The House is preparing to vote on a $35 monthly insulin cap later, but there is stern opposition to the plan, which could cost billions over ten years. Essentially taxpayers would be subsidizing drug company profits for the price of a product that should have come down a long time ago.
Under the bill proposed, Medicare beneficiaries and those insured through private plans would pay no more than $35 for a 30-day insulin prescription, or the lesser of $35 or 25% of the plan’s negotiated price for a 30-day prescription.
This could cost taxpayers billions over the year. With the money it costs us, the Government could encourage a private company to build a manufacturing facility for insulin while offering tax incentives.
Even with health insurance, some people pay up to $1,000 a month for insulin. Dr. Jing Luo says the list price of insulin — the price set by manufacturers but not necessarily what patients or providers pay — has increased between 300% to 500%. He says that there are a limited number of manufactures in the U.S., he says.
Research shows that the three-drug companies that dominate global insulin sales — Novo Nordisk, Eli Lilly, and Sanofi may not be entirely to blame for the soaring costs to people with diabetes. Researchers at USC found that drugmakers’ share of revenue from insulin sales has declined in recent years — and a more significant share is being siphoned off by pharmacy benefit managers, drugstores, wholesalers, and insurers.
In 2014, researchers determined, 30% of insulin revenue went to middlemen. By 2018, those same middlemen were receiving 53% of insulin expenditures.
Los Angeles Times
Drug middlemen have been increasing their share of sales for a while, and some House members are finally calling for an investigation into PBM practices.
Between 2017 and 2019, pharmacy benefit managers’ gross profit increased by 12 percent despite PBM retention of manufacturer rebates decreasing during this period, according to a report released on Dec. 2 by the PBM Accountability Project.
The report showed that the PBM gross profit increased from $25 billion to $28 billion between 2017 and 2019. It also showed that the sources of these profits changed significantly.
During this time, manufacturers’ gross profit from administrative fees for services provided by PBMs increased 51 percent, from $3.8 billion to $5.7 billion. Gross profit from PBM-owned mail-order, and specialty pharmacies increased more than 13 percent, from $8.9 billion to $10.1 billion.