Congressional Report Makes Recommendations to Decrease Insulin Prices, Includes Follow-on Products

In a recently published bipartisan report, representatives Diana DeGette, D-Colorado, and Tom Reed, R-New York, co-chairs of the Congressional Diabetes Caucus, released findings from a year-long inquiry into the sources of ever-increasing insulin prices.

The inquiry provided an overview of the nuances in the insulin market as compared with the traditional prescription drug market, and policy recommendations aimed at lowering insulin prices. Since 2012, the average price of insulin has nearly doubled, leading many Americans who rely on the lifesaving medication unable to afford the drug.

In order to address high insulin prices, the inquiry offered several policy changes, including:

1. Combatting upward prices by encouraging the development and use of value-based contracts between insulin makers and pharmacy benefit managers (PBMs). The authors noted that value-based contracts are a delivery-based contract that is able to bring down costs. This is because they create an arrangement between different entities along the supply chain that pay higher rates for better patient health outcomes, instead of for higher sale volume. Implementing value-based contracts in the insulin space could lower list prices.

2. Changing competitive market forces by encouraging the development of follow-on insulin drugs by addressing patent extensions. The first follow-on insulin product was approved by the FDA in 2015. These drugs, formulated as cheaper versions of branded insulins, could provide a cost savings to patients if there were more available on the market. To expedite the approval process, the Congressional Diabetes Caucus recommended that the FDA allow exceptions or fast-track approval for certain follow-on insulin products if they are off-patent and meet certain quality and comparative effectiveness standards.

3. Require manufacturers to disclose their insulin’s list pricing process. The Congressional Diabetes Caucus suggested that Congress introduce transparency legislation that would require drug manufacturers to disclose how their insulin prices are set. This action would in turn place potential downward pressure on list prices.

4. Cap out-of-pocket expenses for prescription drugs that are needed for chronic conditions. Chronic conditions such as diabetes are long-lasting that may get worse over time. As such, patients with similar disease must take prescription drugs throughout their lives in order to manage their conditions. By capping out-of-pocket costs for life-sustaining drugs, such as insulin, it would help patients better manage their disease and avoid adverse effects.

To learn more about follow-on insulin products, click here.