UnitedHealth Group will eliminate cost-sharing for insulin and certain other prescription drug for many policyholders as soon as next year, CEO Andrew Witty said during an earnings call Friday.
The company's UnitedHealthcare subsidiary will no longer require out-of-pocket spending from fully insured group members for the following medications:
- Insulin for diabetes;
- Epinephrine for severe allergic reactions;
- Albuterol for acute asthma attacks;
- Glucagon for hypoglycemia; and
- Naloxone for opioid overdoses.
"While this is an important step for vulnerable people's health, the larger and longer-term cost containment of drugs depends upon manufacturers restraining and lowering the list price of their products, which is a fundamental driver of costs," Witty said during the call. The company expects the change in its pharmacy benefits to reduce overall spending by preventing patients from becoming sicker, he said.
The average cash price for a single unit of insulin rose 41% between 2014 and 2021, data from the prescription drug discount company GoodRx show. Prices fell between 2019 and 2021 in part because the Food and Drug Administration approved several generic versions of the biologic drug, according to GoodRx.
UnitedHealthcare's announcement demonstrates that insurers ultimately decide what patients pay out-of-pocket for prescription drugs, a Pharmaceutical Research and Manufacturers of America spokesperson wrote in an email.
About 688,000 of UnitedHealthcare's 8 million fully insured group members use these medicines, a spokesperson wrote in an email. UnitedHealthcare plans to encourage its self-funded employer customers to consider including this benefit in their plan designs for 2023, a UnitedHealthcare spokesperson said.
More than 37 million Americans, or 11% of the population are diagnosed with diabetes, and 8.4 million rely on insulin to survive, according to the American Diabetes Association. The disease cost $327 billion in 2017, the organization said. One in four insulin users report rationing the medication–by skipping doses or taking less than they need–because of cost.
Other insurers and pharmacy benefit managers have policies designed to reduce insulin costs for patients.
Insulin and other glucose-lowering agents were the most common items covered pre-deductible among 300 businesses the Employee Benefit Research Institute surveyed in 2019. Two-thirds of employer-sponsored health plans paid the full cost for enrollees, according to the report. Forty-three percent also covered inhaled corticosteroid inhalers for asthma before their deductibles, the survey found.
In 2020, CVS Health's Caremark PBM began allowing plan sponsors to offer all categories of diabetes medications at zero cost for members without raising premiums. The year before, Cigna and its PBM Express Scripts began capping out-of-pocket costs for insulin at $25 per month.
Waiving cost-sharing for drugs doesn't lead to higher spending or premium increases, said Paul Fronstin, director of health benefits research at the Employee Benefit Research Institute. Because people with chronic conditions are likely to reach their out-of-pocket maximums each year, covering the insulin costs will not raise expenses for health plans, he said.
Fifteen states have adopted insulin copay caps and legislation is pending in 22 others, according to the diaTribe Foundation, a diabetes patient advocacy group.
The high cost of insulin has attracted intensifying political attention. President Donald Trump and President Joe Biden both promoted policies to make the medication more affordable. The House passed a bill in March that would cap monthly out-of-pocket insulin costs at $35 for those with private health insurance and Medicare.
Differing regulations governing drug rebates likely led UnitedHealthcare to limit its new policy to fully insured plans, as opposed to government-sponsored products such as Medicare Advantage, said Antonio Ciaccia, CEO of drug pricing research firm 46brooklyn Research and president of the consulting firm 3 Axis Advisors. "There are better and more stricter regulations in the Medicare space that require most of those rebates to essentially be passed through," he said.
During the second quarter, UnitedHealth Group reported $80.3 billion in revenue, up 13% from $71.3 billion. Net income rose 18.9% to $5.1 billion. UnitedHealthcare membership grew from 49.6 million to 51.2 million compared to the year-ago quarter.
