On Thursday, the House passed a bill that limited the cost of insulin to $35 a month. However, 193 Republican members of the House did not feel that their voters needed to pay less for insulin. The price of insulin is a huge issue, but this bill subsidizes drug intermediaries at taxpayers’ expense.
Historically, 30% or more of type 2 diabetes patients required insulin therapy. However, many new drugs are available that may delay or prevent the need for insulin therapy. It’s expected that fewer and fewer individuals will need insulin replacement to control their blood sugars. It’s estimated that over thirty million people need insulin, but that doesn’t matter to Republicans.
Among those voting “no” was Rep. Matt Gaetz (R-Fla.), the GOP’s leading troll, who has come up with perhaps one of the most offensive justifications for GOP opposition to the popular bill. In his newsletter Friday, Gaetz told his constituents that he opposed the bill because fat people, not Big Pharma, are responsible for driving up the cost of insulin. He suggested that Type 2 diabetes, which is often linked to obesity, could be cured if only people would work out more and lose weight. They wouldn’t need insulin anymore, and the drug costs would fall without government intervention.
Once again, empathy doesn’t seem to be in the Republican vocabulary.
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 014, researchers determined that 30% of insulin revenue went to intermediaries. By 018, those same middlemen were receiving 53% of insulin expenditures.
The bill to cap insulin prices has the taxpayers paying PBMs instead of patients. That is unacceptable.
According to Hospital Review, “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 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. Gro s profit from PBM-owned mail-order and specialty pharmacies increased more than 13 percent, from $8.9 billion to $10.1 billion.
- CVS Health’s Pharmacy Services (PBM) segment will make 46% of $324 Billion in 2021 revenues for the company and remains key to its revenue growth.
- In 2019, Cigna’s total revenues more than doubled ($14.3 billion to $38.2 billion) and its Express Scripts Holding Co.
The insulin bill does nothing to address this price gouging. PBM claim to lower drug costs and premiums for employers and patients by negotiating significant price discounts from drugmakers. But hen, they pocket the savings to increase their own bottom lines.
With the cost of this bill, the government could quickly build their insulin plants, but it would be better to incentivize private companies to make these plants via tax breaks.
Republicans are in the pharma’s back pocket right near their wallets, and patients lose.