[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
PRICED OUT OF A LIFESAVING DRUG: THE
HUMAN IMPACT OF RISING INSULIN COSTS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
APRIL 2, 2019
__________
Serial No. 116-21
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
39-474 PDF WASHINGTON : 2020
--------------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Oversight and Investigations
DIANA DeGETTE, Colorado
Chair
JAN SCHAKOWSKY, Illinois BRETT GUTHRIE, Kentucky
JOSEPH P. KENNEDY III, Ranking Member
Massachusetts, Vice Chair MICHAEL C. BURGESS, Texas
RAUL RUIZ, California DAVID B. McKINLEY, West Virginia
ANN M. KUSTER, New Hampshire H. MORGAN GRIFFITH, Virginia
KATHY CASTOR, Florida SUSAN W. BROOKS, Indiana
JOHN P. SARBANES, Maryland MARKWAYNE MULLIN, Oklahoma
PAUL TONKO, New York JEFF DUNCAN, South Carolina
YVETTE D. CLARKE, New York GREG WALDEN, Oregon (ex officio)
SCOTT H. PETERS, California
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 1
Prepared statement........................................... 3
Hon. Brett Guthrie, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 4
Prepared statement........................................... 6
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 7
Prepared statement........................................... 8
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 9
Prepared statement........................................... 10
Witnesses
Gail deVore, Patient Advocate.................................... 12
Prepared statement........................................... 15
William T. Cefalu, M.D., Chief Scientific, Medical and Mission
Officer, The American Diabetes Association..................... 17
Prepared statement........................................... 19
Answers to submitted questions............................... 96
Alvin C. Powers, M.D., Director of Vanderbilt Diabetes Center,
Director of Division of Diabetes, Endocrinology, and
Metabolism, Vanderbilt University Medical Center............... 31
Prepared statement........................................... 33
Kasia J. Lipska, M.D., Assistant Professor of Medicine, Yale
University School of Medicine.................................. 38
Prepared statement........................................... 40
Christel Marchand Aprigliano, Chief Executive Officer, Diabetes
Patient Advocacy Coalition..................................... 45
Prepared statement........................................... 47
Aaron J. Kowalski, Ph.D., Chief Mission Officer, JDRF............ 57
Prepared statement........................................... 59
Submitted Material
Article on Insulin: ``A lifesaving drug too often out of reach,''
by Ms. DeGette and Mr. Tom Reed submitted Ms. DeGette\1\
Article of November 16, 2018, ``Protesters at Sanofi in Cambridge
decry high price of insulin'' The Boston Globe, by Allison
Hagan, submitted by Mr. Kennedy................................ 92
----------
\1\ Article on Insulin has been retained in committee files and
also is available at https://docs.house.gov/meetings/IF/IF02/
20190402/109502/HHRG-116-IF02-20190402-SD001.pdf.
PRICED OUT OF A LIFESAVING DRUG: THE HUMAN IMPACT OF RISING INSULIN
COSTS
----------
TUESDAY, APRIL 2, 2019
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:30 a.m., in
room 2322 Rayburn House Office Building, Hon. Diana DeGette
(chair of the subcommittee) presiding.
Members present: Representatives DeGette, Schakowsky,
Kennedy, Ruiz, Kuster, Castor, Sarbanes, Peters, Pallone (ex
officio), Guthrie (subcommittee ranking member), Burgess,
Griffith, Brooks, and Walden (ex officio).
Also present: Representatives Barragan, Soto, Bucshon, and
Carter.
Staff present: Kevin Barstow, Chief Oversight Counsel;
Jesseca Boyer, Professional Staff Member; Jeffrey C. Carroll,
Staff Director; Tiffany Guarascio, Deputy Staff Director; Judy
Harvey, Counsel; Chris Knauer, Oversight Staff Director;
Jourdan Lewis, Policy Analyst; Perry Lusk, GAO Detailee; Kevin
McAloon, Professional Staff Member; Kaitlyn Peel, Digital
Director; Tim Robinson, Chief Counsel; C. J. Young, Press
Secretary; Jennifer Barblan, Minority Chief Counsel, Oversight
and Investigations; Margaret Tucker Fogarty, Minority Staff
Assistant; Brittany Havens, Minority Professional Staff,
Oversight and Investigations; Ryan Long, Minority Deputy Staff
Director; Zach Roday, Minority Communications Director; and
Natalie Sohn, Minority Counsel, Oversight and Investigations.
Ms. DeGette. The Subcommittee on Oversight and
Investigations will now come to order. Today, the Subcommittee
on Oversight and Investigations is holding a hearing entitled,
``Priced out of a Lifesaving Drug: The Human Impact of Rising
Insulin Costs.'' The purpose of today's hearing is to examine
insulin affordability challenges and the financial and health
consequences on patients' lives.
The Chair now recognizes herself for the purposes of an
opening statement.
OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Today, the subcommittee holds its first hearing in this
Congress on the rising costs of prescription drugs which have
devastating real-life consequences for families around the
country. We are here this morning to examine the impacts of
climbing insulin costs on the seven and a half million people
in the United States who rely on insulin every day to manage
their blood sugar levels and prevent debilitating
complications.
Insulin insures the health and well-being for millions of
people and for the 1.25 million people with type 1 diabetes it
is a life-sustaining drug for which there is no substitute. The
scientists who made the discovery of insulin knew of its
lifesaving importance. Even nearly a hundred years ago, they
were concerned that the discovery would be commercialized to
the point of being put out of financial reach for those who
needed it. To avoid this, they sold the insulin patent to the
University of Toronto for one single dollar. Yet, today,
skyrocketing prices are making it unaffordable for millions of
people in this country.
The price of insulin has doubled since 2012, after nearly
tripling in the previous 10 years. We have been hearing stories
and reading disturbing news reports for too long. People are
skipping doses, failing to pay rent or buy groceries, and even
resorting to an insulin black market to afford their insulin.
Just this past Friday, at home in Denver I had a listening
session and I heard from some of my constituents as to just how
real this crisis is. One of the people who came was a woman
named Sierra. Sierra does not have insurance and she make too
much money to qualify for Medicaid. She has been struggling for
the past year and a half to pay for her insulin. She took three
jobs. She made other adjustments in her life in order to cut
costs in her personal life, selling her car and living with
relatives.
Even rationing her insulin, for example, not changing the
reservoirs in her pump like she is supposed to, she is still
paying out-of-pocket over $700 a month for her insulin. She is
living day-to-day, bottle-to-bottle. She told me she was in the
hospital. She went to the emergency room four times in past
months, and, good news, they brought her blood sugar under
control. And for her, better news, they gave her one bottle of
insulin. She said, ``And that lasted me 2 weeks.''
Now parents with children with diabetes are also living
with this constant stress and worry. For example: last year, I
heard from a parent in New York whose 23-year-old son was
diagnosed as a type 1 diabetic at age 7 and needs insulin to
survive. They said, quote, ``they worry that he won't be able
to afford it once he is off our insurance.''
Something must be done. Insulin doesn't make him better, it
keeps him, literally, alive. No one should be forced to live
under this strain or make incredibly difficult choices to
afford insulin. But according to available data that we will
learn more about this morning, about one in four people with
diabetes are rationing their insulin due to costs. Not
surprisingly, these patients were three times more likely than
patients who weren't rationing their insulin to struggle, to
maintain healthy glycemic control and experience adverse health
effects.
These stories and findings show just how urgent this issue
is. Lives really are at stake, which is why last year
Congressman Tom Reed and I, as co-chairs of the Congressional
Diabetes Caucus, conducted an enquiry into the rising costs of
insulin. The report ultimately depicts a system of perverse
payment incentives and methodologies, a lack of transparency
and pricing, and outdated patient regulations.
These market failures have allowed a handful of players
along the insulin distribution pipeline, from manufacturers to
health insurers, to capitalize on their strategic positions,
driving up the price of insulin and minimizing competition. Now
it is not my intention to blame these players, but to further
examine where the pressure points are throughout the supply
chain that are driving the increased costs of insulin to the
patient.
And this discussion is critical in advance of next week's
hearing when we will have several of the key players in front
of this committee to discuss the drivers directly. I look
forward to hearing from all of our witnesses today who
collectively represent a range of key stakeholder associations
and networks, clinicians, and research perspectives, and also
people with firsthand experiences with price challenges.
I want to thank each one of you for coming today and
sharing your stories with us. Bringing this conversation to
light is essential. Better understanding these factors will
help us inform the policy decisions and actions. Millions of
people who rely on insulin each day and sometimes many times a
day are counting on that. Thank you.
[The prepared statement of Ms. DeGette follows:]
Prepared Statement of Hon. Diana DeGette
Today, the Subcommittee holds its first hearing this
Congress on the rising costs of prescription drugs, which have
devastating real-life consequences for families around the
country.
We are here this morning to explore the impacts of climbing
insulin costs on the seven and a half million people in the
United States who rely on insulin to manage their blood sugar
levels and prevent debilitating complications every day.
Insulin ensures the health and well-being for millions of
people, and for the 1.25 million people with Type 1 diabetes,
it is a life-sustaining drug for which there is no substitute.
The scientists who made the discovery of insulin knew of
its life-saving importance. Even nearly 100 years ago, they
were concerned that the discovery would be commercialized to
the point of being put out of financial reach for those who
needed it. To avoid this, they sold the insulin patent to the
University of Toronto for a single dollar.
Yet today, skyrocketing prices are making it unaffordable
for millions of people in this country: the price of insulin
has doubled since 2012, after nearly tripling in the previous
10 years.
We have been hearing stories and reading disturbing news
reports for too long. People are skipping doses, failing to pay
rent or buy groceries, and even resorting to an insulin `black
market' in order to afford their insulin.
Just this past Friday at home, I heard from more of my
constituents as to just how real this cost crisis is for them
every day.
I heard from Sierra, who does not have insurance and makes
too much to qualify for Medicaid, who has been struggling over
the past year and a half to pay for her insulin. She has made
significant adjustments in her life in order to cut other costs
in her personal life-selling her car and living with relatives.
Even in rationing her insulin-not changing her pump
reservoirs as directed-she's paying over $700 a month. Sierra
shared that she's currently living day-to-day; bottle-to-
bottle.
Parents of children with diabetes are also living with this
constant stress and worry.
For instance, last year, I heard from a parent in New York
whose 23-year-old-son was diagnosed as a type 1 diabetic at age
7 and needs insulin to survive. They said, [quote] ``worry that
he won't be able to afford it once he's off our insurance. . .
. Something must be done. Insulin doesn't make him better, it
keeps him literally alive."
No one should be forced to live under this strain or be
forced to make incredibly difficult choices to be able to
afford insulin.
But according to available data that we'll learn more about
this morning, roughly 1 in 4 people with diabetes are rationing
their insulin due to cost.
Not surprisingly, those patients were three times more
likely than patients who weren't rationing their insulin to
struggle to maintain healthy glycemic control and experience
adverse health effects.
These stories and findings show just how urgent the matter
of skyrocketing costs of insulin is.
Lives are at stake.
Which is why last year, Congressman Tom Reed and I, as co-
chairs of the Congressional Diabetes Caucus, conducted an
inquiry into the rising prices of insulin.
Our report ultimately depicts a system of perverse payment
incentives and methodologies, a lack of transparency in
pricing, and outdated patent regulations.
These market failures have allowed a handful of players
along the insulin distribution pipeline--from manufacturers to
health insurers--to capitalize on their strategic positions,
driving up the price of insulin and minimizing competition.
Today's hearing is not intended to assign blame to these
players, but instead further examine where the pressure points
are throughout the supply chain that are driving the increased
cost of insulin to the patient.
This discussion is critical in advance of next week's
hearing when we will have several of these key players in front
of the Committee to discuss these drivers directly.
I look forward to hearing from our witnesses today, who
collectively represent a range of key stakeholder associations
and networks, clinician and research perspectives, and personal
first-hand experiences related to insulin price challenges.
Thank you for joining us to share not only the real-life
consequences of this broken system, but potential solutions
several of your organizations have proposed.
Bringing this conversation to light is an essential step
toward transparency and accountability.
Better understanding these factors will help inform the
policy decisions and actions that will be necessary to help
bring down insulin prices.
Millions of people who rely on insulin each day, and
sometimes several times a day, are counting on that.
Ms. DeGette. And now I recognize the ranking member for 5
minutes.
OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEATH OF KENTUCKY
Mr. Guthrie. Thank you, Chair DeGette, for bringing this
important hearing together. And we are working together to try
to get to the bottom of what is happening in the insulin prices
and hopefully use that as a case study for looking at others.
The rebates are not only in the insulin space, but the Centers
for Disease Control and Prevention estimates that more than 30
million individuals or 9.4 percent of the population in the
United States have diabetes.
A 2018 American Diabetes Association report found that
diabetes is the most expensive chronic disease in the United
States. According to this analysis, the economic cost of a
diagnose of diabetes in the United States in 2017 was $327
billion. The CDC estimates in 2016 about 6.7 million Americans
aged 18 and older used insulin.
The insulin prescribed in diabetics today is different than
insulin discovered over a hundred years ago. Changes to this
lifesaving drug over the years meant that according to the
American Diabetes Association, almost everything has changed
over the past 50 years for Americans with diabetes including
how long a diabetic can expect to live. However, the list price
of insulin has increased substantially over the past decade,
putting this lifesaving drug out of reach for too many
Americans.
According to a 2016 study, the average list price of
insulin nearly tripled between 2002 and 2013. Many argue that
while list prices have been increasing, net prices have not
grown as rapidly having stayed relatively the same or even gone
down. For example, one popular insulin product had its list
price increase from $391 in 2014 to $594 in 2018, a 51.9
percent increase. During the same time, however, the product's
net price decreased by 8.1 percent, going from $147 to $135.
While no one is supposed to pay the list price for insulin,
some patients end up paying the list price or close to it
especially if they are uninsured or underinsured. An uninsured
patient that purchases insulin at the pharmacy is likely to pay
the list price for the medicine unless they have access to a
Patient Assistance Program. Further, even if a patient has
insurance, increasing list prices oftentimes directly harm
patients by increasing their out-of-pocket costs. If they have
a high deductible health plan as many Americans do today, they
are likely to go pay the list price or close to it until they
reach their deductible.
While Patient Assistance Programs can be a helpful resource
to patients, we have heard from patients and patient advocacy
groups that it can be difficult to qualify for a Patient
Assistance Program. Patient Assistance Programs are viewed as a
helpful resource, but only as a Band-Aid and short-term
solution until we can find a permanent solution that improves
access to and affordability of medicine such as insulin. In
addition, we have heard the formulary exclusions are helpful to
drive down costs to the plans. We have also heard that they are
having an impact on patients in the diabetic community.
We have heard stories that some patients have had their
insurers change the insulin products covered by their plan year
to year, or even in some cases in the middle of the year
causing them to have to switch to a different insulin product
or pay a higher price for the insulin that has been working
best for them. Doctors and patients have shared that it can
take days or weeks for someone to adjust to a new insulin if
they adjust at all.
The prescription drug supply chain is complex, and it lacks
transparency. There is limited public information regarding
changes in net prices due to a lack of transparency surrounding
rebates and other price concessions. This makes it difficult to
fully understand why prescription drug prices like insulin have
continued to rise for patients, especially uninsured and
underinsured patients. This lack of transparency makes it hard
to determine who benefits from increases in list prices, but we
know who loses: the patient.
Prescription drug prices affects every American and that is
why today's discussion using insulin as a case study is an
important step to better understand the rising costs of
prescription drugs in our country and how we can work to make
lifesaving prescription drugs more affordable for all patients
again. I thank all of our witnesses for being here today and
sharing your testimony and I look forward to this important
discussion and I yield back.
[The prepared statement of Mr. Guthrie follows:]
Prepared Statement of Hon. Brett Guthrie
Thank you, Chair DeGette, for holding this very important
hearing. The Centers for Disease Control and Prevention (CDC)
estimates that more than 30 million individuals--or 9.4 percent
of the population--in the United States have diabetes. A 2018
American Diabetes Association report found that diabetes is the
most expensive chronic disease in the United States. According
to this analysis, the economic cost of diagnosed diabetes in
the United States in 2017 was about $327 billion.
The CDC estimates that, in 2016, about 6.7 million
Americans aged 18 and older used insulin. The insulin
prescribed to diabetics today is different than the insulin
discovered over 100 years ago. Changes to this life-saving drug
over the years have meant that, according to the American
Diabetes Association, ``almost everything has changed over the
past 50 years for Americans with diabetes'' including how long
a diabetic can expect to live.
However, the list price of insulin has increased
substantially over the past decade, putting this life saving
drug out of reach for too many Americans. According to a 2016
study, the average list price of insulin nearly tripled between
2002 and 2013. Many argue that while list prices have been
increasing, net prices have not grown as rapidly, have stayed
relatively the same, or have even gone down. For example, one
popular insulin product had its list price increase from $391
in 2014 to $594 in 2018--a 51.9 percent increase. During the
same time, however, the product's net price decreased by 8.1
percent, going from $147 to $135.
While no one is supposed to pay the list price for insulin,
some patients end up paying the list price, or close to it--
especially if they are uninsured or underinsured. An uninsured
patient that purchases insulin at the pharmacy is likely to pay
the list price of the medicine unless they have access to a
patient assistance program. Further, even if a patient has
insurance, increasing list prices oftentimes directly harms
patients by increasing their out-of-pocket costs. If they have
a high deductible health plan, as many Americans do today, they
are likely going to pay the list price, or close to it, until
they reach their deductible.
While patient assistance programs can be a helpful resource
to patients, we have heard from patients and patient advocacy
groups that it can be difficult to qualify for a patient
assistance program. Patient assistance programs are viewed as a
helpful resource, but only a band-aid and short-term solution
until we can find a permanent solution that improves access to
and affordability of medicines such as insulin.
In addition, we have heard that formulary exclusions are
helpful to drive down costs to the plans, but we've also heard
that they are having an impact on patients in the diabetic
community. We have heard stories that some patients have had
their insurers change the insulin products covered by their
plan year to year or even in some cases in the middle of the
year, causing them to have to switch to a different insulin
product or pay a much higher price for the insulin that has
been working best for them. Doctors and patients have shared
that it can take days or weeks for someone to adjust to a new
insulin, if they adjust at all.
The prescription drug supply chain is complex and lacks
transparency. There is limited public information regarding
changes to net prices due to a lack of transparency surrounding
rebates and other price concessions. This makes it difficult to
fully understand why prescription drug prices, like insulin,
have continued to rise for patients, especially uninsured and
underinsured patients. This lack of transparency makes it hard
to determine who benefits from increases in list prices. But we
know who loses--the patient.
Prescription drug pricing effects every American and that's
why today's discussion using insulin as a case study is an
important step to better understand the rising cost of
prescription drugs in our country and how we can work to make
lifesaving prescription drugs more affordable for all patients
again.
I thank our witnesses for being here today and being part
of this important discussion. I yield back.
Ms. DeGette. The Chair thanks the gentleman and now
recognizes the chairman of the full committee, Mr. Pallone, for
5 minutes for purposes of an opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Madam Chair. Today's hearing
continues our important effort to examine the high cost of
prescription drugs. It is the first of a two-part hearing the
subcommittee will hold on the urgent matter of skyrocketing
insulin costs in the U.S.
American families are suffering from the ongoing and
staggering price hikes of insulin. We have all heard the
stories of people with diabetes who have gone to extreme
measures to obtain the insulin they need as well as those who
have died because they could not afford the lifesaving drug. Of
the 30 million Americans living with diabetes, over seven
million of them rely on one or more formulations of insulin and
no one should suffer because the high price of insulin puts it
out of reach. Yet that is exactly what is happening.
Over the last 20 years, prices for the most commonly
prescribed insulins have increased by more than 700 percent
accounting for inflation. For instance, a vial that once cost
$20, two decades ago, now costs over $250, and there are
reports of patients paying more than $400 per month for their
insulin. And this is particularly devastating for the
uninsured, people who have high deductible insurance plans, and
Medicare Part D prescription drug beneficiaries who may be in
the coverage gap.
We must find workable solutions to support the development
of high-quality drugs and insulin innovations while also
ensuring that no one living with diabetes is ever forced to put
their life at risk by rationing their insulin because they
can't afford it. As the committee continues to explore this
issue, it is important to hear today about the drivers of these
steep prices and their consequences on the lives of people
living with diabetes.
Multiple factors influence the price the patient pays for
insulin at the pharmacy. The lack of transparency and financial
agreements between stakeholders in the supply chain makes an
already convoluted system even more complex, but at least some
of the pressure points are clear. For instance, we know that
insulin manufacturers set the list price of their drugs and may
engage in practices that prevent the introduction of generics.
We also know that Pharmacy Benefit Managers--PBMs--
influence these prices within and throughout the supply chain
through negotiated rebates. And we are going to have
representatives of these companies before the committee next
week and I look forward to asking them about the examples and
issues we will hear about this morning.
Finally, as with other drugs, insulin pricing is a complex
issue that will require multiple policy solutions. However, I
have concerns with the recent proposed rule that would
eliminate rebates in Medicare Part D and Medicaid. There is
nothing in this proposed rule that would actually require drug
manufacturers to reduce their list prices and Health and Human
Services' own actuary estimates that the proposal would
increase government spending by nearly $200 billion while
premiums and out-of-pocket costs would go up for the majority
of Medicare beneficiaries.
So I strongly believe that the cost of prescription drugs
including insulin must be addressed, but I am concerned that
this is not the right approach what has been put in place by
the Trump administration. So, finally, if I could just say, the
health of millions of people living with diabetes depends on
thoughtful policy solutions to address the high cost of
insulin.
I thank our witnesses for joining us today. Your firsthand
accounts, research, and recommendations will be invaluable
contributions as we continue to examine this issue. I don't
know if anybody wanted my time. And, if not, I will yield back.
Thank you, Madam Chair.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Today's hearing continues our efforts to examine the high
costs of prescription drugs. It is the first of a two-part
hearing this subcommittee will hold on the urgent matter of
skyrocketing insulin costs in this country.
American families are suffering from the ongoing and
staggering price hikes of insulin.
We have all heard the stories of people with diabetes who
have gone to extreme measures to obtain the insulin they need,
as well as those who have died because they could not afford
the lifesaving drug.
Of the 30 million Americans living with diabetes, over 7
million of them rely on one or more formulations of insulin.
No one should suffer because the high price of insulin puts
it out of reach.
Yet, that is exactly what is happening. Over the last 20
years, prices for the most commonly prescribed insulins have
increased by more than 700 percent, accounting for inflation.
For instance, a vial that once cost $20 two decades ago now
costs over $250. There are reports of patients paying more than
$400 per month for their insulin.
This is particularly devastating for the uninsured, people
who have high-deductible insurance plans, and Medicare Part D
prescription drug beneficiaries who may be in the coverage gap.
We must find workable solutions to support the development
of high-quality drugs and insulin innovations while also
ensuring that no one living with diabetes is ever forced to put
their life at risk by rationing their insulin because they
cannot afford it.
As the Committee continues to explore this issue, it is
important to hear today about the drivers of these steep prices
and their consequences on the lives of people living with
diabetes.
Multiple factors influence the price the patient pays for
insulin at the pharmacy. The lack of transparency in financial
agreements between stakeholders in the supply chain makes an
already convoluted system even more complex. But at least some
of the pressure points are clear.
For instance, we know that insulin manufacturers set the
list prices of their drugs and may engage in practices that
prevent the introduction of generics.
We also know that Pharmacy Benefit Managers--PBMs--
influence these prices within and throughout the supply chain
through negotiated rebates.
We are going to have representatives of these companies
before the Committee next week and I look forward to asking
them about the examples and issues we will hear about this
morning.
Finally, as with other drugs, insulin pricing is a complex
issue that will require multiple policy solutions. However, I
have concerns with the recent proposed rule that would
eliminate rebates in Medicare Part D and Medicaid. There is
nothing in this proposed rule that would actually require drug
manufacturers to reduce their list prices. HHS's own actuary
estimates that the proposal would increase government spending
by nearly $200 billion, while premiums and out-of-pocket costs
would go up for the majority of Medicare beneficiaries. I
strongly believe that the cost of prescription drugs, including
insulin, must be addressed, but I am concerned that this is not
the right approach.
The health of millions of people living with diabetes
depends on thoughtful policy solutions to address the high cost
of insulin.
Thank you to all our witnesses for joining us today. Your
first-hand accounts, research, and recommendations will be
invaluable contributions as we continue to examine this issue.
Thank you, and I yield back.
Ms. DeGette. The Chair thanks the gentleman and now
recognizes the ranking member of the full committee, Mr.
Walden, for 5 minutes for purposes of an opening statement.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Thank you, Madam Chair, and I deeply appreciate
you having this hearing. It is really important. My grandfather
suffered from diabetes a long time ago and I can remember as a
little kid he lost both legs to gangrene. And that was, you
know, you just don't understand that stuff as a kid. My cousin
has dealt with diabetes her entire life. So this is really
important stuff. And I know your family has issues.
And we have to get to the bottom of this because this is a
lifelong disease and it affects millions of Americans including
more than 300,000 Oregonians. And due to the significant
research and development efforts of biopharmaceutical
companies, there are over 30 types of innovative insulin
available in the U.S. and come in a variety of different
formulations and different delivery mechanisms, and there are
also obviously numerous oral medications available for type 2
diabetes to help manage the disease.
I am proud our committee has championed efforts to
accelerate the discovery, development, and delivery of
innovative drugs over the last two years under the bipartisan
leadership of former chairman Fred Upton and of course
Congresswoman DeGette. Congress enacted the 21st century Cures
Initiative and our work is not done. We need to continue to
promote innovation, but we have got to balance it with
affordability and that means competition. As we heard last
Congress during our hearing examining the complexity of the
prescription drug supply chain, that supply chain has evolved
in a way that has ended up, in part, harming some patients at
the pharmacy counter.
At that hearing I specifically asked the witnesses about
the price of insulin and learned that the net price has not
changed much over the last few years--the net price. But the
list price or sticker price has increased, and pharmaceutical
manufacturers are providing larger rebates, and discounts to
their supply chain partners to lower that net price of the
medicine.
While no one is supposed to pay the list price for insulin,
some patients do. They do pay that list price, or they pay
something close to it when they go to get their drugs at the
counter. One study found the average price of an insulin
prescription in Oregon went from $322 in 2012 to $662 in 2016.
That is a hundred percent increase, period.
While these prices do not reflect all the discounts,
rebates or coupons offered for a product, an insured individual
who has not met their deductible, or an uninsured person may be
asked to pay this amount at the pharmacy counter. Moreover, the
co-insurance paid by many with insurance for their
prescriptions is typically a percentage of that list price, not
the negotiated net price. The higher the list price, the more
these patients pay.
The three major manufacturers of insulin in the United
States each offer Patient Assistance Programs and we are glad
for that and other forms of assistance to help patients access
their medicines. These programs are not a long-term solution
though to the affordability and access issues, but they are an
important effort in the interim to help patients access their
lifesaving medicines.
I hope to learn more from the witnesses today about how
these programs are working, and I appreciate your testimony.
Some providers also have certain patients pay for their
medicines. For example, when we examined a 340B drug pricing
program last Congress, we heard that some 340B-covered entities
passed along all or part of their discounts to provide certain
patients with reduced-price medicines including insulin. Since
340B entities can purchase some insulin products at a
significant discount, diabetic patients could really benefit
from having these savings pass through directly to them.
I also want to ask that we continue our work from last
Congress with investigating these cost drivers, Madam Chair, in
our healthcare system and that is from top to bottom. As I have
said on many occasions, healthcare costs continue to rise in
the United States, and whether it is hospital care, or
physician, and clinical services, or prescription drugs, these
expenditures are all interrelated as a consumer. So we need a
holistic approach to examine the cost drivers in our healthcare
system to identify long-term solutions to this complex problem.
I want to thank the Chair for putting together this
important hearing, this excellent panel. We will benefit from
your views and your testimony today. And with that I would
yield the balance of my time to Dr. Burgess.
[The prepared statement of Mr. Walden follows:]
Prepared Statement of Hon. Greg Walden
I am glad we are having this important hearing today. Thank
you, Chair DeGette, for holding it.
Diabetes is a life-long disease that impacts the lives of
millions of Americans, including more than 300,000 Oregonians.
Due to the significant research and development efforts of
biopharmaceutical companies, there are over 30 types of
innovative insulin available in the United States that come in
a variety of different formulations and in different delivery
mechanisms. There are also numerous oral medications available
for type 2 diabetics to help manage their disease.
I am proud that our committee has championed efforts to
accelerate the discovery, development, and delivery of
innovative drugs. Over two years ago, under the bipartisan
leadership of former Chairman Fred Upton and Congresswoman
Diana DeGette, Congress enacted the 21st Century Cures
initiative. Our work is not done, however. We need to continue
to promote innovation while balancing it with affordability and
competition.
As we heard last Congress during our hearing examining the
complexity of the prescription drug supply chain, the supply
chain has evolved in a way that has ended up harming some
patients at the pharmacy counter. At that hearing, I
specifically asked the witnesses about the price of insulin and
learned that the net price has not changed much over the past
few years. But, the list price or ``sticker price'' has
increased and pharmaceutical manufacturers are providing larger
rebates and discounts to their supply chain partners to lower
the net price of the medicine.
While no one is supposed to pay the list price for insulin,
some patients do pay the list price, or close to it, at the
pharmacy counter. One study found that the average price of an
insulin prescription in Oregon went from $322 in 2012 to $662
in 2016--an increase of over 100 percent. While these prices do
not reflect all the discounts, rebates, or coupons offered for
a product, an insured individual who has not met their
deductible, or an uninsured person, may be asked to pay this
amount at the pharmacy counter. Moreover, the coinsurance paid
by many with insurance for their prescriptions is typically a
percentage of the list price, not the negotiated net price. The
higher the list price, the more these patients pay.
The three major manufacturers of insulin in the United
States each offer patient assistance programs and other forms
of assistance to help patients access their medicines. These
programs are not a long-term solution to affordability and
access issues, but they are an important effort in the interim
to help patients access their life-saving medicines. I hope to
learn more from the witnesses today about how these programs
are working.
Some providers also help certain patients pay for their
medicines. For example, when we examined the 340B Drug Pricing
Program last Congress, we heard that some 340B covered entities
passed along all or part of their discounts to provide certain
patients with reduced price medicines, including insulin. Since
340B entities can purchase some insulin products at a
significant discount, diabetic patients could really benefit
from having these savings passed through directly to them.
I also want to ask that we continue our work from last
Congress investigating the cost drivers in our healthcare
system from top to bottom. As I've said on many occasions,
healthcare costs continue to rise in the United States and
whether it's hospital care, physician and clinical services, or
prescription drugs, these expenditures are all interrelated. A
holistic approach to examining the cost drivers in our
healthcare system is needed to identify long-term solutions to
this complex problem.
I want to thank the Chair for putting together such an
excellent panel that is reflective of so many different voices
in the diabetic community, and I thank our witnesses for being
here as well.
Ms. DeGette. The gentleman is recognized.
Mr. Burgess. Thank you, Ms. Chairman.
And just to point out, over the last two decades there have
really been no major changes in the chemical makeup of insulin,
no changes in the importance of insulin for insulin-dependent
diabetics. So under normal circumstances, in the laws of
economics you would expect these trends to decrease, not
increase prices.
So certainly, I look forward to hearing what our panel
today has to say about the massive price increases and perhaps
some ideas of what Congress can do to ensure that nobody is
forced to choose between insulin and the other necessities of
life. And I yield back.
Ms. DeGette. The gentleman yields back. I ask unanimous
consent that the Members' written opening statements be made
part of the record. Without objection, they will be entered
into the record.
I ask unanimous consent for Mr. Rush, Mr. Welch, Ms.
Barragan, Mr. Soto, Mr. Carter, and Mr. Bucshon to participate
in today's subcommittee hearing, including the opportunity to
ask questions of witnesses and submit a written opening
statement into the record.
Without objection, so ordered.
I now want to introduce our panel of witnesses for today's
hearing. First, we have Ms. Gail deVore who is a patient
advocate and Coloradoan living with type 1 diabetes for 47
years.
Gail, it is great having you here today.
Dr. William T. Cefalu who is the chief scientific medical
and mission officer of the American Diabetes Association,
welcome.
Dr. Alvin C. Powers, who is here representing the Endocrine
Society and the director of both the Vanderbilt Diabetes Center
and the Division of Diabetes, Endocrinology, and Metabolism at
the Vanderbilt University Medical Center, welcome.
Dr. Kasia Lipska, Clinical Investigator at the Yale-New
Haven Hospital Center for Outcomes Research and Evaluation,
Yale University School of Medicine; Ms. Christel Marchand
Aprigliano, Chief Executive Officer, Diabetes Patient Advocacy
Coalition, welcome to you.
And Dr. Aaron J. Kowalski who is the Chief Mission Officer
of the Juvenile Diabetes Research Foundation, welcome. Welcome
to all of you and thank you for appearing before the
subcommittee today.
You are aware, I know, that the committee is holding an
investigative hearing and so when doing so we have the practice
of taking testimony under oath. Does anyone have an objection
to testifying today under oath?
Let the record reflect that the witnesses have responded
no.
The Chair then advises that under the rules of the House
and under the rules of the committee, you are entitled to be
accompanied by counsel. Do you desire to be accompanied by
counsel during your testimony today?
Let the record reflect that the witnesses have responded
no.
So if you would, please rise and raise your right hand so
you may be sworn in.
[Witnesses sworn.]
Ms. DeGette. Let the record reflect that the witnesses have
responded affirmatively, and you now may be seated. Thank you.
You are now under oath and subject to the penalties set forth
in Title 18 Section 1001 of the U.S. Code.
The Chair will now recognize our witnesses for a 5-minute
summary of their written statements. In front of each of you
there is a microphone and a series of lights. The light will
turn yellow when you have a minute left and it turns red to
indicate your time is coming to an end, and we appreciate you
giving us your opinions in that 5-minute period.
So, Ms. deVore, I would like to recognize you first. You
are recognized for 5 minutes.
STATEMENTS OF GAIL deVORE, PATIENT ADVOCATE, COLORADOAN, LIVING
WITH TYPE 1 DIABETES FOR 47 YEARS; WILLIAM T. CEFALU, M.D.,
CHIEF SCIENTIFIC, MEDICAL & MISSION OFFICER, THE AMERICAN
DIABETES ASSOCIATION; ALVIN C. POWERS, M.D., ENDOCRINE SOCIETY
REPRESENTATIVE, DIRECTOR OF VANDERBILT DIABETES CENTER,
DIRECTOR OF DIVISION OF DIABETES, ENDOCRINOLOGY, AND
METABOLISM, VANDERBILT UNIVERSITY MEDICAL CENTER; KASIA J.
LIPSKA, M.D., CLINICAL INVESTIGATOR, YALE-NEW HAVEN HOSPITAL
CENTER FOR OUTCOMES RESEARCH AND EVALUATION, YALE UNIVERSITY
SCHOOL OF MEDICINE; CHRISTEL MARCHAND APRIGLIANO, M.S., CHIEF
EXECUTIVE OFFICER, DIABETES PATIENT ADVOCACY COALITION; AND
AARON J. KOWALSKI, PH.D., CHIEF MISSION OFFICER, JDRF
STATEMENT OF GAIL deVORE
Ms. deVore. Thank you, Madam Chair. Thank you, members of
the committee, for allowing me to speak today. My name is Gail
deVore. I've lived in Denver for 36 years. My husband is a
third-generation Denverite. I'm 58 years old and have had type
1 diabetes since Valentine's Day of 1972. That's 47 years, 1
month, and 19 days. My husband and I are members of the middle
class. We do not live extravagantly. We are very careful with
our budget. We have decent insurance, yet the cost of taking
care of myself as a diabetic eats a significant hole in our
budget every month. I drive a 17-year-old car that's needed new
struts for a few years. It's been a few years since we've had a
real vacation, and it's seriously doubtful that either of us
will ever have the opportunity to retire.
Just as we all need air to breathe, every person on this
earth requires insulin to stay alive. Most people's bodies make
their own insulin. However, in a type 1 diabetic, our
autoimmune system has malfunctioned and killed off those cells
that make insulin. We require injections of insulin to stay
alive. Without insulin our blood glucose levels rise, our blood
turns acidic, we fall into a horrible coma, and we will die
without insulin.
A little more than a year after I was diagnosed, there came
a time that I went without insulin for about 12 hours. Toward
the end of that 12 hours I was in a coma. My parents drove me
to the hospital an hour away from our home. I spent 2 days in a
coma in the ICU and many more days recovering in the hospital.
My parents were convinced I was not going to live. I will
always need exogenous insulin. Every hour of every day of every
week of every month of every year for the rest of my life I
need insulin.
These four bottles are one months' prescription worth
$1,400. In 1972, four bottles of insulin cost my family about
five dollars. With an adjustment for cost of living, that would
be no more than a hundred dollars today. Every bottle, each
bottle is about $350 in a cash price at my pharmacy at the full
price. For diabetics without insurance coverage or diabetics
who have a high deductible plan or when insurance doesn't cover
the kind of insulin our doctor wants us to take, that's what we
pay out of our own pockets and out of our own budgets to
survive. My current insurance actually covers this kind of
insulin at a reasonable copay.
I also have a prescription for a newer insulin called
Fiasp. This is a faster acting insulin with no other
alternatives on the market currently that compete with this
formula. It's not on the formulary of my insurance. It's
$346.99 at the Kroger Pharmacy near me. There is no way I can
afford to use the prescription as it's written every month. To
make it last longer, I ration it by diluting with Novolog,
which is against the advice of both Novo Nordisk and my doctor.
I am personal friends with many other diabetics who must
come up with 800, 1,200 and more at the pharmacy window before
they meet their deductibles, or an insurance does not cover
their type of insulin. We all find creative ways to afford
insulin. Some insurance plans require us to purchase 60 and 90
days of insulin at one time. That makes the immediate price tag
double or triple. It has to be paid in full upon delivery.
Even though I've had type 1 diabetes for most of 5 decades,
I'm healthy. Medical research shows that it's highly unlikely
that I will ever suffer from complications from diabetes as
long as I maintain the current level of control that I have
now. But the price of insulin directly impacts how well I can
take care of myself. I'm not your typical diabetic. I know my
way around the Government. I know who to call and I have access
to some high-level administrators.
I sit on the board of directors or committees of the
Nightscout Foundation, the JDRF, and the Colorado Consumer
Health Initiative. I recently helped get a piece of legislation
passed in Colorado that assists all people with chronic
illness. It passed unanimously through both Houses and signed
by our Governor just 10 days ago. I'm an advocate and I am a
problem solver.
However, the reality is there are no solutions for
affording insulin. There are coupons and there are assistance
programs, but they are not available, nor do they work for
every diabetic. My friend, Clayton McCook, who lives in
Oklahoma City has a coupon that knocks $50 off of every bottle
of insulin for his 10-year-old daughter Lily. Last week that
brought the cost down to $1,398 for the month.
The relief we need is right now. Not next week. Not next
year. Before the discovery of insulin, every child that had
diabetes died. There are no alternatives to insulin. It's been
almost 100 years since my heroes, Dr. Banting and Dr. Best,
figured out that insulin would save our lives. When they sold
their patents for $1 each to the Eli Lilly Corporation, they
intended it would always be affordable and accessible. Children
and adults are still dying and suffering from disabling
complications only because insulin is no longer affordable.
Thank you, Committee, for allowing me to testify today.
[The prepared statement of Ms. deVore follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thank you so much, Ms. deVore.
The Chair now recognizes Dr. Cefalu for 5 minutes.
Doctor?
STATEMENT OF WILLIAM T. CEFALU
Dr. Cefalu. Thank you, Chair DeGette, Ranking Member
Guthrie, and all members of this subcommittee for the
opportunity to discuss insulin affordability. Over 30 million
Americans have diabetes and about 7.4 million of them rely on
insulin. For millions of people with diabetes, including all
those with type 2 diabetes, access to insulin is literally 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 people affected by
diabetes, the American Diabetes Association believes that no
individual in need of insulin should 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.
Banting and Best sold the patent to the University of
Toronto for $3 to ensure affordable insulin for all who need
it. Since that discovery, further innovations have resulted in
new formulations of insulin, from the animal insulin to the
human insulin to the 1990s, the analog insulins. In recent
years, there have been fewer advancements, yet prices continue
to rise. 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 who need
insulin to survive.
Dangerously, more than a quarter of individuals report
making changes to their purchase of insulin due to cost. When
people cannot afford their insulin, they skip doses, or they
take less than they need. This is called rationing. This puts
them at risk for the devastating and sometimes deadly
complications. If a person has type 1 diabetes and goes without
insulin for as little as a day, they can develop diabetic
ketoacidosis which can lead to death. Increasingly, ADA has
heard stories of individuals forced to ration their insulin or
forced to go without other important necessities so they can
purchase the amount of insulin they need.
We needed to act on behalf of all those who struggle. In
November of 2016, the ADA board of directors unanimously passed
a resolution on all entities in the insulin supply chain to
substantially increase transparency and pricing and to ensure
that no person with diabetes is denied affordable access to
insulin. ADA's resolution also called upon Congress to hold
hearings with all entities in the insulin supply chain to
identify the reasons for the dramatic increases and to take
action to ensure that all people who use insulin have
affordable access to the insulin they need. In concert with the
board resolution, ADA initiated a grassroots petition calling
for the same actions.
Since launching this in 2016, over 480,000 people have
signed this petition. We continue to hear from individuals who
are impacted by the high cost of insulin. For example, Chair
DeGette, we heard from Ann in Colorado. Ann has two young
children who require insulin every day for life. At the
beginning of the year, their monthly costs for insulin were
$875. When the pharmacist asked Ann for this sum of money, she
was shocked. She asked the pharmacy to run it through
insurance. Unfortunately, he already had. Ann had to leave the
medication at the pharmacy, go home and comb through her
monthly budget to make sure they had enough money to pay for
the medicine that would keep her two children alive.
As a physician, I've witnessed firsthand how the incredible
research advances from biomedical research have dramatically
improved the lives of those with diabetes. However, this
incredible innovation does not benefit those who can't afford
their treatments. The ADA established an Insulin Access and
Affordability Working Group to ascertain the full scope of the
problem and advised the ADA on strategies to lower the cost of
insulin. The Working Group held discussions with more than 20
stakeholders representing entities throughout the supply chain.
The Working Group published a white paper in Diabetes Care in
May of last year outlining what we learned. In follow up, the
ADA published a set of public policy recommendations that we
believe will help reduce the cost of insulin.
I look forward to working with you, and others in Congress
to develop strategies to lower the rising cost of insulin. And
thank you, Chair Degette, Ranking Member Guthrie, and all
members of this subcommittee for holding this very important
hearing.
[The prepared statement of Dr. Cefalu follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thank you so much, Doctor.
The Chair now recognizes Dr. Powers for 5 minutes for an
opening statement.
STATEMENT OF ALVIN C. POWERS
Dr. Powers. Good morning. Thank you, Chair DeGette, Ranking
Member Guthrie, and members of the subcommittee for the
opportunity to provide a physician's perspective on the scope
of the problem of insulin affordability. I'm Alvin Powers and
I'm a physician scientist and I'm here representing the
Endocrine Society. With over 18,000 members, the Endocrine
Society is the world's oldest and largest organization of
scientists and physicians devoted to hormone research and
caring for patients who have hormone related conditions like
diabetes.
One of the most frequent concerns we hear from our members
is the rising cost of insulin. As the director of the
Vanderbilt Diabetes Center, our healthcare providers and I have
many patients who struggle to afford their insulin.
The need to address this growing problem is urgent. People
are rationing their insulin and foregoing other necessities.
This leads to serious health problems and hospitalizations.
While I live in the diabetes belt in Tennessee, the story is no
different in Colorado, Kentucky, or elsewhere in the U.S. In
this broad context of drug pricing debate, the problem of
insulin affordability, I believe, is unique and merits special
attention.
Here's a few reasons why I think it's unique. We've already
heard that more than seven million people use insulin each day
to manage their diabetes and that people who have type 1
diabetes must have insulin to survive. There is no other
lifesaving drug used by so many people who would die in a
matter of days if they didn't take it. We've also heard about
the rising price of insulin over the past 15 years and it's
difficult to understand how a drug that has not changed has
skyrocketed in price. In 2017, expenditures for insulin in the
United States reached $15 billion and three of the top ten
medication costs were for a type of insulin.
We've also heard about how insulin has been around a long
time. After scientists discovered it in 1921 and saw its
miraculous effect on people with diabetes, Frederick Banting,
one of the co-discoverers says, ``Insulin belongs to the world,
not to me.'' The discoverers as we've mentioned have sold the
patent so that all patients would have access. However, it
seems that exactly the opposite has happened, especially in the
United States.
Let me illustrate the challenges that our patients face.
For example, if I'm at my office seeing a patient who has type
1 diabetes who requires injections of both the long-acting and
a short-acting insulin each day, I prescribe both types of
insulin. But while I'm sitting with the patient, I have no idea
how much my patient will pay of that because the electronic
health systems don't communicate patients' specific benefits.
When she goes to the pharmacy, she learns that she owes
$1,200 for her four bottles of insulin that month, and why,
it's because she has a high-deductible plan and it's January.
This scenario could be true for many working Americans and many
in this room who have high-deductible health plans. Our insulin
supply chain is broken, unfair, and dangerous. Our patients
deserve better.
Here are some observations and suggestions about the
insulin supply chain. No one understands why insulin cost is
rising. There's a lack of transparency and how drug prices are
negotiated. Rebates between manufacturers, PBM, and health
plans are not passed along to consumers. Patients have
increasingly high-deductible health plans dramatically
increasing their out-of-pocket costs for lifesaving medications
like insulin.
Patient Assistance Programs are complicated, difficult to
navigate, and overly restrictive. Because of lack of
information, it's difficult for patients and their physicians
to have informed decisions about the cost of a patient's
insulin. And finally, regulatory systems and patent extensions
restrict the introduction of more generic or biosimilar
insulins. Now there's plenty of blame to go around, but that
doesn't solve the problem or help our patients.
Addressing the insulin cost problem is a priority for the
Endocrine Society. We recently released a position statement
outlining ways that stakeholders can improve insulin's
affordability and we've submitted this for the record. I
believe that we can make progress on insulin pricing and
affordability. This can be a road map and can be extrapolated
to other medications. I look forward to working with the
subcommittee as it moves forward in addressing this important
issue. Thank you very much.
[The prepared statement of Dr. Powers follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thank you so much, Dr. Powers.
The Chair now recognizes Dr. Lipska for her opening
statement.
Doctor?
STATEMENT OF KASIA J. LIPSKA
Dr. Lipska. Thank you, Chair DeGette, Ranking Member
Guthrie, and distinguished members of the Energy and Commerce
Subcommittee on Oversight and Investigations. Good morning. My
name is Kasia Lipska and I am an adult endocrinologist and a
research scientist on the faculty at the Yale School of
Medicine. I am really grateful for the opportunity to share
with you my experiences as a clinician and scientist. And I'd
like to state for the record I don't have any financial ties
whatsoever to drug manufacturers and my views are my own.
First, I would like to tell you about a patient of mine.
I'm going to call her Maria to protect her privacy. Maria is a
78-year-old woman who has type 2 diabetes but relies on insulin
injections several times a day to keep her blood sugars in
check. When she saw me, Maria's blood sugars were running too
high and this put her at risk for the complications of diabetes
including blindness, amputations, and kidney failure leading to
dialysis. So I turned to Maria and I said, ``Maria, it's time
to increase the dose of your insulin.'' But she turned back to
me and she said, ``Doc, I really can't afford to.''
Seeing patients like Maria led me to wonder just how common
this was, so in the summer of 2017 we conducted a survey of
patients at our Yale Diabetes Center to get a better picture.
We found that one in four patients who are prescribed insulin
reported using less than prescribed over the past year,
specifically because of cost. And not surprisingly, these same
patients had poor control over their blood sugar, so almost
threefold higher chances of having poor blood sugars.
These findings were published in JAMA Internal Medicine and
they have national implications. That's because our Center's
diabetes patients are similar to diabetes patients in the U.S.
and New Haven's demographics happen to be almost a perfect
mirror of our nation. So the takeaway here is that one-quarter
of our patients are rationing insulin and putting their health
at serious risk.
Insulin is a lifesaving drug. It keeps patients with
diabetes alive and out of the hospital. When patients use less
insulin than is necessary, they risk the devastating
complications we've already heard about. So let me give you a
sense of why so many patients ration insulin. One vial of
Lantus insulin--that's the long-acting insulin--costs over $200
at a Connecticut pharmacy. That's the best price available when
you go online and search. This can last for a week or a month
depending on the dose needed. If a patient wants to take this
insulin as a prefilled pen which is more convenient that will
run them almost $300. And this price has skyrocketed over the
past years.
Now Gail showed this to you earlier. What I'm holding here
in this glass vial is insulin. This is Humalog insulin. It's
quite small, right? This vial of insulin cost just $21 when it
first came on the market in 1996. It now costs $275. There is
nothing different about this Humalog. There is no innovation in
this Humalog. It's the same, exact insulin hormone. The only
thing that's changed is its price. Now Eli Lilly has made a big
deal about its launch of an authorized generic for half the
cost. But let's keep this in perspective: $137 is still seven
times the original price.
So what accounts for this? Drug makers and many
organizations who are beholding to them make excuses for why
prices have gone up. They say it's the fault of PBMs or the
wholesalers, but the bottom line is that drug prices are set by
drug makers. The list price of insulin has gone up and that's
the price that many patients pay. This is what needs to come
down, it's as simple as that.
I'm here today because as a clinician I have very little to
provide to my patients in the way of a solution. The Patient
Assistance Programs offered by many drug makers are not helping
much. It's hard to find a patient who actually qualifies for
their assistance. I can help my patients shop for the best
price of insulin, connect them with a discount pharmacy, but
these as was said before are Band-Aid solutions.
I think we have a moral obligation to address this problem.
My patients like Maria are counting on you. Thank you.
[The prepared statement of Dr. Lipska follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thanks so much, Doctor.
Now I am very pleased to recognize Ms. Aprigliano for 5
minutes.
STATEMENT OF CHRISTEL MARCHAND APRIGLIANO
Ms. Marchand Aprigliano. Thank you, Chairwoman DeGette and
Ranking Member Guthrie and members of the Oversight and
Investigations Subcommittee. My name is Christel Marchand
Aprigliano and I serve as the CEO of the Diabetes Patient
Advocacy Coalition. DPAC is a nonpartisan nonprofit dedicated
to promoting safety, quality, and access to diabetes
medications, devices, and services.
I was diagnosed with type 1 diabetes in 1983 and like
others here today have been personally impacted by the rising
list prices of insulin analogs. My testimony I hope will
provide a frank look at how our community is attempting to
obtain insulin and potential solutions. People with diabetes
who can least afford this life-essential drug are paying the
most and some are paying with their lives. And it wasn't always
this way, so let's take a look quickly about how we got here.
List prices are set by manufacturers and include rebates to
entice pharmacy benefit managers to place a drug on its
formulary, and it's a vicious circle. To get preferred status
on a formulary, manufacturers give higher rebates. The higher
the rebate, the higher the list price. And more people are
being subjected to list price than ever before as traditional
insurance plans have been replaced by plans that include high
deductibles and increased patient cost sharing based on a
percentage of the list price rather than a flat copayment, and
nobody has said before should ever pay list price.
In December of 2011, I paid $40 for a copay for insulin.
One month later, in January of 2012 that same prescription cost
me $1,269. My husband's employer had switched to a high-
deductible health plan which placed the burden of full list
price on us until we reached a $13,500 deductible. We had a new
baby and one source of income and we had put money aside and it
was meant for emergencies. Our emergency became insulin. For
many of my friends, this emergency happens every single month
and there is no more money to put aside.
Now we can discuss what options are currently available to
patients and even the financial help offered through copay
cards and Patient Assistance Programs are not enough to make
access affordable. For those with a commercial insurance, copay
cards may help offset the high cost of insulin. Those who
believe that copay cards push away from generic options, please
understand that for insulin analogs there are no generic
substitutes. This is why policies that seek to address Patient
Assistance Programs must be carefully nuanced to address
potential abuses of the system and not punish the patients who
depend upon them.
To circumvent the broken rebate system, nonprofit
foundations created Patient Assistance Programs to help those
who are uninsured, underinsured, or facing a financial crisis.
However, these can fail. I can personally attest to this. DPAC
and other patient organizations recently conducted a survey to
learn how people with diabetes were using Patient Assistance
Programs. We discovered that patients only had a 50 percent
chance of being helped by these assistance programs, and
approximately 44 percent of those who did receive help reported
a delay in receiving medications.
With insulin, you cannot afford a delay. I have to note
that 2.3 million Medicare Part D beneficiaries are often
ineligible for help for these Patient Assistance Programs and
copay cards. They have nowhere to turn. When these stop-gap
measures fail, my community goes to desperate measures and
desperate extremes to stay alive: online fundraisers, grey
market sales, or trades, and even shopping abroad. All of these
avenues are a last-ditch response to our current broken insulin
system and all of them come with risks and none of them are
permanent solutions. Our community is crying out for relief and
the solution, we believe, involves dismantling the current
system that promotes high prices in favor of discounts or true
list pricing at the point of purchase where patients and not
PBMs or any other portion of the supply chain profit.
DPAC supports the rebate proposal for Medicare Part D
because of the two safe harbor protections that will transform
the current system. One is to remove the rebates and instead
create discounts at the point of sale directly to the patient,
and the second is the creation of a fixed fee arrangement for
PBMs rather than a percentage of the list price of the drug. We
call on Congress to expand HHS's proposed rule to all insurance
plans offered to Americans. This would help to destroy the
perverse system of increasing list prices in order to increase
the rebate amount given to PBMs.
If enacted in conjunction with an expansion of Patient
Assistance Programs to help uninsured patients, all patients
will benefit, and we need solutions now. For medical
professionals who feel helpless when their patients suffer, for
family members who worry about us, and for patients like me who
need insulin to live, every single person who takes insulin
must be given the opportunity to raise their voice to help
solve this issue.
And thank you for bringing DPAC to bring this patient's
voice into this life or death conversation. I appreciate your
time.
[The prepared statement of Ms. Aprigliano follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thank you so much.
The Chair now recognizes Dr. Kowalski for 5 minutes.
STATEMENT OF AARON J. KOWALSKI
Mr. Kowalski. Thank you. Chairwoman DeGette, Ranking Member
Guthrie, thank you and members of the subcommittee for inviting
me to speak today. What you're seeing is a united community
here. We need to fix this problem. In 1977, my younger brother
Stephen was diagnosed with type 1 diabetes, or T1D, at the
little age of 3, and then it was a bolt out of the blue for our
family. Then in 1984, I too was diagnosed with T1D. My career
has been focused on the fight to cure this terrible disease and
importantly help people stay healthy until that day.
As Chief Mission Officer at JDRF, the leading organization
funding type 1 diabetes research, I'm very grateful for the
opportunity to share our perspective and experiences of the
many who are grappling day-to-day with--and you've heard this
term many times--skyrocketing insulin costs. Type 1 diabetes is
a fatal disease without insulin. Millions of Americans must
take insulin many times a day, every day, just to survive. Yet
as you know, the cost of insulin has soared. You've heard of
Dr. Lipska of the price. It's doubling, it's tripling,
depending on the years--2012, 2016--it's out of control. Beyond
the data are the lives of real people, your constituents.
As I travel the country the number one question I get
asked, how can we make insulin more affordable? Even my own
family's been affected. My brother has benefited tremendously
from advances in modern insulins. They've significantly reduced
life-threatening and costly, severe hypoglycemic episodes. But
even as an owner of a small business in New Jersey, Steve was
spending over $8,000 out-of-pocket for his insulin. His wife
switched jobs just to obtain better insurance that would cover
this cost.
When people with diabetes can't afford insulin, they resort
to drastic and life-threatening measures to stay alive. Again,
you heard Dr. Lipska talk about the number, 25 percent, of
people taking less insulin than they need just to save on cost.
At a time when new innovations can enable people with type 1
diabetes to live longer and healthier lives than ever before,
the dramatic rise in the cost of insulin is undercutting this
progress.
To get the best outcomes people with diabetes need access
to affordable insulin and diabetes management tools year
around. Without them people are not able to manage their blood
sugar, threatening their health, driving up costs including
doctors' visits, hospitalizations, and ultimately terrible
complications such as diabetic eye and kidney disease. At
times, tragically, the results can be fatal.
No one should suffer or die because they can't afford
insulin. No one should suffer or die because they can't afford
insulin.
The time for action is now. We need systemic change, change
that you all can make happen. On behalf of JDRF, I want to
thank Congress for your commitment to solving this problem.
Through our Coverage2Control campaign we've been rallying our
community to call on companies to lower the price of insulin,
and for health plans, employers, and the Government to take
steps to lower out-of-pocket costs.
First, manufacturers need to lower the list price of
insulin. To do this, rebates must be eliminated from the drug
reimbursement system. We support the administration's proposed
anti-rebate rule and urge Congress to end rebates in the
commercial sector as well.
Second, insurers and employers must provide affordable
coverage that reflects insulin's role as a lifesaving and
sustaining drug. We support the policies that remove insulin
from the deductible and provide it with a flat dollar
copayment. At the same time, the public and private sector need
to do more to help those who are uninsured obtain insulin they
need to stay alive and to thrive.
Third, we need to continue to invest in research. At JDRF
we believe affordability and innovation go hand-in-hand to
improve outcomes. Thanks to Congress's strong bipartisan
commitment to the Special Diabetes Program and private
investment from groups like JDRF, we are making progress on
even better insulins, ones that are maybe glucose-responsive or
faster-acting. On artificial pancreas systems, beta cell
therapies and immunotherapies that will ultimately cure this
disease.
While we work towards a brighter tomorrow, we need to
ensure that today all who need insulin to stay alive can obtain
it. Thank you, members, for your outstanding leadership on this
issue. I ask you to continue the fight alongside us.
[The prepared statement of Mr. Kowalski follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. Thank you so much, Doctor. And thank you to
the entire panel for, really, what was compelling testimony and
very informative for the committee.
It is now time for Members to have the opportunity to ask
questions and the Chair recognizes herself for 5 minutes. We
have heard unconscionable stories this morning about patients
being forced to make sacrifices in their daily lives because
they can't pay for insulin or even going without this
lifesaving drug.
Ms. deVore, I want to start with you. You are a patient
advocate, but you also live with type 1 diabetes, yourself, and
so you are familiar with these types of tough choices due to
insulin prices. I want to ask you, given your advocacy roles
would you agree that there are still far too many diabetic
patients or parents of diabetic children who are unable to
access affordable insulin and then they are making these
difficult choices?
Ms. deVore. Am I on now?
Ms. DeGette. Yes.
Ms. deVore. Every day I get emails from people asking how
do I afford insulin? Every day. And every day I have to help
them find a way to find insulin. These are families. These are
adults. They're from every economic sector of our society. No
one's exempt. Diabetes does not discriminate, and the price
certainly doesn't. The price isn't dependent on your income.
Ms. DeGette. That is right.
Ms. deVore. It's always the expensive price that each of us
has to pay if our insurance, or we do not have insurance, if it
doesn't cover it.
Ms. DeGette. So, Dr. Lipska, we heard from the drug
companies that the current--what they say is the current
pricing system generally works for most people living with
diabetes, but your study found 1 in 4 of your patients rationed
their insulin at some point in the last year. So, I would like
you to comment about this and tell us what you think about the
drug companies' argument that it is working for most people.
Dr. Lipska. Thank you for that question. It is clear that
the system is broken. It is clear that this is not working for
many people. So we've heard stories, some of them highly
publicized, people have died because they were rationing
insulin. But we know now with this research that we've done at
the Yale Diabetes Center, but also the survey done by the
American Diabetes Association and other surveys conducted by
advocacy groups that this is widespread.
Ms. DeGette. It is not just a few people, it is like 1 in 4
people, right?
Dr. Lipska. It is not just--it is 1 in 4.
Ms. DeGette. Right.
Dr. Lipska. A quarter of people. This is a huge proportion.
Ms. DeGette. Thank you.
Dr. Cefalu, similar question, you testified that the ADA
insulin affordability survey found in the last year over a
quarter of those who responded had to make changes to their
purchase of insulin due to cost. Based on these findings, what
do you think the size of the population that the system is
failing? How many people do you think this is?
Dr. Cefalu. Well, Chair DeGette, I'm not sure of the
absolute numbers, but it's interesting that our survey at the
American Diabetes Association actually agreed with the report
from Dr. Lipska that 1 out of 4 reported that the cost of
insulin either affected their--the cost either affected their
purchase or use of insulin. What's disturbing is that of 1 out
4 either skipped doses, rationed doses, or more importantly
they had a discussion with their physician and went to an
insulin that may not have worked as well.
So this is more than an inconvenience for the patient. And
the concern is that if you make it more difficult for the
patient to get the care they need, they're not going to be
adherent to medication strategy. And if you're not adherent to
medication strategy, that's going to relate to worse outcomes
over time.
Ms. DeGette. Right. People could get the side effects that
we are so--that Ms. deVore said if you take--if you go by your
regimen with the correct insulins then you don't get the side
effects now, but if you are rationing, if you are not under
control then you do.
Dr. Cefalu. Well, we actually found that if people actually
had to make a choice with their insulin and because of the cost
of insulin they either skip dose or rationed it, the outcomes
are worse.
Ms. DeGette. Right.
Dr. Cefalu. And, actually, in the survey if you'll allow
me----
Ms. DeGette. You know, we don't have a lot of time.
Dr. Cefalu. No, it's just that there were more emergency
room visits, there are more hypoglycemia. There was worse
control because of the costs in these patients, so it's clear
that this is a problem to our patients and cost is indeed
affecting outcome.
Ms. DeGette. Right, thank you.
Dr. Lipska, very briefly I wanted to ask you, so the
manufacturers and the pharmaceutical companies say that if we
lower price it is going to stifle innovation. Do you believe
that is true?
Dr. Lipska. So I'll just go back to this vial of insulin.
This is the same stuff, right. This is the same insulin that's
been around since 1996. Nothing has changed except the price. I
think drug makers can charge what they do because we continue
to pay, and this has to stop. I think that you, as Congress,
have an opportunity and we have an obligation to fix this.
Ms. DeGette. Thank you.
So I would just ask, as I mentioned in my opening statement
Congressman Reed and I, as chairs of the Diabetes Caucus, did
our own investigation last year and we issued a report in
November of last year called ``Insulin: A lifesaving drug too
often out of reach.'' I would like to ask unanimous consent to
put this in the record, so ordered.
[The information appears at the conclusion of the hearing.]
Ms. DeGette. And I also am going to give a copy of this to
every member on the panel, because we researched. We talked to
all of your organizations and we researched this over a year
and we made policy recommendations in this report. I think it
would be really useful for the members of this committee to
read this report and to listen to your testimony before we come
back next week for our hearing with some of the actors in the
market.
And with that, thank you very much for your comity to the
ranking member and I am now pleased to recognize Mr. Guthrie
for 5 minutes.
Mr. Guthrie. Thank you very much.
And it is important to note there is a lot of innovation
going on in the artificial pancreas, the trying to regenerate
pancreatic function within diabetes, so that is stuff we don't
want to stifle. Dr. Lipska hit it perfectly. We are looking at
specifically at insulin, not all the other innovations going on
because of little change, but little change in product, but big
change in price. On the Republican side, we sent letters to
both drug manufacturers and to the PBMs and we got a lot of
different explanations on why the list price was going up while
the net price stayed low. We posed similar questions to both
sides and got a lot of different answers.
So I want to go to Dr. Cefalu. The Working Group convened
by the American Diabetes Association held discussions with more
than 20 stakeholders representing entities throughout the
insulin supply chain. After having these conversations, the
Working Group concluded that current pricing and rebate system
encourages high list prices.
Can you please elaborate on how we got to a pricing and
rebate system that encourages high list prices and, in your
opinion, why did the pricing and rebate system evolve this way?
Dr. Cefalu. Well, again, thank you. The question as far as
the Working Group, we recognize that first and foremost the
increase in transparency is the first step toward viable long-
term solutions. The current rebate system as arranged in the
list price, as the list price increases that our current drug
price and rebate system encourages a high list price. So as the
list price is increasing, intermediaries within the supply
chain benefit.
The way this system is currently based fees, rebates, and
discounts may be based on a percentage of that particular list
price, so there are incentives throughout the supply chain that
keep that list price high.
Mr. Guthrie. OK. One thing we have heard from stakeholders
is that the manufacturers set the list prices and they should
just lower their list price. Manufacturers, however, we learn
there is always, this is very difficult in trying to find how
it works. Manufacturers have told us that it is not as simple
as that. They say if they lowered their list price, a PBM would
be less likely to give them good formulary placement and
therefore give patients more affordable access to their drugs
because they couldn't offer as big of a rebate on the product.
What do you think would happen if a manufacturer just
lowered the list price given how the current price system and
rebate system works? I don't know if you want to say they just
lower it and change the system, but under the current system
can they just lower their price?
Dr. Cefalu. Well, based on what we found in the Working
Group, there are issues at every level of the supply chain and
it's a complex chain and there's no question that the
manufacturers set the list price. But there's also no guarantee
if that list price drops that there's going to be subsequent
changes throughout the supply chain. We need to move away from
a system that's based less on high list prices and rebates and
make sure that discounts and rebates negotiated throughout the
supply chain make it to the patient at the pharmacy counter.
That's what's not happening now.
So to your question, Congressman, simply lowering the list
price unless you can control what happens downstream in the
intermediaries and what happens to the patient, there's no
guarantee that just dropping the list price, in my opinion, and
from the Working Group is going to get the job done. We need
systematic change to make sure these discounts and rebates flow
to the patient at the point of sale.
Mr. Guthrie. Thank you.
Ms. Marchand Aprigliano, in your testimony you highlight
how we need systematic changes. The current complex pricing and
rebate system, similar question, is harming many patients
through the increased out-of-pocket costs. Given all the work
you have done examining the insulin supply chain, what do you
think would happen if a manufacturer just lowered their list
price given how the current pricing and rebate system works?
Ms. Marchand Aprigliano. So the current contracts that are
currently in place with the pharmacy benefit managers and the
manufacturers are secret. We have no idea how much we're
actually receiving in terms of that rebate, and we've been told
that the rebates are then spread throughout those who have
insurance and are used to lower premiums or to help in the
possible cost sharing.
I don't know about anybody sitting here at the table, but
my premium has never gone down. The cost of insulin keeps going
up and I'm paying more and more in cost sharing. I'm not quite
sure if magically the list price would suddenly drop down, I
don't believe that it would immediately. I believe that entire
disruption of the rebating system needs to happen, and it needs
to happen now.
I do want to bring up one of the things that we talk about
when we talk about rationing in 1 in 4. Part of that is, is
it's a psychological torture that we all go through every month
because we don't know if something is going to happen, and we
are going to lose access to our insurance, or we are going to
have to pay list price at that counter. And so every year when
we see list prices rise and we wonder where exactly all that
money is going to, we have no idea if it's going to rebates, or
to help lower the cost of an entire system in an insurance plan
to help everybody else.
Are we subsidizing people who are healthy with the cost of
insulin? And I think that that's the case right now.
Mr. Guthrie. Thank you for your testimony and I am out of
time so I will yield back.
Ms. DeGette. The Chair now recognizes the chairman of the
full committee, Mr. Pallone, for 5 minutes for questioning.
Mr. Pallone. Thank you, Madam Chair. We have heard today
that the amount people ultimately pay for insulin can be
significantly influenced by the manufacturers' list price even
if they have insurance, and that price forces people to make
incredibly difficult decisions between the medicine that
literally keeps them alive and all other aspects of their
lives. So I will try to get a bunch of questions in here as
quickly as possible.
Dr. Cefalu--I don't know if I am pronouncing it right. Your
testimony stated and I quote, ``when people cannot afford the
insulin they need, they may skip doses or take less than they
need.'' This puts them at risk for devastating and sometimes
deadly complications. So, Doctor, what do you know about the
people who are burdened the most by rising list prices and
therefore most at risk for these complications that you
mention?
Dr. Cefalu. So the question is what is the most vulnerable
population?
Mr. Pallone. Well, I mean what--tell us, you know, a little
more about, you know, the person who is impacted by this and,
you know.
Dr. Cefalu. Sure, OK. So you've heard every--panelists have
talked about cases where individuals cannot afford their
insulin. And when you begin to ration insulin, two things
happen. First and foremost, if you control the blood glucose,
if between the provider and the patient that amount of insulin
you give control the glucose and then you ration insulin and
glucoses begin to rise, over the short term, uncontrolled
dehydration. And again, if there's less insulin in a type 1
will lead to the acute complication of diabetic ketoacidosis,
which if not effectively treated does lead to death.
Over the long term, we've had studies for 20 years that
show that adequate glucose control does prevent the blindness,
the kidney disease, and the nerve disease. So the concern is
now if someone takes less insulin to get by throughout the day
and this is chronic uncontrolled glucoses, then over the long
period they're going to give rise to more blindness and kidney
disease and nerve disease. And we've spent 20 years as a
medical community reversing these changes, and now if we can't
afford the insulin to control glucose that will be a long-term
control----
Mr. Pallone. OK. Well, that is very helpful. Thank you.
And, Dr. Kowalski, you are aware of individuals forced to
take these risks, being forced to choose between filling their
prescription and paying for essential household expenses. How
common of a problem is this where people have to make those
choices?
Mr. Kowalski. Yes, I think it's really interesting we're
talking about insulin rationing and a quarter of people are
insulin rationing, but we aren't talking about this other part
where people who aren't rationing are making decisions that is
either paying a mortgage, paying a car payment, college
tuition, debt. And this is very common as we've seen an
increase, a significant increase in people moving from
traditional fixed copays to high-deductible plans. And people
with diabetes who have high-deductible plans are hurt terribly
by these rising costs.
Mr. Pallone. All right, thank you.
Let me ask Dr. Lipska. Thanks for your research into
insulin affordability and bringing to light the effects that
high costs have on your patients' treatment. Just if you could,
what additional research is needed in this regard, if you will?
Dr. Lipska. I've been asking myself that question. Thank
you for this. I think that we already know. We already know
everything we need to know about the impact on patients. We
know it's a widespread problem. We've done research for many
decades now showing that high blood sugars cause complications.
We don't need to reinvent the wheel. I think we know this.
Mr. Pallone. All right.
Dr. Lipska. I think we need to fix the problem which is why
I'm here and not in my research lab.
Mr. Pallone. All right, thank you so much.
Ms. deVore, you said in your testimony you continue to
drive a 17-year-old car and believe that your husband will
never be able to retire due to the cost of managing your
condition. You said that you are one of the relatively lucky
ones who has good insurance to pay for your insulin.
So I wanted to ask Dr. Cefalu, now, the question, what
parts of the system do you believe are responsible for driving
up insulin prices?
Dr. Cefalu. So getting back to our Working Group, this was
again by interviewing all stakeholders in the insulin supply
chain. We don't think that there's one entity in which there's
not accountability. It's clear that the manufacturers set the
list price, but it's also clear that this list price
incentivizes, the system encourages high list price. And a high
list price, the intermediaries in the supply chain benefit from
high list price.
So we feel that at every level of the supply chain, each
entity has to hold some accountability in the pricing of
insulin. And when we talk about solutions, when we talk about
discounts and rebates flowing down, that happens at each level
to get to the patient. So the system is dysfunctional, and we
need to ensure that we have a system that's not based on high
list prices and rebates, and that if there are discounts and
rebates, they are seen at the pharmacy counter to lower the
cost of insulin.
Mr. Pallone. All right, thank you. And thank you to the
panel. I appreciate it.
Thank you, Madam Chair.
Ms. DeGette. Thank you so much, Mr. Pallone.
And the Chair now recognizes Mr. Burgess for 5 minutes for
purposes of questioning.
Mr. Burgess. Thank you and thanks to our panel for being
here to a very informative discussion, a very thought-provoking
discussion. Just to be clear, because this committee has done a
lot of work on drug shortages over the years, at the present
time there is no concern about any shortage of insulin; is that
correct?
All witnesses said yes, no?
No concern, OK. I asked the question poorly. I asked for an
affirmative to a negative, or a negative to an affirmative.
But as you all discussed, this, I mean this committee has
done a lot of work on the opiate problem, but I mean insulin is
something you don't have to worry about it being diverted. You
don't really have to worry about someone overusing it because
there is actually a biologic penalty for overusing it; is that
not correct?
So I have had some questions about the rebate rule that the
administration has proposed, but I promised Secretary Azar I
would keep an open mind about that and I have. And several of
you have brought up about the rebate rule this morning and I
hope that perhaps at some point in the future we can involve
the Agency either in this committee or the Health Subcommittee
on their--to have them discuss the pros and cons of the rebate
rule because rebates seem to be a recurring theme.
Now one of the things that strikes me when I look at the
timeline for insulin increases, and I think, Dr. Cefalu, you
have mentioned since 2002 there has been an increase and really
it is dramatic after 2009-2010, and that is of course the point
at which the Medicaid rebate was increased from 15 to 23
percent, but then a cap was placed on the rebate. And I don't
know if that has had an effect, but you wonder because just
again you superimpose the timeline of when that Medicaid rebate
increase went into effect, which was in March of 2010.
So I am also struck--and I would never aspire to be a
third-party payer, I have never wished that on anyone,
actually. However, if I were a third-party payer or perhaps
since we have Medicare and Medicaid under our jurisdiction
perhaps something to be considered, why do we even charge for
insulin? I mean if someone has got a diagnosis of diabetes, why
not just treat it? So has there been any effort within, say,
within Medicare?
And, Dr. Lipska, I think you mentioned the two patient
studies that you outlined both of whom were in their 70s, which
is young I would hasten to add, but still in an age that is
covered by Medicare, why would the Center for Medicare and
Medicaid Services not just cover that?
Dr. Lipska. I'll try to answer that question. Life with
diabetes is very hard to begin with. I think charging people,
you know, exorbitant prices for insulin is backwards and
unhelpful. And I think as was mentioned before, I think in the
end it's going to cost us more, right?
Mr. Burgess. I don't disagree. The whole premise of copays
several years ago, when someone is sick don't you want them to
take their medicine? Why would you put a barrier there?
Dr. Lipska. It makes it harder for me to treat them. It
makes it much harder for me as a clinician to help them.
Mr. Burgess. So have any of you as you interact with
policymakers, have any of you had discussions along this line
with the Center for Medicare and Medicaid Services?
Dr. Cefalu. The reduction in rebate, the ADA has been at
the Secretary Azar when he discussed this, and this is line
with our Working Group's recommendation, and our public policy.
To your point as far as reducing the cost of insulin, that's in
line with our recommendations to lower or remove cost sharing
and to make sure any cost sharing is based on the lowest price
that account for the negotiations throughout the supply chain.
And the amount of money a person pays for insulin is going to
have a direct effect on their adherence of that strategy.
Mr. Burgess. Sure. I don't disagree.
Dr. Cefalu. And that is incredibly important. And again, we
cannot go back to where we have more complications because of
the cost of insulin.
Mr. Burgess. And again I don't disagree at all.
Dr. Cefalu. So to your point, lowering the cost of insulin,
either cost sharing or rebates coming back to the point of
sale, whatever we can do to lower the cost of insulin, I think,
is going to increase adherence.
Mr. Burgess. But in a Federal program why don't we just
cover it? Why should there be any cost at all?
Dr. Cefalu. That's a question that I think this committee
and Congress needs to ask.
Mr. Burgess. And my next question to Seema Verma next time
I see her.
Thank you very much. I will yield back.
Ms. DeGette. Thank you, Dr. Burgess.
The Chair now recognizes the vice chairman of the Oversight
and Investigations Subcommittee, Mr. Kennedy, for 5 minutes.
Mr. Kennedy. Thank you, Madam Chair. I want to thank all my
colleagues on the committee for being here for this important
hearing. Thank you to all the witnesses and your testimony. It
is extremely compelling. I would also like to submit for the
record a Boston Globe article that was published last November
16th that detailed the story of two moms that were protesting
outside of a facility in Cambridge, Massachusetts with the
ashes of their children who died because they did not get
access to insulin. And we will pass that out for the committee.
I would like to submit for the record again.
Ms. DeGette. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Kennedy. Thank you.
Drug companies are taking a lot of well-deserved criticism
for the astronomical prices we are seeing and in response we
have heard today about the free and reduced insulin, cost of
insulin through Patient Assistance Programs or drug discount
cards to provide some relief. These programs sound promising,
but I am not sure it is quite that simple.
Ms. Marchand Aprigliano--did I come close?
Ms. Marchand Aprigliano. Close enough.
Mr. Kennedy. I am sorry. One more time for me?
Ms. Marchand Aprigliano. Marchand Aprigliano.
Mr. Kennedy. Marchand Aprigliano.
Ms. Marchand Aprigliano. The G is silent.
Mr. Kennedy. Thank you. I will do my best.
Ms. Marchand Aprigliano. No offend.
Mr. Kennedy. There you go, thank you.
You testified about our recent survey on Patient Assistance
Programs and noted that only about half of people who apply
actually receive them. So, generally speaking, what can you
tell me about the populations that use these programs to help
pay for medication?
Ms. Marchand Aprigliano. So I will tell you that they come
from all walks of life just like everybody who uses insulin.
Now that being said, part of the issue is that sometimes we
don't meet the qualifications. The current qualifications can
range from 250 percent to 400 percent of Federal poverty level.
So for a family of four that may be depending upon the type of
insulin you take, you may be eligible for one program and not
eligible for another one.
One of the important things to note is that we said that 42
percent of the patients found that the qualifications to apply
were difficult to find and understand. And out of that the 44
percent don't receive their medications in a timely manner.
Mr. Kennedy. So that is what I wanted to build on, Dr.
Kowalski. So if you are in need of insulin in a timely manner
how do these programs, how do they work?
Mr. Kowalski. Well, I think they're a barrier. I mean JDRF,
we certainly are trying to do our best to disseminate that
there are options out there for people. But as anybody who's
sat on a phone, sat in front of the pharmacy, waited and
struggled to figure these programs out, when you have a drug
that your blood sugar is going up as you're sitting there, I
mean these are barriers that we feel should not be in place. I
mean relying upon Band-Aids when there's an overarching problem
is something that JDRF, and I think we're all aligned at this
table, needed to address.
Mr. Kennedy. So when drug manufacturers come in next week
to testify, I expect that they are going to tell us about the
benefits that these programs are having.
But, Dr. Lipska, you say in your testimony and I quote,
``the Patient Assistance Programs do little more than provide a
public relations benefit. It is hard to find a patient that
meets the criteria.'' Doctor, from your experience, why are
these programs failing to actually provide sufficient benefit
to those looking for help and are there certain things drug
companies should be doing that they are not?
Dr. Lipska. Right, great question. A lot of patients don't
meet the criteria for, you know, because of income, or they
have commercial coverage, or there are some other specific
criteria that, you know, don't quite help them in those
situations. That's one thing, so it is hard to find somebody
who exactly qualifies.
But I also say that I don't think Patient Assistance
Programs are a way to fix this. As was said, one, they cause
delay, but two, they just, they require money--money. They
require a time spent sort of, you know, applying and running
through these hoops. People should not have to do this, it is
just not right. Life with diabetes is hard enough as it is. I
don't think we should be putting patients through this
application process to get a drug they need.
Mr. Kennedy. And, Ms. Marchand Aprigliano, hopefully
better, do you, building off of that do you have suggestions
for how they can, the programs can be improved, or do you think
they should be essentially scrapped?
Ms. Marchand Aprigliano. Well, I think that they could
definitely be improved by reducing the list price of insulin so
that these Patient Assistance Programs don't need to exist at
all. However, that being said, to be able to raise the
eligibility requirements to 500 percent of FPL, we've discussed
that in the paper that we published today, to make it easy for
individuals to actually apply and then to educate individuals
such as pharmacists as well as other healthcare professionals
about these programs.
Only seven percent of individuals found out about these
programs at the pharmacy counter, which is usually the first
time that somebody who is obtaining the first notion that, oh
my gosh, I can't pay for my prescription actually happens. That
should be the first line of defense there.
And also, and I will say this, there needs to be help
especially for those who are in crisis. I actually applied for
a Patient Assistance Program when my husband unexpectedly was
laid off from his job and I knew the system, I knew exactly
what was supposed to be able to help me, and instead I was told
that I didn't qualify because the paperwork that I had to show
only showed past income and that's all they would base their
decision off of, not from the fact that we had zero income.
And I wasn't concerned about my husband, helping to find
him find a new job, or concerned about how to put food on our
table. I was concerned about how I was going to get insulin.
And then to find out it would take 4 to 6 weeks before they
made a decision about my application, that is unconscionable,
unacceptable, and for Patient Assistance Programs we need to do
better.
Mr. Kennedy. Thank you, yield back.
Ms. DeGette. Thank you.
The Chair now recognizes Mr. Griffith for the purposes of
questioning the witnesses.
Mr. Griffith. Madam Chair, thank you so much for holding
this hearing.
You know, I really always learn things from these hearings
and particularly today I have learned. And I just have to say
that I hadn't thought about it, but Dr. Burgess's point is very
appropriate and that is, is that with the high cost of the
consequences of not providing the insulin or not being able to
get the insulin, amputations are expensive, the physical
therapy that follows an amputation is expensive. Loss of vision
or even a diminution in your ability to see is expensive and
all of the third-party payers are going to pay a lot more. It
is fascinating.
Anyway, I have concerns about PBMs, pharmacy benefit
managers, and the consolidation in that industry with three
major PBMs controlling most of the market. Dr. Cefalu, in your
testimony you discuss PBMs and how they have substantial market
power and how the PBM's primary customers are health plans and
employers and not patients. How has the substantial market
power of PBMs changed, if at all, the list price and the net
prices of insulin? And I know we have already touched on some
of this, but let's get it on the record.
Dr. Cefalu. Well, the PBMs play a role in the insulin
supply chain through their negotiations through manufacturers
for the rebates, but their primary customers are the health
plan and the insurers where they negotiate to lower total drug
costs and they design formularies. What is not clear is whether
those negotiations that take place, and I think some of the
comments today were that they are opaque transactions, we don't
know whether those transactions are actually benefiting the
patient at the point of sale. There's information that we would
need before we say how you would improve that system and that
gets back to the transparency.
Mr. Griffith. And so, you know, when we have questions, Ms.
Marchand Aprigliano said earlier she had speculations as to
where the money was going and so forth. We just don't know when
we are dealing with the manufacturers, and the PBMs, and the
insurance companies, it is really hard to follow the bouncing
ball, and we had a hearing on that last year that dealt with
how do we figure that all out. So I assume that everybody would
be in favor of transparency so we can see what is going on and
whether or not the rebates that are being offered to the PBMs
are actually increased by a request by the PBMs to the
manufacturers to increase their list price; is that correct?
Dr. Cefalu. One of the key things identified was the
Working Group that increased transparency is key to
understanding and designing long-term solutions. It's key. We
do not understand the negotiations that occur with each entity
in the supply chain and until we do we won't have the long-term
solutions. And that was a key determination, a key finding from
the Working Group. We just do not understand the flow of money
through the supply chain.
Mr. Griffith. So at this point you don't know whether the
PBM's use of their market power has benefited or hurt patients,
because you don't know what they are doing because it is all
behind closed doors, so to speak?
Dr. Cefalu. The Working Group observation is that it was
not clear that these negotiations actually benefit the patient
at the point of sale.
Mr. Griffith. Ms. Marchand Aprigliano, in your opinion, why
do you think the PBMs have so much power in the insulin supply
chain?
Ms. Marchand Aprigliano. Well, I think that PBMs have power
over the entire prescription drug supply chain. And PBMs
started with the best of intentions just like much of anything
else. This was supposed to help patients save on the cost of
their prescription drugs. But over the course of several years
this has changed to how much profit a PBM can make. And through
the rebating system and a way to not share with the patient at
the point of sale, we are subsidizing, those of with chronic
illnesses are subsidizing the entire healthcare system.
Mr. Griffith. Including the net profits of the insurance
companies, the PBMs, and the manufacturers?
Ms. Marchand Aprigliano. Everyone in the insulin supply
chain. We realize that nobody's out to get us----
Mr. Griffith. Right.
Ms. Marchand Aprigliano [continuing]. And that no one,
wants to kill us, but there's no profit if no one can purchase
a vial of insulin and broke patients can't buy insulin. So
somebody is making a profit and it's not the patients.
Mr. Griffith. Yes, ma'am.
Madam Chair, I appreciate you continuing our work into this
and we will do this over the next year, I know, and I look
forward to participating in that and thank you very much and
yield back.
Ms. DeGette. Thank you so much. We are going to do it over
the next week but, however, it is not going to take us a year
to legislate.
Mr. Griffith. Well, that is good news.
Ms. DeGette. OK, yes.
Mr. Griffith. Thank you, Madam Chair.
Ms. DeGette. The Chair is now pleased to recognize Ms.
Kuster for 5 minutes.
Ms. Kuster. Thank you, Madam Chair. And thank you for
coming together and for the bipartisan approach here today.
So I just want to emphasize the scope, you all have been
very helpful. In New Hampshire, where I am from, approximately
ten percent of the population, 1 in 10, is type 1 or type 2
diabetes, approximately 121,000. And physicians estimate that
34,000 people in my State have diabetes but do not yet know it.
So it is a serious, serious health threat as you have laid out.
Thirty-six percent of our population, 370,000 Granite
Staters have pre-diabetic symptoms including high blood glucose
levels. And just to give you a sense of the scope and we are a
small State, the diagnosed diabetes costs in New Hampshire are
an estimated $1.3 billion every single year including the
direct medical expenses, 940 million, and then an additional
320 million spent on indirect costs including loss of
productivity, so 2017 figures.
I want to try to get at the root causes of the rising
insulin prices that we are here to discuss. Just to give an
example, so the list price of Novolog, commonly used analog
insulin, increased by 353 percent per vial and that was just
from 2001 to 2016. During the same period, the list price of
Humalog, another commonly used insulin, increased by 585
percent per vial. So it is little wonder that people can't keep
up, as you have discussed.
I want to ask Dr. Lipska, you testified the cost of insulin
today is now seven times more for the exact same product as two
decades ago, and to quote you, ``recent research suggests that
high prices primarily benefit the drug makers'' Do you believe
that the drug companies are the ones benefiting the most from
the exorbitant price increases?
Dr. Lipska. Thank you for that question. Yes, I do. And
this is based on research not performed by my group, by Dr.
Peter Bach at the Sloan Kettering Memorial Hospital. They
looked at U.S. expenditures on prescription drugs in 2016 and
estimated that those expenditures totaled 400 and billion
dollars. Two-third----
Ms. Kuster. Four hundred billion, billion with a B?
Dr. Lipska. Four hundred and eighty billion dollars. Two-
thirds of this total was captured by drug manufacturers in the
form of net revenues. The remaining third was retained as gross
profits in the supply chain. PBMs and wholesalers captured
approximately 8.5 percent of that. So I think that helps keep
this in perspective in terms of where the money is going. Now
this is not insulin-specific data, these are prescription
drugs-specific data. But I think it gives us a little bit of a
perspective and a pause to pawn all of this just on PBMs and
the inflating list price.
Ms. Kuster. Thank you. That is very helpful.
Dr. Cefalu, you discuss in your testimony the American
Diabetes Association took a thorough look at the causes of
rising insulin prices. And in summarizing the Working Group
conclusion you stated, quote, ``as prices increase the profits
of the intermediaries in the insulin supply chain--wholesalers,
PBM, pharmacies--increase since they may each receive a rebate
discount or fee calculated as a percentage of that list fee''
So it sounds like everyone in the supply chain except the
person living with diabetes benefits from high list prices.
What parts of the system do you believe are responsible for
driving up insulin prices?
Dr. Cefalu. So, Congresswoman, again the Working Group
looked at and talked to every stakeholder in the supply chain.
It's clear that the price is set by the manufacturers, but as
you stated a high list price benefits intermediaries. To Dr.
Lipska's point, there are other studies that have looked at the
flow of money through the supply chain. I can actually provide
you information from the Schaeffer study from the University of
Southern California that looked at the profit taken at each
level.
But again, as the list price goes up, the intermediaries'
profit because of the percentage based on the list price. And
this is where if we understood the negotiations, understood
what is occurring between the manufacturer and PBM, the PBM and
the health plan, the PBM and the pharmacy, understanding what
is going on as far as negotiations, will we have a better idea
as to your point as where the profits are taken. For now, it's
based on data in the public domain and we'd be more than happy
to give you information from the U.S.C. study which shed some
light on where the profits are taken.
Ms. Kuster. That would be very helpful, and we can get that
into the record.
Dr. Powers, similar question, you stated in your testimony,
quote, ``it is difficult to understand how a drug that has
remained unchanged for almost two decades continues to
skyrocket in price'' We all share your frustration with that.
What do you believe are the fundamental causes of skyrocketing
prices for these well-established drugs?
Dr. Powers. Yes, thank you for that question. I think that
if this committee had members of each of the supply chain on a
panel and you asked them who was the fault, they would do this.
Ms. Kuster. Well, we will get that opportunity next week.
Dr. Powers. Absolutely, right. They will do that, right.
And so I think that we have--that each member of the supply
chain has a responsibility to help solve this problem. That
means the manufacturers, the PBM, the plans, the patients, the
providers, and Congress all have a role in creating a new
system for this. And I think that trying to single out one
person or one entity, while satisfying, is not going to solve
the global problem.
Ms. Kuster. I apologize for going over and I yield back.
Ms. DeGette. The Chair now recognizes Congresswoman Brooks
from Indiana for 5 minutes.
Mrs. Brooks. Thank you, Madam Chair, and thank you for
holding this very important hearing. I am vice chair, one of
the vice chairs of the Diabetes Caucus. I want to thank the
chairman of this subcommittee for her leadership, and
Congressman Reed.
We know that CDC has issued a report, and part of the
reason I am so involved is that over 586,000 adult Hoosiers
suffer from diabetes and so it is a tremendous problem in our
State. I think our State is one of the higher per capita, and
so critically important problem.
I want to talk about a couple of things that I haven't
really heard us talk about yet. I am going to start with you,
Dr. Kowalski. I want to talk about the concept of non-medical
switching and can you describe what that means and whether or
not insulins are interchangeable? Can you just talk with me a
little bit about non-medical switching?
Mr. Kowalski. Yes, this is another issue that I think is
very important here that we have multiple--it was mentioned on
the committee, the panel here, that there are multiple forms of
insulin and different people with diabetes benefit with
different forms with different characteristics. For example, I
use an insulin pump, so I only use fast-acting insulin. Some
people do shots and use fast and long-acting.
What we're seeing in the community is people being switched
by their insurance companies, not by the choice of their
physician and the patient, which is just not the right way to
practice medicine.
Mrs. Brooks. Has that ever happened to you?
Mr. Kowalski. Oh, absolutely. And we work at JDRF--has a,
I'm very happy to say, good coverage for diabetes of course.
Mrs. Brooks. I would hope so.
Mr. Kowalski. And we've been switched, and this is very
frustrating because then you take a step back. For some people
that's OK, but insurance companies shouldn't be making those
decisions. The physician and the person with diabetes should
be.
Mrs. Brooks. And did anything happen, so you were forced to
switch insulins and were you required then to pay more or less
for the insulin that you were instructed to switch to?
Mr. Kowalski. Fortunately I did not, but I can tell you
just anecdotally a good friend, who again works in the diabetes
business, his daughter and his foundation switched insulins and
she had three incidents of severe hyper, high blood sugar
glycemia. It took him 8 hours, and he is a professional who
works in this field, on the phone plus the time of the
physicians, so the physician calling a physician at the
insurance company, to make a decision that his physician had
ordered. So I mean this is a broken part of the system that
JDRF is also committed to fixing.
Mrs. Brooks. Does anyone know, is there any data being kept
about this switching issue and whether or not people are
keeping track of these incidents or any organizations, just out
of curiosity, keeping track of when the switches are being
required to take place? Dr. Cefalu?
Dr. Cefalu. That is data--first of all, I agree with Dr.
Kowalski. This is an issue in our survey that again 25 percent
had problems with the cost of insulin and the use of insulin
and one of those uses was being switched to another brand of
insulin. And someone may be able to afford their insulin but
then go to the pharmacy and find out that insulin is no longer
available. So that is more, again it's more than an
inconvenience. We need data, we need research, and really what
the medical cost of the non-medical switching because once
again making it more difficult for a patient who has controlled
blood sugars is only going to result in poor outcomes over
time.
Mrs. Brooks. Thank you.
Ms. Marchand----
Ms. Marchand Aprigliano. Aprigliano.
Mrs. Brooks [continuing]. Aprigliano, can you please share
with us information that you are familiar with when doctors of
patients must go through what is called ``fail first'' or step
therapy and what the process what that means and what the
implications of that might be and that where a health insurance
requires a patient to try other insulins first and prove they
fail, which can you please explain how that works?
Ms. Marchand Aprigliano. So as insulins have become
different we have insurers deciding that they want to pay for
one type of drug, one type of insulin over another. I have a
very good friend who works in the diabetes space, also is type
1, and he has been on a long-acting insulin for the last two
years. He's great, no problem, A1Cs are terrific.
Insurance decided that they wanted him on a different drug
and in order for him--he could not even go through the prior
authorization to get an override. He had to try one drug for 3
months. And then if he failed on that drug----
Mrs. Brooks. What does failure mean?
Ms. Marchand Aprigliano. Failure means a severe low----
Mrs. Brooks. And I have 13 seconds.
Ms. Marchand Aprigliano [continuing]. Sorry--severe low or
severe high. He failed, but yet had to go through another 3-
month period of failure again. Meanwhile, he's having severe
lows while he travels. I worry about him. I know his family
worries about him. And this is through his insurance, it wasn't
a choice. His medical provider has been fighting for him to
change that.
Mrs. Brooks. And so it would be up to the patient to get
the insurance to change that coverage, or his physician.
Ms. Marchand Aprigliano. The insurance has denied twice
because they believe that insulins are interchangeable, which
they aren't.
Mrs. Brooks. OK.
Ms. DeGette. And thank you.
Mrs. Brooks. I yield back.
Ms. DeGette. We have heard situations of patients who said
you have to have a severe incident, so they actually tried to
manufacture their own severe incident so they could get the
insulin they need, which is crazy.
Dr. Ruiz is now recognized for 5 minutes.
Mr. Ruiz.Congressman Brooks, I have a bipartisan bill with
Dr. Wenstrup that is the solution to this step therapy issue;
that gives it more of a patient and doctor voice in that
decision-making process. So I look forward to sharing that with
you and working with you on that.
I would like to thank the Chair DeGette for holding this
important hearing and for her tireless work as chair of the
Diabetes Caucus where I am honored to serve as a vice chair to
work on policies that address issues like the affordability and
access to diabetes medications and care.
I saw patients in the trailer parks in the Coachella Valley
where I grew up. I saw patients in the emergency department
where I practice, and I see patients in the streets, mostly
homeless, in street medicine who over and over have the signs
and symptoms of the devastating health effects of not taking
their insulin or rationing their insulin.
And as the prices of insulin have gone up, many patients
have taken to cutting back on the amount of insulin that they
take or even skipping doses entirely to stretch their insulin
as long as possible. When I was leading a healthcare
initiative, we had a community forum in the town of Mecca in my
district, and afterwards I saw an elderly woman dig through the
trash. And I went over and I was curious. I asked her what she
was doing, and she told me she was collecting aluminum cans
because she can't afford her insulin, and she was trying to
collect cans for the rebates so she can pay for insulin. But
she said, ``But don't worry, Doctor.'' She told me, ``Don't
worry, I only take half a dose so it can last.'' OK. So while
this is a common reaction, rationing insulin carries enormous
medical risks.
I have seen the patients, OK, I have treated the patients
in diabetic ketoacidosis and hyperglycemic comas. I have seen
the patients in pain because of their neuropathy. I have seen
the patients who were rushing to the dialysis center because of
nuance and renal failure and hyperkalemia.
I have seen the patients who come in with cardiac arrest
because of that hyperkalemia and having to resuscitate them and
send them to the ICU. So I have seen the emergencies that not
taking insulin and not managing their glucose effectively can
cause.
Dr. Lipska, you found that 1 in 4 patients who participated
in your study said that they had used less insulin than was
prescribed by their doctor which led to poor control of their
blood sugar. Dr. Lipska, I want you to talk more about your
experiences about the people in your study who underused or
rationed their insulin and why did they do that.
Dr. Lipska. Right. So we've heard a lot of stories and I
appreciate you sharing yours as well. I think that there are
dramatic stories of people who underuse insulin such as
diabetic ketoacidosis admissions, emergency room
hospitalizations, but there are also a lot of stories of people
using less than prescribed for prolonged periods of time and it
takes a long time for some of these diabetic complications to
then arise.
And so we're seeing this problem of rationing now. We're
going to be seeing the complications down the road, some of
these long-term complications that you mentioned, neuropathy,
blindness, and, you know, more dialysis. These patients are
suffering. So my Diabetes Center sees lots of patients with
type 1 and type 2 diabetes. My niche is more people with type 2
diabetes who have had it for a long time, so that's why I
presented my patient Maria to you. These patients have had
diabetes. They've lived with the diabetes, they've lived with
the diabetes for a long time. They have multiple other chronic
conditions. They have other expenses. They have big
expenditures and they're really suffering.
Mr. Ruiz. And so many times the patient feels that if they
don't feel anything then they are not sick, so why do they have
to take insulin. I have done talks about how this is this is
the silent killer, right. You don't feel anything.
I have an uncle who says, ``Ah,'' in Spanish, ``Ah,'' you
know, ``it costs too much money. I would rather like put food
on the table and use my car to go to work and pay the car
bills, et cetera, than paying for insulin. I don't feel sick. I
don't feel sick, so I am not sick.'' So there is a lot of
miscommunications in that.
Dr. Cefalu, in your opinion, what can you inform patients
about the adverse effects of not taking insulin appropriately
given what Dr. Lipska just said?
Dr. Cefalu. Well, number one, if a patient can't afford the
insulin the first thing we suggest is actually talk to their
provider. Again, it may be that patient can take a least
expensive form of insulin that may be appropriate. In the
majority of cases perhaps it's not, but you need to inform the
patient what to expect.
Again, over the short term, a poor control of sugars,
particularly in an elderly person, will lead to some mental
status changes, dehydration, and that could lead to an
emergency room visit in which there is tremendously high blood
glucose, a hyperosmolar state, so this is not specifically just
in type 1. But for type 1, poor control again may lead to
increased urination, dehydration, nausea, vomiting, and again
leading to ketoacidosis.
So educating the patient on what to expect so that if they
are heading down this road that you can mitigate it is
incredibly important, but the main issue, the bottom line is
that insulin is a matter of life and death and nobody who needs
insulin should ever go without it because of prohibitive costs
and that's the issue we're trying to address here. We can put
in mitigating circumstances to talk about patients and what
they can do if they don't have the right insulin, but if they
can't afford it that's the main problem we're here today to try
to address.
Ms. DeGette. Thank you.
Mr. Ruiz. Thank you.
Ms. DeGette. Thank you very much.
The Chair now recognizes Dr. Bucshon for 5 minutes.
Mr. Bucshon. Thank you, Madam Chairwoman. I was a
cardiovascular surgeon before I was in Congress, so I changed
professions a little bit. This is a very important topic. As a
heart surgeon, a lot of my patients had diabetes, pretty
substantial percentage. As you know, cardiovascular disease is
one of the big things that happens.
I am going to ask something related to the 340B program. To
remain eligible for participation in the Medicaid program, drug
manufacturers must provide certain outpatient drugs to cover
entities in the 340B program at significant discounts. And in
certain circumstances, these manufacturers must sell their
products to 340B-covered entities for a penny. Some, but not
all, 340B-covered entities pass these savings on to patients.
For example, during the committee's investigation of the 340B
program during the 115th Congress, one 340B entity told the
committee they offered insulin at $10 a vial to certain
qualifying patients. So $10 costs them a penny.
So, Ms. deVore, as a patient, do you have any experience
with 340B drug pricing?
Ms. deVore. My husband actually works at a healthcare
facility that has a 340B pharmacy and I have the availability
of utilizing that pharmacy. But it doesn't, the cost
difference----
Mr. Bucshon. Doesn't really make any difference?
Ms. deVore. No, it does not make any difference.
Mr. Bucshon. You haven't seen anything. So it hasn't
affected you directly?
Ms. deVore. As far as the price is the same.
Mr. Bucshon. Yes.
Ms. deVore. Whether or not I use a 340B pharmacy or
outside, under our insurance plan.
Mr. Bucshon. OK.
Ms. deVore. Because the way our insurance is structured
that even with Fiasp that's not on the formulary because it's
non-formulary I still pay the full retail price.
Mr. Bucshon. OK. Does anyone else want to comment on 340B?
Anybody have a comments on the 340B program?
Oh, too bad. I thought you were going to have a lot of
comments on that.
And I won't take too much more time, Madam Chairwoman,
because some of the concern that I have about 340B in a larger
context is that because of the companies have to sell some of
their products at such a low discounted price to 340B-covered
entities, that on the backside of that to make up for that it
is putting upward pressure on drug prices otherwise for non-
340B-covered entities.
And so I think that I would encourage the subcommittee to--
this subcommittee to also as part of our investigative look at
pricing on insulin, also consider the ramifications of the
dramatic exponential growth in the 340B program as a whole. And
based on our previous subcommittee hearings in the last
Congress, try to address some of the abuses that are occurring
in 340B that may very well be putting an upward pressure on
drug prices as a whole.
And with that I yield back.
Ms. DeGette. The gentleman yields back.
The Chair now recognizes Ms. Schakowsky for 5 minutes.
Ms. Schakowsky. Thank you. Approximately 1,325,000 or 12.5
percent of the adult population in my home State of Illinois
have diabetes. In 2017, Illinoisans diagnosed with diabetes
were forced to spend $8.7 billion for direct medical expenses.
I am talking about hospital inpatient days, emergency visits,
ambulatory visits, but these costs don't even include the price
of insulin itself.
The three pharmaceutical companies who dominate the global
insulin market have raised their prices in lockstep over the
past several years. When Eli Lilly introduced its Humalog brand
of insulin in 1996, the list price of a 10-millimeter vial was
$21 and it is $275 per vial, and diabetes patients as we heard
can use four a month, sometimes even six a month for some
individuals. And when Sanofi insulin brand debuted in 2001 it
was $35 a vial, now it is 250. And when Nova Nordisk insulin,
Novolog, was introduced in 2001 it was $45, and now it is $289.
And I just want to note that these current prices are
curiously similar how they have raised those prices. And though
there is zero transparency into the business practices of these
companies, I know none of them can logically attribute these
price hikes to increases in manufacturing costs, for example,
which we have heard, and not when insulin has been around since
1921 and improved human analog of insulin has been around since
1996.
So Ms.--I am going to try and get it right--Ms. Marchand
Aprigliano, it seems to me that these pharmaceutical companies
raise the price of insulin because they can. And am I wrong? Is
there a better or more justifiable explanation for this?
Ms. Marchand Aprigliano. I don't work for the insulin
manufacturers, so I can't say that----
Ms. Schakowsky. OK, does anybody there want to give--yes,
go ahead, Dr. Powers.
Dr. Powers. So I would just say that the price of the same
drugs, those same insulins in Canada, Germany, France, England,
very different. I have the story of one patient who paid $300
for her insulin in the country. She lost it when she was in
London, had to purchase a replacement, $30.
Ms. Schakowsky. So this a decision that we don't have any
transparency into how they do that, but I think this example
tells us it doesn't need to be that expensive.
Dr. Cefalu, the American Diabetes Association white paper
details the role of drug companies in this system. How do you
account for an over 1,000 percent in the price of insulin since
the 1990s?
Dr. Cefalu. Well, Congressman, as you've stated, the
innovations since the 1990s, the price has tripled since 2002
as far as list price. And this is one of the concerns is that
we don't know the factors behind how they set the list price.
It's not in the public domain and this gets back to increase an
in transparency, I can't speculate as to what those factors
are.
In the Working Group, again getting back to the
recommendations and conclusion of the Working Group, it's
increased transparency that will get to the bottom of these
price increases throughout the supply chain. So I don't know
those factors that increase the list prices.
Ms. Schakowsky. I actually have legislation on a
transparency bill. Let me just say that I want to associate
myself with what Dr. Burgess said and I feel that this is
considered a national, international health, lifesaving issue,
the issue of insulin and diabetes.
I think that we--and my time is up, but I would love to
hear and maybe I will submit it for the record why you might
think that we could save money, actually, if we would address
diabetes and provide insulin to the people who need it. And I
yield back.
Ms. DeGette. The Chair now recognizes the ever-patient Mr.
Sarbanes for 5 minutes.
Mr. Sarbanes. Thank you.
I just wanted you to speak to your confidence or lack of
confidence on whether you think we can actually achieve some of
these transparency measures that we have been talking about
today. You have been around a long time, you know how the PBMs
operate. And the manufacturers, you know that there is this
kind of hocus-pocus exercise that has been going on for decades
and the patients are left holding the bag on that.
So, you know, we are talking in a bipartisan way about the
problem you all are pretty unified in your views that there is
a problem, a structural problem that transparency would be a
very good first step. So are we just going through an exercise
here? What is your--I don't mean that you all are. But you are
looking at us and you know that it is hard to break the
stranglehold that the PBMs and the manufacturers have on how
the system works and they have kind of reached--I mean in
theory they are supposed to be at arm's length, but they have
managed to figure out a way to structure the system so they can
be negotiating at a level that always protects, it appears to
me, their profits at the expense of the patient.
So I just, I invite any of you to tell me maybe on a scale
of 1 to 10 how optimistic you are that within the next 5 years
we can achieve the transparency that would actually make a
difference in terms of the impact on insulin pricing, but any
other kind of pricing out there.
Dr. Cefalu. So there are a number of things that we can do,
and I think you've heard a lot of those recommendations today.
Based on what we understand, I think it's clear the cost
sharing for the patients is too much and whatever we can do to
remove or lower the cost sharing would be important, removing
insulin from the deductible, minimizing co-insurance, those are
some things that we need to move forward, making sure that
patients with diabetes continue to have the affordable health
insurance so they can take care of their disease.
We haven't talked much about biosimilars, but there are
steps moving to make more biosimilars available on the market.
If biosimilars were more like traditional generics, we would
have the lower price. And I know the FDA has taken some steps
to increase efficiency in the biosimilar process, so those are
some of the things that were pointed out from the Working
Group.
Mr. Sarbanes. By the way you just revealed yourself almost
to be a plant on my part because I, and you are not, but I
happened to introduce a biosimilars bill and have been working
very hard to respond to these pay-for-delay schemes in that
environment as well as with respect to prescription drugs. So
you are absolutely right that is something that can be done.
Dr. Cefalu. And the fourth thing that you've heard today is
that the patient with these negotiations are not benefiting and
just ensuring that the results of these negotiations, the
rebate and discounts, make it to the patient at the point of
sale to reduce the costs. So those are, I think, some general
principles that we should move toward to reduce the cost of
insulin.
Mr. Sarbanes. So I agree with all of that. But just coming
back to the question of how confident you are, what your level
of optimism is, particularly now that we are hearing bipartisan
criticism of the system, that we can actually get some of these
basic transparency measures in place. But before you answer, I
will just say that as far as I can tell there isn't any
consumer in America who needs medicine at one time or another
that is not impacted in that by the PBMs and how they operate.
And I am sitting here, every comment that you all have made
alludes to the profits that the PBMs are making and how they
are looking to maximize their profits. They could probably do
their job just as well if they were a nonprofit, I assume,
right, and the fact that they touch every American certainly
raises questions about whether they ought to be regulated more
like a utility than to operate as a for-profit industry. There
has got to be people in the room who just shuddered when I said
that. So I would, frankly, start from that perspective given
the impact that they have.
Any other comments? Yes, Ms. Marchand Aprigliano?
Ms. Marchand Aprigliano. See, you got it right.
I think the biggest issue is it's not just transparency.
Transparency is one thing. If we find out what the cost of each
section of the supply chain takes away from the patient it's
the actual action that Congress will help us as protectors of
the patients and citizens in the United States, whether it's
fixed fee per transaction, whether it's designing to mandate
that insulin is capped at a certain percentage, all of this has
to be done.
We all know exactly what needs to be done. The end result
is we need to have reasonable access and affordable access to
insulin. Transparency is the first step, but we have got
several other steps to go along with it. I am absolutely
resolute that we will find an answer and that Congress will
help us with that.
Mr. Sarbanes. Thank you and I yield.
Ms. DeGette. Thank you.
The Chair now recognizes Ms. Barragan for 5 minutes to
question.
Ms. Barragan. Thank you.
I want to thank the panelists for being here today and for
sharing your story. It is really heartbreaking when you hear
about people who have to choose between medication like insulin
and rent and other expenses.
Not long ago I was at the hospital with my mom who has
diabetes and her blood sugar was pretty high. And I remember
having a conversation about her needing insulin and the rising,
really, the skyrocketing cost of insulin. And I thought to
myself for a moment what would happen if we couldn't afford
this, because we hear these stories day in and day out. We hear
stories of people who ration, as you mention, the insulin and
then die. And when that is happening in America, something is
broken, and people look to Congress. And so today when I see
you, I thank you, and I speak on behalf of my mother and my
sister-in-law and the millions of Americans that are living
with diabetes.
I happen to represent a congressional district in
California that has the highest rate of diabetes than any other
congressional district in the State of California. It happens
to be a district that is about 88 percent Latino/African
American, communities of color, communities that are suffering,
and those who in my district have a very low household median
income. One of my colleagues handed a list of about all the
members and I think I was 350 of the household incomes.
Just to kind of show, I mean I represent areas like Compton
and Watts in south Los Angeles, and it is just unconscionable
that the price of insulin is unaffordable, and it really breaks
my heart. And one of the things I hear in my district,
certainly when I have town halls, is what is Congress doing?
What kind of oversight are we doing? I think this is a step.
But, frankly, I will tell you what I want to see, I want to
see the drug manufacturers brought in. I want to see the PBMs
brought in and I want us to ask the tough questions, because we
have got to get down to why this is happening. Why is it that
insulin has skyrocketed? What has happened? And let's hear from
them to get to a solution. Frankly, the American people think
that because they have a big lobby Congress is doing nothing,
and there may be instances where that is happening. And we have
to come together to show that we don't care about the lobby. We
don't care about private industry in the sense that we are
colluding with them, because sometimes the American people
think that. So I hope that we are going to have the oversight
hearing.
Ms. DeGette. Would the gentlelady yield?
Ms. Barragan. Sure.
Ms. DeGette. We are bringing them in next week.
Ms. Barragan. Fantastic.
Ms. DeGette. You are welcome.
Ms. Barragan. And that is why I said this was a great start
and I am really looking forward to having that conversation
because this is what the feedback that I am hearing in my
congressional district. And, frankly, we have been working for
the people in trying to fix healthcare in this country. It
hasn't been easy, and it has been very frustrating.
I want to ask Dr. Kowalski, can you outline how the rising
cost of insulin affects our minority communities and provide me
with an estimate, if you have any idea, how many people of
color die each year because they are unable to afford things
like insulin, lifesaving medication?
Mr. Kowalski. I don't know that we have the best data on
deaths due to lack of insulin, but we certainly know if you're
socioeconomically disadvantaged this is a huge burden. And we
heard across the income spectrum, but as you push lower it's
worse. And JDRF funds research across the country including
areas that are socioeconomically disadvantaged and often the
choice that are made are food on the table versus drugs. And
again, I think this is--it's so, I would call it penny unwise-
pound foolish, because we're cutting back and actually paying
heavily on the back end whether it's diabetic ketoacidosis,
diabetes complications, or, tragically, deaths. So this is a
gross injustice that needs to be fixed.
Ms. Barragan. Thank you.
Ms. Marchand Aprigliano, the current Secretary of Health
and Human Services, Alex Azar, was a former drug company
executive. While president of Eli Lilly, Secretary Azar oversaw
huge increases in the price of the company's insulin
medications. The U.S. list price of Humalog insulin has more
than doubled. How can we believe the current administration is
serious about reducing the price of insulin when President
Trump appoints the man who has contributed to the current drug
pricing crisis?
Ms. Marchand Aprigliano. I don't have an answer for that.
If anybody does have an answer for that I'm happy to listen.
All I know is that the system that we are currently living in
is unsustainable for individuals living with diabetes today.
Solutions come from all different sources and I'm hoping that
bipartisan support for individuals with diabetes to ensure that
access to affordable insulin is available for everybody
regardless of socioeconomic status, regardless of age, every
single person should not die or ration because of lack of
access. This is just one step.
Ms. Barragan. Great, thank you. I yield back.
Ms. DeGette. Thank you.
The Chair now recognizes Mr. Carter for 5 minutes.
Mr. Carter. Thank you very much, Madam Chair, for allowing
me to sit in on this meeting, and thank all of you for being
here. This is a very important hearing, I can attest. I
practiced pharmacy for over 30 years and I have dispensed a lot
of insulin over those years and I have seen what has happened
with the price of that and it is concerning.
But before I begin just a couple of questions, let me say
that I am proud to have Alex Azar as Secretary of Health and
Human Services. I think he has done an excellent job. He is
addressing a situation that the President has made one of his
primary initiatives, that is, prescription drug pricing and
specifically insulin drug pricing. Yes, Dr. Azar did serve as,
or Secretary Azar served as CEO of Eli Lilly, and in many ways,
I want someone, I want to know what is going on and I want
someone helping me who does know and has the inside track.
So having said that I would like to start with Dr. Cefalu?
I am sorry. I hope I got that right.
Dr. Cefalu. Cefalu.
Mr. Carter. Cefalu?
Dr. Cefalu. Cefalu.
Mr. Carter. Cefalu, excuse me. Well, thank you for being
here. I wanted to ask you, what about transparency? Do you
believe that transparency could help in the price of insulin or
could play a role in the price of insulin?
One thing that has always concerned me has been the very
opaque drug supply chain. I have dealt with this for many
years. In fact, before I became a member of the Energy and
Commerce Committee, I served on the Oversight Committee and we
had a situation where Mylan Pharmaceuticals, it was about the
price of the EpiPens.
And I had a chance to talk to the--or ask questions of the
CEO of Mylan at that time about when it left the manufacturer,
that is the beginning. I am the end. I am the pharmacist, I am
dispensing it. When it left the manufacturer, it was $150 and
that is what she told me and I believe her, and that is what
she told me, OK. But when I dispensed it at $600, well, what
happened in between? I am just trying to figure out can
transparency help us in this situation?
Dr. Cefalu. Well, transparency in and of itself is not the
answer. What transparency will do will help us understand the
factors that go into the flow of dollars. Some of the things
that you mentioned is trying to understand what happens between
each entity, and again we have to address this as a systemic
problem. Going after one entity in the supply chain is not
going to be the answer.
So understanding the negotiations between the manufacturer
and the wholesaler, understanding the fees, the discounts, the
rebates that occur between the manufacturer, and the pharmacy
benefit manager. The pharmacy benefit manager, how much rebate
goes to the health plan, how much is----
Mr. Carter. But that is transparency. What you are
describing is transparency.
Dr. Cefalu. That's transparency. Transparency----
Mr. Carter. So what you are saying is yes, we do need
transparency to understand the drug supply chain.
Dr. Cefalu. Transparency's needed to understand the drug
supply chain as to a long-term, coming up with a long-term,
viable solution.
Mr. Carter. Great. Are you familiar, Doctor, or are any of
you familiar with CMS's proposed rule changes as it goes to
discounts being offered at the point of sale, as opposed to the
way they are now where we don't even know where the discounts
are going or who they are being applied to? Any of you familiar
with that? I see you shaking your head. Any thoughts on that?
Dr. Cefalu. This aligns with some of the conclusions from
our Working Group, again to make sure the rebate makes it to
the patient at the point of sale.
Mr. Carter. Right. And do you believe that is happening
now?
Dr. Cefalu. I can't say that's happening now.
Mr. Carter. Neither can I and neither can anyone. I mean if
we don't have transparency we don't know. Anyone else care to
comment on that?
I am sorry, I can't----
Mr. Kowalski. JDRF is supportive of this. It's one
mechanism to remove rebates from the system and pass them along
to consumers. We need to see this in the commercial sector as
well. It's a step and I think we've heard there are systemic
issues, but we see this is an important step.
Mr. Carter. Good. And yes, ma'am?
Ms. Marchand Aprigliano. So the fact is that the safe
harbor protections, the two that have been recommended as part
of the proposal, the second step in this is a fixed fee per
transaction. And that is incredibly important when we're
talking about transparency, because all of a sudden that is
taken away, the rebates are taken away and what happens is that
this goes to the patient, not lost in the system.
Mr. Carter. Good. Well, thank you for pointing that out
because I would agree with you.
And, Dr. Cefalu, you are correct, we need transparency but
that is not the only thing we need. But I would submit to you
that that is an important part of what we are seeing right now.
If you look at the mission of the pharmacy benefit managers,
the PBMs, it will tell you their mission is to keep
prescription drug prices low. Well, I would ask you, how is
that working out? Obviously, it is not working out very well at
all.
And when you have three PBMs that control almost 80 percent
of the market, I don't think we have enough competition in that
area. I want transparency and we need transparency. It is the
only way we are ever going to see exactly how we can attack
this problem that impacts everyone. It is a nonpartisan
problem.
Thank you, Madam Chair, and I yield back.
Ms. DeGette. Thank you so much, Mr. Carter. The gentleman
yields back.
The ranking member and I have a few more questions that I
am going to ask and then he might have a few to follow up. But
I do want to say, you know, Mr.Sarbanes was asking all of you
how likely you felt it was that Congress would do anything, and
I don't blame you for not wanting to answer. I will say this. I
will say this though, you can see that the urgency that we all
feel about insulin pricing is bipartisan.
I mean, Mr. Guthrie and I have worked hand-in-hand
throughout this process. Usually the minority gets a witness
and we agreed all the witnesses are the majority and the
minority witnesses today. Ms. Brooks and Dr. Ruiz are both vice
chairs of the Diabetes Caucus of which I am the chair. We are
committed to fixing this. So I want to let all of you know this
and everybody else who is listening, we are committed to a
bipartisan solution and these questions I am asking are in that
vein.
The first one is, Dr. Powers, this is something that I
don't think has come out. People are asking about the list
price and some people think it is the manufacturer, some people
think it is the PBMs. But, in fact, virtually everybody in the
system ties their pricing to the list price; isn't that
correct?
Dr. Powers. That's my understanding.
Ms. DeGette. And so the higher the list price, everybody in
the whole system gets a higher reimbursement; isn't that also
correct?
Dr. Powers. Dr. Cefalu referred to the Working Group that
the ADA had and that was their conclusion. I remember that
Working Group and that was the conclusion of the Working Group.
Ms. DeGette. Right. So it is not just the manufacturers and
the PBMs, it is endemic to the whole system which is why we
need to adopt a lot of these changes; is that right, Dr.
Cefalu?
Dr. Cefalu. That is correct. Again, this is a systemic
problem and it's a dysfunctional system and every level of the
supply chain needs to have some accountability.
Ms. DeGette. That is right. And we are starting next week
with the PBMs and the manufacturers, but as chair I am saying
that I am not sure that we will be done with that after next
week.
Dr. Lipska, I want to ask you. Mr. Sarbanes alluded to this
issue of the biosimilars, but you held up your vial of insulin.
That insulin has not changed in a number of years; is that
right?
Dr. Lipska. That's correct.
Ms. DeGette. The only thing that's changed is the price.
Dr. Lipska. That's correct.
Ms. DeGette. But yet maybe, Dr. Cefalu, you can talk about
this too, but yet because of patent evergreening we have had an
inability to develop a range of generics; is that also correct?
Dr. Lipska. That's correct. And I think that was alluded to
in the fact that these companies have increased their prices
at, you know, at about the same time by the same amount
suggesting there is very limited competition among them.
Ms. DeGette. Dr. Cefalu, do you have anything to add about
that?
Dr. Cefalu. The newer formulations particularly in type 1,
and I know that Dr. Kowalski can talk about this, have some
added advantage over the old human insulins. I think that's
clear. What I don't want to see is that actually, and there are
a number of individuals on this panel that can talk to this
point, I don't think we're there yet as far as innovation for
the person with diabetes. We can say we have these wonderful
analog insulins now, but we still have unacceptable rates of
hypoglycemia which needs to be addressed.
So to Dr. Kowalski's point, we need to address the issue of
affordability, but we need to continue the innovation, because
from our perspective, we still need to advance newer and better
insulins to address this issue.
Ms. DeGette. Dr. Cefalu, I totally agree with you. But we
also need to find ways to get cheaper versions of the insulins
that we have, right?
Dr. Kowalski, maybe you can comment on this.
Mr. Kowalski. Yes, I think at JDRF we often say that we
believe in competition. That competition drives innovation and
affordability. And here we have a system where you have three
similar insulins going up instead of down in price, which is
confounding, and obviously we've heard that there are a lot of
reasons that's happening. We aren't saying that the insulin
companies shouldn't be profitable and invest in next generation
insulins.
Ms. DeGette. Right.
Mr. Kowalski. You heard from Dr. Powers that they're
selling insulin abroad at a much lower price. So the question
is, how can we make that happen in the United States of America
and make sure insulins are affordable? That good insulins--my
brother as I mentioned in my testimony has benefited from these
advances in these insulins, but they need to be affordable. You
do not achieve better outcomes. So having biosimilars or
generics come to the market is another mechanism to drive
affordability.
Ms. DeGette. Thank you.
OK, I have one last question. I want everybody on the panel
to briefly answer this question. Next week we are going to be
having much of the supply chain here. We are going to have all
three manufacturers and we are going to have the three largest
PBMs. So I want to ask each of you to tell me and Mr. Guthrie,
what is the one question next week you would ask of this panel?
Mr. Guthrie. That was my question. I was going to ask that.
Ms. DeGette. That was his--see, this is how bipartisan this
is.
Mr. Guthrie. Don't make it shorter. Yes, that was actually
my--asked that question.
Ms. DeGette. Ms. deVore?
Ms. deVore. I would ask them why in their FDA filings and
common talk amongst themselves at the time when they all, when
Nova Nordisk and Eli Lilly both filed for Humalog and for
Novolog that their statements included that insulin would
become cheaper to manufacture and how has that--why has that
turned out to not be the case.
Ms. DeGette. Thank you.
Dr. Cefalu?
Dr. Cefalu. I would ask them what is the hurdle from
preventing the negotiations of the supply chain from making it
down to the patient now.
Ms. DeGette. OK.
Dr. Powers?
Dr. Powers. I'd ask them what is the best plan to get to
affordable insulin, and why aren't we arriving at that, and
what are you doing to help with that process.
Ms. DeGette. Thank you.
Dr. Lipska?
Dr. Lipska. I would ask how many more Americans will it
take to die before prices come down.
Ms. DeGette. Thank you.
Ms. Marchand Aprigliano? We will have your name right by
the end, I think.
Ms. Marchand Aprigliano. Hopefully.
My question would be is what are you willing to give up in
order to make sure that every single person with diabetes has
access to affordable insulin.
Ms. DeGette. Thank you.
Dr. Kowalski?
Mr. Kowalski. I would ask how can we ensure that people
with diabetes are paying the net price and why aren't we seeing
that passed on to the consumer with diabetes.
Ms. DeGette. Thank you.
Mr. Guthrie?
Mr. Guthrie. That was my exact question. I was going to say
give me your elevator question that you would ask in 30 seconds
from--but so we have put a lot of research into this. We really
want to get this right because we have innovation coming, and
we want to make sure we have innovation in other areas of
diabetes delivery.
And so when we met with--I know I have met with at least--
specific manufacturers said that they don't believe anybody is
paying more than $99. And so you guys are with all the pay, all
the movement forward, you are saying that is just absolutely
not--because I want to get to it next week. So you are saying
that because we may hear that, that through all the programs,
whatever, people really aren't paying $1,400 a month. You are
saying there are clear examples of people paying $1,400 a month
that you know of. Not just anecdotal, people that you know of
that are paying those full prices, all of you? That will be
good to know.
Well, thank you--you wanted to----
Dr. Lipska. I can answer that question more specifically
because we asked people in the survey, how much do you pay
monthly or, sorry, annually for your insulin? And as you can
expect it was difficult for people to estimate exactly, but the
ranges, you know, were from zero to 5 to $600, on average,
throughout the year.
Mr. Guthrie. OK.
Mr. Kowalski. Ranking Member Guthrie, in my role at JDRF I
travel to almost every State in our great country and it is, as
I stated, the number one question I get with specific examples
of paying exorbitant out-of-pocket costs. So it's absolutely
still a prevalent problem.
Mr. Guthrie. Ms. deVore?
Ms. deVore. And I can leave this receipt for you. It is a
copy from January 19th of 2019 for $728.49 from a friend of
mine.
Mr. Guthrie. Thank you.
All right, I appreciate that. I just want to get that on
the record as we go forward.
Ms. DeGette. Thank you so much.
I want to thank all the witnesses for coming today. And--
let me get to my conclusion here. And I want to thank all of
the--this way? There we go. I want to thank everybody for
coming.
Pursuant to committee rules, Members have 10 business days
to submit additional questions for the record to be answered by
witnesses who have appeared before the subcommittee. And I
would ask all of you to respond promptly to any such questions
that you should receive, in particular if they are relevant to
next week's hearing that would help us in the hearing.
And with that--and we also may invite some of you back at
some point to brief us as to whether the companies are making
any progress. We are serious about this. And my staff says that
we might invite them back in September, but I think we might
invite them back sooner because we are really committed to
doing this. And with that the subcommittee is adjourned.
[Whereupon, at 12:52 p.m., the subcommittee was adjourned.]
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