Two key House policymakers released a report Thursday to target spiking insulin costs, setting a potential template for broader congressional action on drug pricing next year.
The recommendations from Reps. Tom Reed (R-N.Y.) and Diana DeGette (D-Colo.), who co-chair the Congressional Diabetes Caucus, would shake up how manufacturers use rebates. The lawmakers called on Congress to limit patent extensions which have allowed insulin manufacturers to stop new generics from entering the market.
"Experts predict that follow-on insulins could cost 20% to 40% less than their brand name equivalents, creating savings for patients," the report states.
Legislation could block drugmakers and pharmacy benefit managers (PBMs) from driving costs up along the distribution chain, according to the caucus report. These include a potential mandate for value-based contracts between wholesalers and PBMs who participate in Medicare, Medicaid or individual and employer markets; a proposed requirement for PBMs and health plans to disclose how many rebates they receive and pass along, and what they are worth; and a link of patient out-of-pocket costs to prices negotiated in the supply chain rather than to list prices.
The analysis also recommended Congress encourage generic manufacturers to produce older forms of insulin by banning the "pay-for-delay" practice in which the expired patent-holding brand drugmaker pays a generic manufacturer not to produce the off-patent drug.
The transparency legislation included in the lawmakers' report mirrors a law signed in 2017 by Nevada's Republican Gov. Brian Sandoval, which would force manufacturers to make public how they set their prices for insulin. It's considered the strictest law on insulin pricing to date.
About 7.5 million U.S. diabetics need insulin, while prices have continued to soar. Between 2002 and 2013 the average price tripled, according to the American Diabetes Association. Typical out-of-pocket costs for patients went from about $40 per vial to $130.