretches out his doses for as long 
as he can in order to afford it. I am a single mom on a fixed income, 
and I live in fear of not being able to afford the insulin my son needs 
to survive. If my son loses his healthcare, he will be fighting that 
much harder for his life. No one should live in fear of having to make 
the choice to eat that month or pay for meds. I thank the committee for 
taking the time to address this issue, and I hope, for the sake of my 
brother and my son, that you can change our system to ensure insulin is 
affordable for all Americans.
                               __________
                               
               Statement of Gail DeVore, Type 1 Diabetic
    Chairman Collins, Ranking Member Casey, and members of the 
committee: My name is Gail DeVore, and I am from Denver, Colorado. I 
have had type 1 diabetes since Valentine's Day, 1972. For the last 46 
years, I have seen the invention of home glucose meters, insulin pumps, 
new forms of insulin, continuous glucose monitors (CGM), and many other 
advancing treatment options for type 1 diabetics. I have also had the 
privilege of using all these options, which allow me to be 
complication-free and in good health. These are not ``special devices'' 
or extraordinary treatment options. These devices allow a type 1 
diabetic to live without as much fear of complications and an early 
death due to diabetes. The ability to constantly monitor the status of 
our blood sugars is critical in saving our lives. However, it all comes 
with a very high price. At my pharmacy, one bottle of the insulin I use 
is $330. My prescription is for four bottles. At other pharmacies, this 
same single bottle of insulin can cost as much as $600. Supplies can 
also cost about $1,000 per month on top of that, despite insurance 
coverage and prescription benefits. These costs are exorbitant. 
Considering the risks type 1 diabetics like myself face, the costs are 
unacceptable. I thank the committee for taking the time to address this 
issue, and I implore you to work on implementing policies that ensure 
type 1 and other types of diabetics have access to affordable insulin.
                               __________
                               
       Statement of Clayton McCook, Daughter With Type 1 Diabetes
    Chairman Collins, Ranking Member Casey, and members of the 
committee: My name is Clayton McCook, and I am from Oklahoma City, 
Oklahoma. I write to you today on behalf of my nine-year-old daughter, 
Lily, who lives with type 1 diabetes. The day she was diagnosed six 
years ago, our lives changed forever. We went from being a young family 
full of blissful innocence to one living with chronic illness. Each 
month Lily goes through about one and a half vials of insulin, but as 
she grows, she will need two. Each vial costs $325. That comes out to 
nearly $500 a month now and eventually will be over $600. This only 
accounts for her insulin and not for her diabetes supplies, which are 
also very expensive. I am lucky; I work as a veterinarian and make good 
money, but even with that, my wife works multiple jobs to supplement 
our income and ensure we can afford Lily's insulin. My daughter is one 
of the strongest people I know, and I never worry about her ability to 
care for herself as time goes on. However, I worry every day about the 
direction that insulin prices are headed. The cost of insulin is always 
increasing, even though the drug was brought to market nearly 100 years 
ago. We pay hundreds of dollars for a decades-old medication that costs 
a fraction of the list price to produce. What will happen if Lily 
cannot afford her medication? She needs her insulin to survive and will 
continue to need it for the rest of her life. I want my daughter to 
grow up to live the life she wants, but with the burden of the cost of 
insulin, I worry that could be impossible. We need insulin to be 
affordable in this country. Thank you for taking the time to look into 
the problem for my family and others throughout the United States. I 
look forward to the action you take to ensure all diabetes patients, 
including Lily, are able to access the insulin they need to survive.
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