[Congressional Record Volume 167, Number 215 (Tuesday, December 14, 2021)]
[Senate]
[Pages S9130-S9132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Insulin
Mr. President, it turns out it is an anniversary, just this month.
You see, in 1921, 100 years ago, a Canadian scientist named Frederick
Banting discovered insulin. He sold the patent for this discovery to
the University of Toronto for $1. He declared that this lifesaving drug
didn't belong to him: ``It belongs to the world.''
He wasn't the only unselfish scientist I can remember. I remember, as
a kid, our fear of polio, and along came Dr. Jonas Salk--bless his
soul--who discovered the vaccine that we needed to protect ourselves.
There was no great political debate. People weren't threatening
lawsuits. My mom and dad said: Line up and roll up your sleeve, kid; we
are going to do what needs to be done to protect you from polio.
Dr. Jonas Salk gave away the patent to that drug as well. It was a
different era, perhaps, when insulin was discovered or the polio
vaccine, but we should reflect on the state of play today of that drug,
insulin.
One hundred years later, there are 8.4 million diabetics in the
United States who rely on insulin. They have to pay--many of them--an
exorbitant amount of money for a drug that supposedly belongs to them,
according to its discoverer.
As the cost of insulin has risen, average list prices
increased 40 percent for insulin between 2014 and 2018.
I am quoting from an article in today's USA Today by Katie Wedell.
Patients and their families shell out hundreds of dollars a
month even if they have good insurance.
Rod Regalado is a father of a teen with type 1 diabetes. Do you know
what he calls the insulin pricing system? Legal extortion.
This article tells the story of what he went through. He had never
heard of a pharmacy benefit manager before 2 years ago, but it was 2
years ago that his son Matt, then 14 years old, was diagnosed with type
1 diabetes, and Mr. Regalado got a crash course in insulin pricing in
America today.
His first trip to the pharmacy when his son was released
from a hospital came with a $1,000 price tag for all the
testing supplies and insulin he'd never purchased before. The
next month, when all he had to do was buy more insulin, the
price was still north of $400 after insurance.
The single dad of two said he thought he had good insurance
until he found himself having to redo his entire household
budget to afford the insulin to keep his son alive.
[[Page S9131]]
``I thought how do people do this?'' he said.
He is a resident of Tekamah, NE. He started making calls to his
insurance company, the pharmacy, and doctors, trying to figure out a
way to lower his out-of-pocket expenses for the insulin that his son
needed to survive.
Then he called his Congressman. Congressman Jeff Fortenberry, a
Republican of Nebraska, said in July: ``The harsh reality is that the
cost of insulin is artificially high and ever-escalating.''
He has introduced a bill for capping the prices. They call it Matt's
Act, after Mr. Regalado's son. Matt's Act would make insulin prices
fair for everyone by capping the price at $60 a vial and $20 a vial for
those on insurance.
What a dramatic difference that would make for the Regalado family in
Nebraska--instead of $400, $20.
The reason I raise that is that the provision in law that we are
trying to enact is in the same bill that the Republican leader just
came to the floor and told us America cannot afford. The tax increases
in that bill--and there will be tax increases--will only apply to
people making over $400,000 a year. And yet the Republican leader comes
to the floor and talks about this terrible idea of raising taxes.
So let's step back and measure the difference here. Should Mr.
Regalado--a single dad, father of two, with a 14-year-old son who needs
insulin to live--be paying $400 a month or $20 a month for the
insulin--the lifesaving insulin? And to make up the difference, is it
unfair to ask someone making over $400,000 a year to pay more in taxes?
You be the judge. I don't even think it is a close call.
What we need to do is to get down to business. I don't know that
there will be a single Republican voting to support this effort to
reduce the cost of insulin for diabetics. That is just the way politics
works in this Chamber, I am afraid. But I do hope that the 8 million
families who have a diabetic son or daughter, father or mother will
step up and speak up in the next few days because we have a chance to
bring this measure to the floor this year--a measure that will affect
many different areas of the law but, specifically, the cost of insulin
for American families.
If those 8 million families will stand up and speak up and say to
Members of the U.S. Senate, ``Enough, you have negotiated enough; close
the deal; do something that will be helpful to our families,'' just
maybe that can make a difference.
Maybe the endless negotiations that have gone on for month after
month after month will finally come to an end. Now is the time to get
it done. We have work to do in the Senate at clearing the bill for
final passage. But I think we are on track to get that done. What we
need to have is a groundswell of support from across the America.
When you take a look at the other provisions in the bill, helping
working families to pay for daycare--for goodness' sake, there is
hardly a family around, unless they are very wealthy, that isn't
concerned about the cost and quality of daycare available.
We have a provision in this bill, the same bill that Senator
McConnell spoke against just a few minutes ago, to help families pay
for daycare. Is it important to these families? Well, it is important
to my family. I visited with my granddaughter over the weekend, and I
am sure there are many people in my situation, with grandchildren, who
look at those kids and realize they should be in a safe, nurturing,
affordable environment every single day so mom and dad don't have to
think twice.
Is it important to have a provision in the law which says we are
going to provide home healthcare services to elderly members of our
family or disabled members of our family?
I will tell you this. The elderly folks whom I spoke to, the senior
citizens, want to stay independent as long as possible, and they want
to stay home as long as possible. If we can help them stay home and be
independent, why wouldn't we do it? If it means a tax increase for
people making over $400,000 a year, so be it. Sign me up for that
increase. That is the sort of thing I think we do in America. Those who
are well off pay a little bit more in taxes so those who are struggling
can get a helping hand.
So when the Republicans come to the floor and tell us how terrible
this bill is, well, tell it to 8 million families in America with
someone who needs insulin to stay alive each month. Tell it to the
millions of families with kids who want to make sure they have peace of
mind that these kids are being taken care of while they go to work.
Tell it to the families with elderly parents or people who are disabled
in their household who need a helping hand to be able to stay home and
have quality healthcare.
All of these things are addressed in this bill. It is important that
we pass it, and I hope we do it soon. But we need to hear from America
to create the momentum to get that job done.
Mr. President, I ask unanimous consent to have printed in the Record
this entire article, from USA Today, on insulin.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From USA Today]
`It Is Legal Extortion': Diabetics Pay Steep Price for Insulin as
Rebates Drive Up Costs
(By Katie Wedell)
In 1921, Canadian scientist Frederick Banting discovered
insulin and later sold the patent to the University of
Toronto for $1, declaring that the lifesaving drug did not
belong to him. ``It belongs to the world.''
One hundred years later, the 8.4 million diabetics in the
USA who rely on insulin pay an exorbitant amount of money for
a drug that supposedly belongs to them.
As the cost of insulin has risen--average list prices
increased 40% from 2014 to 2018--patients and their families
shell out hundreds of dollars a month even when they have
good insurance. They pay other bills late to keep their
insulin-dependent children alive. When they can't make ends
meet any other way, they ration their medication, often
ending up in a hospital because they could afford only a
fraction of the insulin they were supposed to use that month.
``It is legal extortion,'' Rod Regalado, father of a teen
with Type 1 diabetes, said about the opaque insulin pricing
system.
A bill that would create a federal cap on monthly insulin
out-of-pocket costs is named after his son. Matt's Act would
cap insulin prices at $20 to $60 a month or even $0 for those
with high-deductible health plans. Similar provisions are
included in the House-passed version of the Build Back Better
Act, which proposes an insurance co-pay cap of $35 for
insulin.
The bills attempt to simplify costs for consumers who are
kept in the dark when it comes to the complex negotiations
driving insulin prices up.
``If you or I were buying a gallon of milk from Kroger or
whoever, if we saw that it was $20, we would know that we're
getting ripped off,'' said Antonio Ciaccia, former lobbyist
for the Ohio Pharmacists Association and CEO of 46brooklyn, a
drug price research firm. ``The gallon of milk stays within a
slightly competitive range because we know where we could go
elsewhere to find a $3 gallon.''
That competitive price pressure doesn't exist in health
care, he said. ``Because we as cash-paying customers aren't
the predominant source of revenue for health care,''
In a report on insulin prices released in January, the
Senate Finance Committee laid out the numerous factors that
combine to make insulin so expensive.
The committee found that drug manufacturers continually
increase insulin's list price to offer larger rebates to
pharmacy benefit managers and health insurers, ``all in the
hopes that their product would receive preferred formulary
placement,'' the report said.
Pharmacy benefit managers, or PBMs, oversee the
prescription drug part of health plans--negotiating with
drugmakers for bulk discounts and deciding which drugs will
be covered and which will be excluded from their formularies
or approved drug lists. Their clients are health insurance
plans, including employers and government-run Medicare and
Medicaid.
No drugmaker wants to be left off the preferred list of a
big PBM such as CVS Caremark or Express Scripts, because tens
of millions of Americans are covered by insurers using their
services.
This pricing structure exists for almost every drug on the
market, but insulin has gotten focused attention because of
the number of diabetics that rely on the lifesaving drug and
the fact that it's 100 years old yet getting more expensive
every year.
``They're kind of between a rock and a hard place,''
Ciaccia said of the manufacturers. Many have made lower-cost
versions of their products available, but those don't get
listed on the formularies because they don't offer any
rebates on them, he said.
Rebates are payments offered back to the PBMs in exchange
for preferred placement on their formularies. If the list
price is $400 for an insulin product, the manufacturer may
make $100 and give the other $300 back to the PBM, which
typically passes those savings to its clients--employer and
commercial health plans.
Patients may be forced to pay that $400 list price when
they are in their deductible phase
[[Page S9132]]
and don't get any of that rebated money directly.
The government report found that manufacturers offered
higher and higher rebates each year, in fear of being kicked
off the preferred formularies. That means they must also
inflate the list price each year to keep pace.
In July 2013, insulin maker Sanofi offered rebates of 2% to
4% of the list price--also called the wholesale acquisition
cost or WAC--for preferred placement on CVS Caremark's
formulary, the finance committee found. Five years later,
Sanofi rebates were as high as 56%.
Critics of the rebate system say it amounts to legalized
kickbacks. In 2019, a class-action lawsuit accused
manufacturers and PBMs of engaging in a commercial bribery
``scheme,'' conspiring to raise the prices of insulin drugs
to increase the fees manufacturers paid to PBMs.
Pharmacy benefit managers say the manufacturers drive up
prices and keep out any competition from generics.
``Insulin pricing strategies used by drug manufacturers to
avoid competition through ongoing patent extensions on
insulin products are a significant barrier to getting costs
down,'' said Greg Lopes, spokesman for the Pharmaceutical
Care Management Association, which represents PBMs.
``PBMs have introduced programs to cap, or outright
eliminate, out-of-pocket costs on insulin, and PBMs have
stepped up efforts to help patients living with diabetes by
providing clinical support and education, which result in
better medication adherence and improve health outcomes,''
Lopes said.
Manufacturers, PBMs and nonprofits have set up patient
assistance and coupon programs to reduce what patients spend
on insulin. Each program has its own requirements to qualify,
its own rules and restrictions, and patients have to be aware
that the programs exist.
Drugmakers often advertise their patient assistance
programs, but the onus ultimately lies with the patient to
find and apply for free or reduced-cost insulin. Numerous
organizations have developed databases of assistance programs
to help patients navigate the sea of options, including
PhRMA's Medicine Assistance Tool, RxAssist, NeedyMeds and
Beyond Type1's GetInsulin.org.
``For the population that can take advantage of those
programs, that's great,'' said American Diabetes Association
Chief Advocacy Officer Lisa Murdock. ``We think insulin
should be affordable at the point of sale for everyone.''
Lopes pointed out that PBMs pass through to health plan
sponsors the vast amount of the rebates they negotiate. In
the case of Medicare Part D, the PCMA said that amount is
99.6%.
``The rebates are then used to lower premiums and out-of-
pocket costs for patients,'' Lopes said.
Consumers can pay hundreds more under rebate system
Nonprofit drug price research group 46brooklyn released a
report demonstrating how patients end up paying more because
of rebates.
It looked at a box of Lantus insulin pens--which hold pre-
dosed cartridges for easier injection--with a list price of
$425. According to the Finance Committee's report, Lantus
offered the PBM OptumRx a rebate of 79.76% or $339 in 2019.
The consumer's health plan gets that rebate every month
regardless of whether the consumer pays full-price in the
deductible phase or pays a smaller co-insurance amount later
in the year.
46brooklyn used a fictional consumer who has a deductible
of $1,644--a figure the Kaiser Family Foundation says is the
U.S. average.
Each month, January through April, the consumer in this
scenario would pay close to the full list price for insulin,
$408 in this case based on retail price data. Those same
months, the health plan, paying $0 toward the insulin, would
receive a $339 rebate. The manufacturer of the insulin would
get the difference, or $69 in this scenario.
The rest of the year, once the consumer hit his deductible,
he would pay about $34 for insulin each month. The health
plan, after rebates, would pay about $35, giving the
manufacturer the same total of $69.
At the end of the year, this fictional diabetic spent a
total of $1,906 for insulin while the manufacturer made $828.
The consumer's health plan via the PBM came out ahead,
profiting $1,078 after getting more than $4,000 worth of
rebates.
If all the middlemen and insurance were cut out, and the
consumer was simply charged the net cost of the drug every
month, 46brooklyn argued, the consumer would save more than
$1,000 a year while the manufacturer would make the same
profit.
A study by researchers at the University of Southern
California found that manufacturers, often blamed for rising
prices, actually make less money as list prices rise. Since
2014, while list prices rose by 40%, the net price that
manufacturers made off their insulin products decreased more
than 30%, according to the study published in the Journal of
the American Medical Association.
The PCMA disputed the accuracy of 46brooklyn's rebate
scenario.
``By cherry picking an extreme and unrealistic example of
high patient out-of-pocket costs, the 46brooklyn report does
a poor job of depicting the health care experience for most
insured people with diabetes,'' Lopes said. ``For example,
the report's out-of-pocket cost assumption is actually
significantly higher than the amount at which many plans set
or cap patient cost sharing for insulin.''
There are consumers who reported paying $400 out-of-pocket
for a month's supply of insulin after insurance. Rod Regalado
is one of them.
A father's crusade
Regalado had never heard of a pharmacy benefit manager
before two years ago.
That's when his son Matt, then 14, was diagnosed with Type
1 diabetes and Regalado got a crash course in insulin
pricing.
His first trip to the pharmacy when his son was released
from a hospital came with a $1,000 price tag for all the
testing supplies and insulin he'd never purchased before. The
next month, when all he had to do was buy more insulin, the
price was still north of $400 after insurance.
The single dad of two said he thought he had good insurance
until he found himself having to redo his entire household
budget to afford insulin.
``I thought how do people do this?'' he said.
The resident of Tekamah, Nebraska, started making calls to
his insurance, pharmacy and doctors, trying to figure out a
way to lower his out-of-pocket costs. Then he called his
congressman.
``The harsh reality is that the cost of insulin is
artificially high and ever-escalating,'' U.S. Rep. Jeff
Fortenberry, R-Neb., said in July when he and Rep. Angie
Craig, D-Minn., reintroduced their bill aimed at capping
prices. ``Matt's Act makes insulin prices fair for everyone
by capping the price at $60 a vial and $20 a vial for those
on insurance.''
Though legislative efforts have focused on capping out-of-
pocket costs, there has been a push to eliminate rebates
altogether and drive down list prices across the market. That
would require the buy-in of all parts of the drug supply
chain.
Some PBMs have created formularies that don't require
rebates, but they struggle to get health plans to adopt them.
The insurers have come to expect and rely on the money from
rebates, and some have them written into their PBM contracts.
`A momentous day'
Ciaccia of 46brooklyn pointed to the new insulin product
Semglee as an example of how dysfunctional the marketplace
can be.
In July, the FDA approved Semglee as the first
interchangeable biosimilar insulin product. Biosimilars are
like generic drugs in that they can be substituted at the
pharmacy counter without needing a separate prescription.
Semglee is interchangeable with Lantus.
More biosimilars are likely to gain approval in the next
few years. They've been touted as game changers that will
lead to lower prices and more options for patients.
Acting FDA Commissioner Janet Woodcock called it ``a
momentous day'' for people who depend on insulin.
``Biosimilar and interchangeable biosimilar products have the
potential to greatly reduce health care costs,'' she said.
Biocon and Viatris, the makers of Semglee, launched two
different versions of the drug--the branded one called
Semglee and a nonbranded version called insulin glargine.
The nonbranded version's list price is about $148 for a
package of five 3-ml pens, which is 65% cheaper than Lantus.
There is indication that the largest PBMs in the country
won't carry that version on their preferred drug formularies,
instead offering the branded Semglee, which has a reported
list price of $404 per package of five. That makes it only
slightly cheaper than Lantus at $425.
The ACTING PRESIDENT pro tempore. The Republican whip.
Mr. THUNE. Mr. President, I ask unanimous consent that I be able to
complete my remarks prior to the vote.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.