Monday, March 08, 2021

GoodRx Upends Healthcare Price Obfuscation

As Dr. Elisabeth Rosenthal told NPR in 2017 (listen to or read the interview at -- it was fascinating), Americans are told over and over again that they need to be  good consumers of healthcare services. But she explained that in order to be a good consumer, you need to know a price. Healthcare in the U.S. is one of the few markets in which no one can tell the consumer what the prices for their services actually are. (And she added "P.S., a lot of medicine isn't so elective. Your doctor says hey, you need to have your hip replaced. Or your doctor says, I'm going to fill out a requisition for this blood test. Here's the lab I'm sending it to. You don't really have a lot of choice").

Dr. Rosenthal gave the example, if a doctor tells you that you need to get that your wrist X-rayed after you fall, you can call 10 different X-ray centers. But no one can tell you what the price for those services are. Instead, they're all going to tell you that "it depends on your insurance" or "we don't know".

That's the very definition of a failed marketplace. 

If lawmakers expect to reform it, there has to be a lot more transparency. But transparency alone won't fix it because so many entities involved have grown accustomed to collecting money they have not earned), but it needs to be there. Hidden or secret prices does not enable consumers to comparison shop or to be good consumers of healthcare services. In prescription drugs, the amount spent on discounts given to healthcare insurance company payers is routinely defended by pharma as "trade secrets".

Prescription Drugs: The Definition of Healthcare Price Obfuscation

Picking up a prescription from the pharmacy seems like it should be a straightforward process from a consumer perspective: the doctor writes the prescription, the pharmacy fills it, and when it's ready to be picked up, the consumer shows up. 

In the background, however, the process is anything but straightforward. And virtually none of the decisions that have an economic impact on the consumer are made by any of the stakeholders involved in the prescription-fulfillment process: few doctors will know the out-of-pocket costs the consumer will face, the pharmacy doesn't set the price, and consumers often face sticker shock when they arrive, unaware that the same prescription may be available at a lower cost at another pharmacy down the street.  

Behind the curtain are actors and forces that in general seek to reduce healthcare costs at a system level but, as each has its own set of incentives, whose efforts frequently conspire to put consumers at a disadvantage. 

That's why a Los Angeles-based digital health company known as GoodRx (founded in 2011) which successfully went public last September is a rarity because it actually shows how price transparency in healthcare can be very profitable and serve the public interest, too. The nine year-old company is already very profitable, with $388 million in 2019 revenue and, more surprisingly, $139 million in operating profit.

GoodRx is perhaps best known for making prescription drug pricing transparent and offering discount coupons to consumers, allowing consumers to shop for which pharmacy provides the best combination of price and convenience. The company earns revenue only when it saves people money. Thus far, the company estimates it has helped Americans realize $20 billion in savings.

GoodRx fits in by helping different groups of consumers save money on prescription drugs:

  1. For uninsured or underinsured consumers, GoodRx allows consumers to tap into and leverage PBMs' scale and purchasing power to negotiate drug prices down from pharmacies' bogus "usual and customary" prices'
  2. For commercially-insured consumers, GoodRx still allows consumers to access PBMs' discounts (which are often denied to patients unless they have satisfied a deductible) to identify when discount card options are actually lower cost than the consumers' own insurance copays are for a given drug. For patients still satisfying insurance deductibles, many find the GoodRx prices are cheaper - often by a substantial amount. 

With insulin, for example, patients can get coupons to buy it for 75% off with a GoodRx coupon . In fact, while logic would suggest that the majority of GoodRx users are in the uninsured group, GoodRx reports that almost 75% of its users are actually insured.

GoodRx isn't alone. Like all good ideas, others have copied it. There are now more than a dozen competitors. Not all offer the best discounts, but patients can do their price-shopping before even going to the pharmacy and bring the coupon that offers the price they want to pay with them to the checkout.

That explains why at the 2021 J.P. Morgan Healthcare Conference Pfizer's CEO Albert Bourla spoke with someone from J.P. Morgan. Although I think Mr. Bourla lacks the polish and finesse of his predecessor Ken Frazier, he didn't get the brass ring because he's clueless about how Pfizer runs. Towards the end the session at J.P. Morgan 2021, Mr. Bourla shared an interesting thought on the future of U.S. healthcare reform: 

"I think [rising out-of-pocket cost] has become a unanimous concern for all of us. If you ask any of my peers, and good friends, they'll tell you that one of the highest concerns is that in the U.S., patients are getting their medicines like if they DON'T have insurance, even if they DO have it. That's the result of a system that was driven by rebates, and we're stimulating wrong behaviors. We've arrived at a situation where we need reform – that needs to change ... We believe that the #1 priority of any healthcare reform is to reduce the out-of-pocket cost for patients. That's #1. Everybody should contribute to that. But we should contribute, insurance companies should contribute, the state should contribute – everyone should contribute. This is a must because it's not a sustainable situation and that creates a lot of animosity. It is the fundamental base of why things are so tense in the healthcare section..." 

Of course, the animosity towards pharma is due to the fact that it defends the $185 billion in prescription drug rebates which the industry spent in 2019. Beyond that, the "state" as he refers to it already contributes a LOT more than anyone realizes which Bourla fails to acknowledge. For example, the Congressional Budget Office (CBO) revealed in 2019 that U.S. taxpayer subsidies for employer-sponsored healthcare insurance plans was $567 billion. Mr. Bourla may be right that all parties need to contribute, there is no denying that the drug industry has defended its use of prescription drug rebates as "trade secrets" and that patients end up paying for it.

Forbes had an interesting article about GoodRx which is worth having a look at, see it at

Monday, February 08, 2021

How to Navigate Life with a Chronic Disease Like T1D and High-Deductible Insurance Plans

Over the years, I've learned (based on my personal experience) some useful money-saving ways to navigate high-deductible insurance plans when you live with autoimmune Type 1 diabetes. One is that it helps to take advantage of any tax-advantaged (pre-tax) employee benefits offered by your employer including Flexible Spending Accounts (FSA's) and/or Healthcare Savings Accounts (HSA's) if you have access. There are differences between them, but they're both governed by IRS rules. They enable you to use pre-tax dollars for eligible healthcare expenses and reduce your taxable income. There's another FSA benefit: your employer is obliged to pre-fund the entire FSA amount you select on January 1, but if you resign on February 1, you can still use all the money even if your pay hasn't funded it yet. 

There are nuances between HSA's and FSA's, and some people actually use both. Charles Schwab had an interesting article entitled "Are HSA's the New IRA's?" (see the article at which you can review if you're interested in reading more on the subject. Although FSA dollars are "Use it, or lose it", that was never a problem for me as a person with a chronic illness like Type 1 diabetes. When I knew I was leaving my employer, I simply purchased of several Dexcom CGM sensors and bought them using the Visa card accessing my FSA. When my last day at the employer happened, I had just $0.03 remaining in the account, but I left the company in March, meaning it was my employer's money, because I hadn't been paid enough to fund it completely by March. Those are the IRS rules, so I was entitled to do it -- but it was kind of a parting gift from a former employer which THEY paid for, not me!

Bypass Insurance When Buying Prescriptions Until You've Satisfied a Deductible

But perhaps the most powerful financial tool is to simply bypass insurance completely until you have satisfied your insurance deductible. The short explanation is that your healthcare insurance company is working to screw you. If you have a high-deductible insurance plan, a crude analogy is that your insurance company is trying to screw you from both the front and the back. That means you need to learn to play the game correctly, or you'll end up paying thousands of dollars more than you need to. 

The reason I made such a crude analogy is because today, health insurance companies are receiving massive discounts of more than 70% on life-sustaining insulin, yet they are allowing patients to pay the bogus pharmacy "list" prices (calling that the "plan cost" for insulin) — even when the patient uses the PBM's mail-order pharmacy which is supposed to save the insurance company money. In fact, Novo Nordisk revealed during its Q4 2020 Earnings Presentation to investors (found on slide #103 of the presentation archived at if you're interested) that the company was paying 74% of the company's U.S. gross insulin sales as rebates paid to Pharmacy Benefits Managers (PBM's), who are contractually obliged to pass-thru 100% of all Rx rebates received to the insurance company which owns them or hires them. On top of all that, even while patients are paying like $250/vial for insulin, your insurance company only gives you credit applied towards your deductible of about $70 (which works out to like 25% of what you're paying).

The bogus prescription "list" price is also often used as the pharmacy's Usual & Customary (U&C) price given to cash-paying customers (plus a small markup that the pharmacy adds as its profit margin, only their contracts with third-party Pharmacy Benefits Managers [or PBM's] don't allow pharmacies to really markup Rx drug prices, instead they are paid a small transaction processing fee on each Rx script handled thru insurance). But there is nothing that requires anyone to use insurance and it may prove more beneficial to bypass insurance because they are not giving you nearly as much credit applied towards your deductible that way. 

My Right Care Alliance Presentation 

On November 15, 2020, I did a presentation for the nonprofit Right Care Alliance in which I revealed how anyone (ANYONE) can get rapid-acting insulin analogues for 75% off the bogus list price with modern, coupon generating websites/smartphone apps. There's a lot of relevant information in my presentation so I encourage you to read it. The presentation itself is only about 15 pages and there are plenty of graphics. I recommend you have a look below, or by visiting

Coupon-Generating Apps/Websites 

Coupon-generating websites/apps are a new wrinkle in a not-at-all transparent but dysfunctional cash-flow behind the runaway U.S. prescription drug pricing mess. These work on drugs like insulin as well as medical devices such as blood glucose test strips and CGM sensors. However, the latter tend to be far less-heavily rebated than insulin is, so the discounts are not as big. I should also acknowledge that these are not only for those with high-deductible insurance plans, those in the Medicare donut hole or those without insurance can also use these tools. 

Best Tools for Insulin Discounts of 75% Off

The number of such websites/apps continues to grow, and while not all websites/apps offer discounts on insulin, some do. In my assessment, the most relevant ones are GoodRx and RxSaver A third is ScriptSave WellRx Each of these offer discounts for rapid-acting insulin analogues which is among the most heavily-rebated prescription drugs in existence. Beware that prices for insulin pens are slightly higher, whereas if you fill a 90-day supply of insulin, the price per vial is slightly less.

These websites/apps all offer discounts on the authorized generic versions of rapid acting insulin analogues; but long-acting analogues seem to be the exception. Some do refer patients to manufacturer discount programs. Sanofi's Lantus, for example, is offering coupons to buy it without insurance for $99/vial. Biosimilar versions of insulin glargine also exist and might be worth considering if the price is right, including Lilly Basaglar and Viatris/Mylan (Biocon) Semglee which may also offer meaningful manufacturer discounts. So far, other basal insulin varieties do not yet have biosimilars since patents have different expiration dates and some of Novo Nordisk's patents on basal insulins have yet to expire. Beware that some coupon-generating websites/apps seem to default to the most costly packages (notably insulin pens, which are significantly more expensive than vials and syringes so I would never recommend using those if you're paying cash), but just beware of exactly what form of the drug the site/app is searching for (some offer the ability to change from boxes of insulin pens to 10 ml vials, for example).

Other discount websites/apps worth investigating could also get you discounts on things like test strips, syringes, and other prescriptions including cholesterol-lowering drugs, blood pressure medications, and even CGM sensors which have transitioned from being classified as durable medical equipment (DME) to a prescription now sold in pharmacies. Check out BlinkHealth, SingleCare, Americas Pharmacy, and others such as BuzzRx United Healthcare's OptumRx offers something called OptumPerks which also has potential to help with some non-diabetes prescriptions. I haven't found OptumPerks to provide any meaningful discounts, but it's an option and things change all the time. I should acknowledge that using these apps adds a new layer of complexity to the purchase process. 

Shop for Discount Prices Before Going to the Pharmacy

My advice is to check out all of them before you even visit the pharmacy. Be sure to search under the generic drug name (not only the brand-name), and identify both the lowest price at a pharmacy located near you, and print a copy of the coupon to take with you for each script. In my experience, Walgreens is the place where I found the lowest prices on authorized generic versions of insulin, at less than $70/vial. Once the coupon is entered into your pharmacy's system, it will remember it (so when you refill it, they will default to the coupon). Once you have satisfied your deductible, you will also need to keep this in mind and tell them to process it using the correct payment method: your insurance card. 

Consider Using "Generic" Test Strips 

Aside from those tools enabling people who have not yet satisfied a deductible (or those who lack healthcare insurance) to access deeply-discounted, PBM-negotiated prescription drug prices (as well as discounts on test strips and CGM sensors), I also view startups selling generic test strips as another rather useful tool. I chose generic test strips because they were much cheaper. 

I'm not talking about a store-branded meter and strips made by some unnamed Chinese entity, but U.S.-based companies selling test strips which work in meters made by big manufacturers like Lifescan. Some have concerns about accuracy, and if that is a concern for you, you might consider using coupon-generating apps/websites instead. My readers may recall (see my post HERE) I test-drove use of these generics during the pandemic. I was pleased enough to make it an ongoing strategy while I stocked inventory of the preferred formulary brand. In a comparison of the brand-name strips and the generics, the results were very close. Plus, I still have access to my Dexcom readings, so I can use the test strips as an adjunct to that (and I'm old enough to recall when the FDA considered CGM's as an "adjunct" to traditional fingerstick tests). 

Luckily, I also have a stash of many different old meters still in my possession (most brands since insurance plans and/or new insurance carriers have forced me to switch brands often), including my trusty old OneTouch Ultra meter (the original model, not the Ultra II model) which served me well for many years. With a single replacement #2032 battery acquired from my local dollar store, it was ready to work again. If you do not have one but want to go this route, you can buy the Ultra II or Mini models in most pharmacies, or you can always try eBay. 

Currently, there are 2 generic brands: Unistrip1 from Charlotte, NC-based Unistrip Technologies, Inc. and GenUltimate! from Westlake Village, CA-based PharmaTech Solutions, Inc. Unistrip1's test strips are made in Taiwan, whereas PharmaTech Solution, Inc's GenUltimate! test strips are made in South Korea. 

Neither appears to operate an online store of their own (although they do refer you to a preferred retail partner), but there are plenty of sellers in the online space. But the cost for their products are a lot less than Lifescan's OneTouch Ultra test strips cost. As a practical reality, that means patients can buy generic strips which work in OneTouch Ultra meters at a cost of about $50.00 for 300 test strips vs. only 50 strips for about the same price as the brand-name product. It means more strips per dollar spent. On a per-strip basis, the cost works out to be about $0.16 per strip. If I bought the brand-name in the pharmacy, it would cost about $0.90 per strip, or maybe as low as $0.86 per strip with a GoodRx coupon. My preference is the Unistrip1 product since I think it requires a marginally-smaller blood sample, but I was happy to buy some GenUltimate! strips on clearance (because the expiration dates were < 1 yr away) for $7.95 for a vial of 50, so I bought 300 of them. That was just a happy accident.

However, in general, the more generic strips you buy from online sellers, the lower your cost on a per-strip basis becomes. That does not usually happen when you patronize a brick-and-mortar store or use your insurance company mail-order pharmacy. 

My Recent High-Deductible Experience Has Changed Due to New(ish) IRS Rules

Recall that I blogged about a long-overdue change implemented by the U.S. Internal Revenue Service (IRS) which expanded the list of medicines and devices eligible for pre-deductible insurance coverage (see my post HERE to read that). Even though that rule will eventually benefit many more people, insurance companies are fine taking the taxpayer subsidies without passing them on to patients covered by the plans. None chose to change any existing plans, only new plans they sold. Eventually, they'll have to or risk an IRS audit, but they can cite different "plan years" for a while, which means they weren't going to do it with any existing plans, only new plans. 

Still, with my most recent insurance carrier switch came its long-overdue adoption of the 2019 IRS rule change which made insulin a "preventative" medical treatment meaning patients no longer need to satisfy a deductible to get insurance to pay for it. For some reason, they exclude glucometers even though they are included on the IRS list, and they also only cover one brand of statin. Another downside: unlike the last time I was covered by Aetna in 2016, they no longer have Lilly insulin on their preferred drug formulary, now its Novo Nordisk insulins. They also switched me from OneTouch meters to Accu-Check meters. I'm not a fan of Novo Nordisk insulins. They have never worked well for me personally, even though I've been forced to use them on occasion. I found Novolog was not much more rapid than regular. At least that was true for Novolog. But I've been OK with Fiasp as long as it's being paid for by insurance. But if I was paying out-of-pocket (as many are when they are satisfying a healthcare insurance deductible), I would be choosing Lilly Insulin Lispro. But for those who find Novo Nordisk Insulin Aspart their preferred brand, if you ask your doctor to prescribe a generic-named insulin variety, you can easily switch to the brand-name once you've met your deductible amount, enabling you to switch seamlessly at the pharmacy checkout counter.


So, this is a method to survive a high-deductible insurance plan without breaking the bank. I have done it, so I know it works. Keep in mind: insurance companies feel entitled to screw patients (you are not their customer, your employer is). Don't let them do it to you!

Tuesday, October 13, 2020

Get Humalog or Novolog for $68/vial TODAY

First, this is NOT another page dedicated to bogus manufacturer Patient Assistance Programs. Having lived with Type 1 diabetes for nearly 50 years, I can honestly tell you I have never met a person who qualified for those fake programs. Ever. 

Yet as we head into a new year, for people with high-deductible insurance plans, the deductible reset dates often start at "open enrollment" which is in November at many organizations (although some plans use the calendar year as the reset date for deductibles, which means January 1 -- a lousy way to wish patients a happy new year and that's slightly over a month away). Other companies have different plan dates, so if you have employer-based insurance coverage, you can verify with HR to determine the start date for your particular healthcare plan. 

In recent years, we've heard of horror stories about caravans of Americans headed to Canada or Mexico to buy less-costly insulin because prices in the U.S. are so out-of-control. It finally became a PR disaster for manufacturers like Eli Lilly & Co., Novo Nordisk and Sanofi. Even while those same companies bankrolled trade groups like PhRMA to fight/litigate any and all state initiatives to regulate what they were doing behind-the-scenes, enough pressure forced the two biggest insulin manufacturers (Lilly and Novo Nordisk) to offer a response to a problem they had created. Their solution: to introduce supposedly half-priced versions which they call "authorized generics". Although the nation's largest pharmacy chain CVS simply refuses to even carry the cheaper versions, its biggest rival Walgreens (which recently acquired another chain known as Rite Aid) does sell them. The curious thing is that in spite of Lilly and Novo Nordisk slashing insulin prices in half, their own bottom lines were not impacted at all. 

Nada. Zilch. 

To be sure, insulin-makers aren't exactly sitting pretty. We know that the realized "net" prices that Lilly, Novo Nordisk and Sanofi make on insulin have not risen after all the big fat rebates of  >70% given to some entity other than patients (see an article published in the Wall Street Journal on March 4, 2020 entitled "Sanofi, Fighting Back in Insulin Price Debate, Says Its Net Prices Fell 11%" at for detail) to pharmacy benefits managers ("PBM's") hired by or owned outright by the largest healthcare insurance companies. I described that in a recent post I did entitled "It's the Rebates, Stupid". 

Rebates are a problem of pharma's own creation, yet ironically, they seem to defend the practice. I suspect they likely could fix it if they really wanted to, so its odd, but its not patients' problem to worry about pharma's problem with rebates. The problem is that mergers have created insurance companies who are as big as pharma and now the shoe's on the other foot. But pharma has been more than willing to take care of themselves while patients have suffered from runaway prices. Price caps simply force insurance companies to give the rebates to the individual who generated those rebates. I don't necessarily think they are the best solution, but many red and blue states are doing them, and they work. 

But what if you live in a place that hasn't capped insulin prices and your deductible resets in November or January? 

The good news is that you can readily get the "authorized generics" of  rapid-acting insulin analogs for about $67/vial or $68/vial with coupons. Today, I found a coupon to get the authorized generic version of Novolog (insulin aspart) for about $67/vial. Key is to search using "insulin aspart" not Novolog. RxSaver (which was acquired by RetailMeNot in 2018) seems to be the low-price winner for that type of insulin. Its sold in Walgreens and some smaller pharmacies, just not at CVS because that pharmacy chain refuses to even carry the lower-priced versions, which means you should go to Walgreens instead (at least until you've satisfied your deductible). Just be sure to ask your doctor to prescribe your insulin with the generic drug name rather than the brand-name (ask them to prescribe either U-100 Insulin Lispro or U-100 Insulin Aspart).

Rival Humalog (insulin lispro) also sells for $68/vial today with a readily-available coupon. I first found a coupon at that price available from GoodRx today (also at Walgreens, Rite Aid or some other pharmacies, just not CVS). The low-priced GoodRx coupon for "insulin lispro" is pictured below.

For insulin aspart at GoodRx was a mere $4 higher, but why pay that much for it? Just use the app that offers the lowest-cost insulin product for your needs. The prices for both authorized generics are quite a bit less than the "half-price" advertised by the insulin makers (Novo Nordisk introduced its version with hardly any fanfare, but the fact that it copied Lilly's move is validation that it concluded that was the best way to respond to the pricing price crisis it perpetuates, but you will need a free coupon from either or RxSaver by RetailMeNot. 

The apps (or online using a browser) are free and they work. Catch my post about the first time I discovered them at if you want more background about how they work. But the key to it is the coupon. there are a lot out there including some advertising on TV, but some don't offer insulin discounts, so you have to do some homework, but these are readily available in the U.S. today without having to provide any personal info (unless you want them to email or text it to you).

Tuesday, September 29, 2020

"It's the Rx rebates, stupid!"

Although my last post addressed one realistic solution to an embedded problem in the U.S. healthcare system related to prescriptions of life-sustaining essentials like insulin (which isn't a NEW drug; it was discovered in 1921), the problem has never really been explained which is necessary when interacting with lawmakers about potential legislative solutions to the problem of runaway insulin prices. So, this post aims to be an explainer. 

Insulin is today a prescription medicine (it used to be OTC, and early-generations still are, but with the advent of analog insulin, the drug companies persuaded the FDA to reclassify insulin as a prescription drug rather than OTC, which was the first step towards runaway prices) and there are only a handful of manufacturers worldwide. That is the root of the problem, but not due to a lack of competition, but because of the primary way insulin makers compete on price. Instead of price transparency, they rely on secret deals and discounts are awarded through rebates offered to payers rather than reducing the prices up-front. They artificially raise the list price of insulin so they can give ever-bigger rebates to insurance companies who pay for most prescriptions.

The Rx rebates ARE the problem, and it's an enormous problem!

According to the June 29, 2020 report entitled "Diabetes Costs and Affordability in the United States" by the IQVIA Institute for Human Data Science (see for the free report if you provide an email address), invoice prices for diabetes medicines have been growing above the rate of inflation while "net" prices paid to the drug companies have been declining-to-flat for five years. Stated another way, "net" realized prices for insulin paid for by insurance companies after rebates have declined, yet patient out-of-pocket costs have increased dramatically. This dichotomy is explained by several important factors documented here.

Changes in Health Insurance Benefit Designs and High-Deductible Insurance Plans

The single most important factor behind dramatic price increases experienced by patients is changes in healthcare insurance benefit designs, most notably high-deductible insurance plans (HDIP). According to several reputable third-parties including the Commonwealth Fund, HDIP today account for more than half of all insurance benefits which Americans receive through their employers. The incidence of HDIP has increased steadily in recent years and now constitutes a majority of all healthcare plans in 2020. That explains why more Americans are acutely more sensitive to prescription drug prices than they were in the past.

Of course, the decision to charge insured patients the artificially-inflated wholesale acquisition cost (better known as a drug's "list price") for prescriptions including insulin depends on each particular insurance plan. But, when all is said and done, all of that money (and it's a LOT, noted below) is going someplace. I will map out exactly WHERE that money is going for consideration in policy changes needed for Congress. We know the amount of dollars involved, and we know where it is going. In 2018, we know that pharmaceutical manufacturers paid $166 billion in rebates and discounts. Certain essential drug categories including insulin sell at even deeper discounts

The image below appears to be one of the most accurate visual depictions of the U.S. insulin distribution and cash-flow published to-date. It is courtesy of the American Diabetes Association. There is, however, ONE missing component to this depiction which is critical and relevant: employers who actually play a role today. But the bottom line is that in virtually all cases, insurers (which includes entities like Medicare) control that cash-flow. 

Click on image to enlage
Click on image to enlarge 

So, the most obvious question is WHERE are all those Billions of Rx rebate dollars going?

On March 4, 2020, insulin maker Sanofi revealed in a Wall Street Journal article entitled "Sanofi, Fighting Back in Insulin Price Debate, Says Its Net Prices Fell 11%" (see that article at for more detail) the amount of those rebates. The WSJ article revealed that because of the large and ever-growing rebates necessary to secure formulary placement in the U.S., and those insulin rebates amount to approximately 70% of the artificially-inflated list price for insulin which is rebated back to payers (in this case, meaning healthcare insurance companies who either own outright or else hire third-party pharmacy benefits managers known as "PBM's") as volume-based price concessions (e.g. a higher percentage rebate for more sales volume of a given Rx drug). Rival Novo Nordisk disclosed that it pays about 71% of the bogus list price (see slides #99 and #101) as Rx rebates paid to PBM"s (most of which are OWNED by the largest insurance companies). But it doesn't mean insurance companies are keeping those dollars. 

Unfortunately, determining the destination for all that money is no small undertaking thanks to a change to ordinary net cost accounting standards typically used in financial statements. About 25 years ago, the healthcare insurance industry lobbied the Financial Accounting Standards Board (FASB) for an exemption to normal net cost accounting standards for prescription drug rebates indirectly received from pharmaceutical manufacturers. 

Today, insurance companies erroneously misclassify this money as "general revenue" and do not itemize it as a specific line-item in their financial statements. This makes following the money difficult for even forensic accountants. At the time rebates first emerged, the dollars were not large and there were hundreds of insurance plans, but thanks to relentless mergers and acquisitions, today, only a handful of national healthcare insurance plans remain and the rebates themselves have ballooned into billions of dollars. Hence, although Rx rebates began innocently enough, over time, they ballooned into a massive dollar amount. That now needs serious reform.

Following the Money

But we now KNOW where those dollars are going. According to the Commonwealth Fund, pharmacy benefit managers (PBM's) "report that in many of their contracts, 90% of rebates are passed on to health plans and payers." 

Beyond that, Adam Fein of the Drug Channels Institute and Pembroke Consulting cited reporting from the Pharmacy Benefit Management Institute (PBMI). The data in their reporting (see Adam Fein's posts HERE and HERE for details) suggest that employers admit that they are 'hoarding' Rx rebates rather than sharing the savings with the employees whose prescriptions generated the rebates. He specifically cites specific data reported by Bloomberg on Humalog insulin in the second post. I think its less of a conscious move, rather than a decision to ignore where the money is coming from.

In other words, its EMPLOYERS who are receiving most of the insulin rebate dollars. That’s why the omission in the ADA flow-chart above is so notable. Employers are justifiably happy to receive any offset to rising insurance premiums, hence many do not ponder WHO is bankrolling that. And, for the insurance companies, they are able to give premium offset discounts because it's not their money in the first place. That's great for insurance companies, but it is patients who end up paying for it. Not only are patients with diabetes paying more with high-deductibles, but they are also also subsidizing premiums paid by their employers!

Insurance plans could choose to use these Rx rebates to lower the costs of the sickest patients, whose frequent purchases of expensive drugs allow manufacturers to give rebates in the first place. Instead, health plans prefer to apply the rebates to the price of average plans, hoping to compete for new business through lower premiums paid for by patients with illnesses. 

FDA to Insurers: "You're Doing It Wrong!"

This is precisely why former commissioner of the U.S. Food and Drug Administration (FDA) Dr. Scott Gottlieb made headlines at a conference organized by the health insurance industry known as the National Health Policy Conference of AHIP on March 7, 2018 when he told the attendees (see for details): 

"Sick people aren't supposed to be subsidizing the healthy. That's exactly the opposite of what most people thought they were buying when they bought into the notion of having insurance." 

And yet, that is exactly what is happening today. 

Aaron Kowalski, PhD, the CEO of the JDRF, wrote in a journal submission to the American Journal of Managed Care  (see

"We see the issues related to the rebate system as being the biggest challenge for us right now. In a normal capital market where you have at least 3 similar products, as we do for most types of insulin, you’d see competition driving retail prices down. The rebate system lets the 3 insulin makers chase the prices up rather than chase them down. It hurts everyone, but it is extremely painful to people who are uninsured, who are underinsured, and who have high deductibles or copays."

Insulin Price Caps Work, But Don't Fix the Underlying Rebate Problem

Insulin price-caps have been debated by the legislatures in over a dozen states from blue to red, from Illinois and Oregon to Utah and Tennessee (catch my post on that HERE). A number have passed price caps into law, and more are doing so all the time. The reason is because it impacts millions of people, and it's a solution that works, although it does not really disrupt the system as it works today and that system is so dysfunctional and badly in need of reform.

The reason legislation that caps out-of-pocket spending on insulin works is because it forces healthcare plans to give patients the benefit of their realized lower "net" costs on prescription drugs such as insulin rather than passing that savings on to employers as premium offsets, which is what happens today. This observation is consistent with the fact that an out-of-pocket insulin cap had a negligible impact on overall healthcare insurance premiums in the State of Colorado (see an article at

But capping prices at a specific dollar amount isn't the best way to do it. Prices change over time, but legislation that caps prices at specific dollar amounts won't change. Instead, it should be capped at the "net" realized price attained by healthcare insurance plans licensed in a state.

I should also note that insulin price caps solves the problem for only ONE prescription drug (insulin is one of the most-heavily rebated drugs in existence, if not THE most heavily-rebated, so it's a useful place to start to help millions of people). But other prescriptions, including blood glucose testing supplies is excluded, so the problem continues unabated. Price caps are a Band-Aid applied to massive problem of prescription drug rebate reform which lawmakers are likely to face voter complaints for failure to fix a broader problem of runaway prices for prescription drugs. But the real solution is not necessarily price caps (there will be inevitable efforts to adjust the dollar amount of the cap over time), but prescription drug rebate reform.

Wednesday, September 23, 2020

More Games With U.S. Insulin Prices and Coupons (or why GoodRx works)

This week, I did something unplanned: I bought a vial of Lilly's "authorized generic" of its brand-name U-100 insulin analog usually branded as Humalog (insulin lispro rDNA origin) at my neighborhood Walgreens for just $68.38! The reason it was unplanned is because I already met the deductible for my insurance plan, so I hadn't expected to deal with this until it resets in January (maybe, I think my new plan covers it without having met the deductible but we'll see). But I had a script I last filled before I met the deductible, and the pharmacy sent a text telling me it was time to refill. In reality, I have insulin but its a different brand and a different pharmacy. But Walgreens wants a sale so it was telling me it is time to refill. I had a coupon to get it for a price comparable to what it sells for in Europe, Canada and elsewhere and I wanted to see if it really worked. It did!

According to insulin manufacturer Eli Lilly & Company, Inc. the price of its "authorized generic" of U-100 insulin lispro product is supposedly half-price of the "list price" for the branded version known as Humalog (U-100 insulin lispro rDNA origin). Both are made by Lilly. I bought it since I was able to get it for >$30 less than I had paid out-of-pocket last time (and that was a big discount without insurance), and I wanted to ensure I really could pay that price for insulin, and I discovered it worked!

According to the Lilly press release, the list price for a vial of the "authorized generic" version of Humalog is $137.35 per vial which it asserts is half-price. Back-of-the-envelope math means that the price for a vial of the brand-name version of the product known as Humalog should theoretically be $274.70 per vial. I don't know if that's truly the price, when I was paying for it out-of-pocket, I actually paid MORE than that amount, at least once. I now have a different insurance plan (its become an almost annual tradition, which means I've been covered by Aetna, Anthem, Cigna, Emblem Health, and United Healthcare over the past few years, and each time it means non-medical switching to whichever insulin brand pays the insurance company the most money in rebates). But that was WITH an insurance card. Truth be told, I stopped paying for insulin through insurance when I was paying my deductible because not only did my insurance give me less credit applied towards my deductible than I actually paid, but I also discovered that I could pay LESS for the product, too -- meaning only a fool pays that price. 

But it also raises big questions about what the real price for insulin sold in the U.S. actually is?

If you're paying out-of-pocket, the prices become even more obfuscated and they're already pretty hidden with insurance. That means either someone isn't being truthful, or even when patients are in deductible phase, many are actually being overcharged for the product. We know that most of that money is benefiting insurance plan sponsors (employers) who pay premiums for insurance plans. That's because most insurance plans pass 90% or  100% of Rx rebates they receive onto plan sponsors who take that money as an offset to premiums without considering who's actually bankrolling that. After all, its not THEIR money, so it costs insurance nothing to give it to employers in order to sell a new insurance policy.

In reality, $137.35 may not be quite a half-price for a vial of the brand-name product of Humalog insulin. Because no one ever discloses what the true price really is, so we're left to take the word of parties who have never been exactly truthful about prices. However, I discovered that with GoodRx, the price patients pay was $68.38/vial at my local Walgreens, which I think is actually about half-price. (Although rival Novo Nordisk has also promised a half-price version of its rapid-acting insulins, so far, their cheaper products are not yet widely available). The reason I think GoodRx's $68.38 is probably the true half-price is according to an article written by  Dr. Elisabeth Rosenthal (now the editor-in-chief at Kaiser Health News, and author of "An American Sickness: How Healthcare Became Big Business and How You Can Take it Back") when Lilly announced its half-price "authorized generic" earlier this year, she wrote "In Germany, the list price of a vial of Humalog is about $55 — or $45 if you buy 5 at a time — and that includes some taxes and markup fees." Therefore, Americans shouldn't feel grateful for $137 Insulin.

But in order for me to even get that price, I needed a coupon. As it turns out, there are a variety of different coupons available — you just need to know where to get them. The only thing is you cannot fill a script for Lilly's "authorized generic" of insulin lispro at a CVS Pharmacy because that company simply refuses to even carry it. The reason is because it makes too much money on the rebates paid on the brand-name product.

Fortunately, I asked my doctor to write the script for a vial of "insulin lispro" which I initially filled for with Sanofi's Humalog biosimilar known as Admelog (I went to Walgreens, not CVS because there's one closer to where I live, and in the midst of the Covid-19 pandemic in NYC, I could simply walk around the corner and wait in line for 3 hours) because I had a coupon to get it for $99.00 per vial, which was vastly cheaper than the alternatives (at least at the time; today there are alternatives). My experience with using Admelog was very good; I did not have to make any adjustments to insulin-to-carb or correction ratios, so in my opinion, that was as close to interchangeable as it comes. 

By comparison, with "therapeutically equivalent" products such as Novo Nordisk insulin aspart (branded as either Novolog or Fiasp) or Sanofi's Apridra (U-100 insulin glulisine rDNA origin), that never happens. It always requires me to test and test again to come up with brand new ratios. Of course, insurance never provides any additional test strips when doing a non-medical brand switch of this type, which they should. Plus the product never works quite the same as the one it replaces. The peak hits at different times, and the "tail" lasts for different durations. Today, my insurance only covers Novo Nordisk insulin varieties, so I've been using Fiasp. Fortunately, its a new plan which means insurance actually charges the copay amount to patients even still in deductible phase. They should be doing so; they are getting generous tax benefits from U.S. taxpayers via the IRS in order to do so.

Because my doctor wrote the script for "insulin lispro", I discovered Walgreens could fill my script with brand-name Lilly Humalog, Sanofi Admelog, or Lilly Lispro (the "authorized generic") and potentially others from companies like Mylan and co-development partner Biocon, as well as Novartis' Sandoz unit in the future — the difference is what price will be charged. With coupons, that's another layer to the murky price patients are charged. In the end, for this go-around, the pharmacist told me that with the coupon from GoodRx for the 'authorized' Lilly Lispro, I'd pay about $131.00 for 2 vials, which works out to be about $65.00/vial. GoodRx notes: "You may find that filling a 90-day supply will reduce your total cost for this prescription." But I bought just 1 for exactly $68.38 which was vastly different in price from what I would have paid without a coupon.

So, take your pick. But take my advice: don't dare pay full price for insulin if you can avoid it with an app like GoodRx. Almost no one does. Even if you're paying down towards a deductible, it will cost you less money to use one of the coupons than it will to buy it with insurance involved. Insurance only gives you credit for their deeply-discounted price applied towards your deductible amount. The only exception is when you're getting close to satisfying the deductible and need an insulin refill. That could push you towards satisfying the deductible amount (maybe).

For Sanofi's coupon, in order to get its $99.00/vial of Admelog (U-100 insulin lispro rDNA origin), you should visit Unlike many bogus "patient assistance programs" which hardly anyone qualifies for, you can actually get this discount coupon today. 

But you'll be asked to answer a few 'eligibility' questions. Just be sure to answer those questions correctly, or they could respond by telling you that you're somehow ineligible for the discount coupon. Don't believe it. They will ask you to answer the following questions; I've provided the answers you must give in order to get the coupon.

1. Are you a current resident of the United States, Puerto Rico, Guam, or the U.S. Virgin Islands? Answer "Yes" to this question (side-note: if you lived in any other place on earth, you would be paying a fraction of what you do in the U.S. and territories!).

2. Are you a patient 18 years of age or older? Answer "Yes" to this question.

3. Do you currently receive Medicaid? Answer "No" to this question.

4. Are you currently serving in the U.S. military? Answer "No" to this question.

5. Do you qualify for Medicare? Answer "No" to this question.

6. Do you have commercial/private insurance? Answer "No" to this question.

7. Do any of the following apply: 

  • You are 65 years of age or older and neither you nor your spouse is working, 
  • You are receiving Social Security payments because of a disability,  
  • You have end-stage renal disease 

Again, you must answer "No" to this question. 

Questions about serving in the U.S. military, or whether you're eligible for Medicaid or Medicare are irrelevant and Sanofi isn't really entitled to know that. Whether you qualify for any of those government insurance plans is not relevant to how you are actually PAYING for their insulin. The reason is because you will not be not using any of those to actually FILL your prescription, hence you are paying out-of-pocket and are therefore entitled to the discount offered with the coupon. 

GoodRx is different, but you should know about it. It's free. The company is a Los Angeles-based (technically, its based in the beach town of Santa Monica, but its still Los Angeles County) and recently filed paperwork with the Securities and Exchange Commission (SEC) in anticipation of becoming a publicly-traded company. Adam Fein, a consultant who runs the Drug Channels Institute, which is a consulting firm which makes money by advising clients (either pharmacy chains, drug manufacturers or drug distribution system entitites like PBM's and drug wholesalers) to maximize their own profits from the dysfunctional U.S. prescription drug system (the word "system" is a misnomer, but whatever) recently addressed GoodRx in a blog post. 

Adam Fein likes to refer to himself as a doctor, and technically-speaking that's true. But he has a PhD, not an MD which is a bit of misrepresentation of his actual qualifications. Self-important people tend to do that. Adam never went to med school and he's never taken any medical boards. Instead, he's more of a bean counter for an obscure niche of the U.S. healthcare system. I worked for a mathematician with a PhD for years, but she never called herself a doctor even in proposals because she felt it was misleading and didn't want to have to explain the reality that she knew absolutely nothing about medicine, so she just used her name. But Adam thinks you'll be more impressed when he calls himself Dr. Adam J. Fein. I could care less; but I do think his explanation about how GoodRx works is useful background info. He wrote a post called "How GoodRx Profits from Our Broken Pharmacy Pricing System" (see for more). 

He said: "The company [GoodRx] is insanely profitable. Its adjusted net income—earnings before interest, taxes, depreciation, and amortization (EBITDA)—is an astonishing 40%."

Fein summarizes the GoodRx revenue model as follows:

  1. Start with the pharmacy's bogus cash prescription price (YES, he used the word BOGUS, except its not bogus for many)
  2. Save money for consumers by providing easy access to a PBM's network rates (he adds: "GoodRx partners with multiple PBM's, including Express Scripts, OptumRx, MedImpact, and Navitus")
  3. Collect a portion of the fee that the pharmacy pays the PBM

He says "The GoodRx team has built and scaled a robust platform for monetizing the three steps above" adding "Think about it this way: GoodRx profits by helping consumers avoid the U.S. pharmacy industry's historical cash pricing models."

Fair enough. But the reality is that as long as the U.S. prescription drug market is so dysfunctional, it is up to the individual paying the bills to figure out how to help themselves navigate through it. For anyone trying to satisfy a healthcare insurance plan deductible, it means YOU are the one paying the bill for at least part of the year. And, because insulin happens to be one of the most heavily-rebated prescription medicines in existence, that means people with diabetes need to learn enough about it to avoid paying too much. As it turns out, Lilly's Insulin Lispro product can be attained at prices at least comparable to what people in places like Canada or Germany pay. 

Note that GoodRx also has a coupon for $71.72 at Walgreens for Novo Nordisk insulin aspart (which is the "authorized generic" version of Novolog). Its not quite as deeply-discounted as the "authorized generic" of Humalog is, but its a mere $3.34 more, so its only marginally more costly if you're a person who does better with Novo Nordisk's products rather than Lilly's. Note that there's no coupon for Fiasp. If you're struggling to pay for insulin, I'd say have your doctor prescribe insulin lispro because its cheaper, but I do think the coupons for either are a meaningful enough discount to help many patients as we head into the 2021 deductible reset.

Biosimilars are one option. Sanofi makes a version of Humalog and offers coupons to get that for $99.00/vial which isn't terrible. But GoodRx offers the so-called Lilly "Half-Priced" Humalog for $68.38, or the half-priced version of Novolog for $71.72. As of today, the Lilly version is the least-costly rapid-acting insulin analog GoodRx is offering at that price, but the prices are low enough to make a worthwhile difference as we head into 2021 and insurance deductibles reset. 

Long-acting insulin analog varieties such as Sanofi Lantus, or biosimilars of that known as Lilly Basaglar and Mylan and Biocon's Semglee seemed to be less-heavily discounted perhaps because it is so widely used by many patients with Type 2. That said, biosimilar copies of Lantus including Lilly's Basaglar or Semglee may offer coupons for even deeper discounts. In general, competition for the exact same insulin (for which, there are now at least 3 brands) tends to result in greater discounting.

Even amongst those, a seach for Semglee revealed GoodRx had coupons for a vial of that sold for $105.71 at several different pharmacies (not quite as discounted as the authorized generic version of Lilly Insulin Lispro, but most patients don't use as much basal insulin as they do insulin for bolus coverage of meals and corrections. By comparison, Lantus and Basaglar did not seem to offer as generous discount coupons at GoodRx (although the websites of those insulin brands may offer coupons). But that insulin is the one that will have the most biosimilar versions. There are currently two, but we know of at least two more in development from Sandoz and Lannett in the works. Typically, the more versions of the same product which exist, discounts and coupons are the way that competition manifests itself in the market.

Note that GoodRx has different coupons for use at different pharmacies in your geographic area and on different prescription drugs. I say lowest price wins, but I'll leave that decision up to you. It has a mobile app you can use in-store.

Saturday, June 20, 2020

Going Diabetes Old-School During the Pandemic

During the recent pandemic (between March and June 2020, although we are still not completely out of quarantine, we are now in Phase II of reopening), I decided to go old-school on diabetes supplies.

Specifically, I went back to one of the many old blood glucose meters I'd saved over the years. All of them still worked, although I discarded a few for which test strips are no longer sold or had leaked battery acid in the battery compartment.

I made a notable exception for one particular meter model...

Specifically, I had saved a few of the OneTouch Ultra (1) meters I had in my possession. I also had a few OneTouch Ultra 2 meters in inventory, but opted for the original older model because the batteries in all of the meters in my possession were either completely dead or had been removed. The original OneTouch Ultra (1) meter required just a single #2032 battery, whereas the Ultra 2 meter required two of the same batteries. I was able to get a few of those batteries in a dollar store I visited over Memorial Day weekend, so it wasn't a major investment -- it was $1.00.

Going Diabetes Old-School

The reason I went old-school on testing supplies was because I had a pretty large stash of unused test strips which had been given to me by a clinical trial I opted not to participate in (there were some possible adverse events I really did not want to risk experiencing, and there was a good chance I would have been in the "control" group meaning I would not benefit from the treatment anyway, so it just seemed like more trouble than it was worth to participate in that trial). Although the strips in my possession had officially expired (they were more than three years past expiration date), when I tested myself (I repeated the trial on several occasions) using both an unexpired box of the "good" new test strips and the slightly older but technically-expired old test strips, the readings were nearly identical (or within 1-5 mg/dL). That was good enough for me.

Since I was at home for the entire time under quarantine (as was most of the NYC region), I saw little to no risk of using up the old (expired) inventory. I kept using the old system by buying even more inventory from a third-party manufacturer of test strips. Specifically, I went with the Unistrip1 brand of strips made by a company known as Unistrip Technologies, LLC although they actually subcontract the manufacture of their strips to a third-party contract manufacturer. 

Unistrip1 is a brand of generic test strips which work in the old J&J Lifescan OneTouch Ultra blood glucose testing system. As noted, I also restocked some replacement strips for a fairly low cost. I acknowledge that in 2014, there was an FDA recall  of Unistrip's test strips. But that recall was not extended by FDA and I have not seen any further issues. As the J&J litigation and attempts to spread bad word-of-mouth on the product subsided by the fact that J&J sold the business to a private equity firm a few years ago, that has kind of died down. My own comparison tests proved they were fine for my needs while I was quarantined.

But generic replacement strips are now sold online for about $0.10/strip to $0.20/strip (depending on the quantity purchased) by using a strip made by another manufacturer sold from one of the many different suppliers online. I used price to drive my decision on which one (the lowest price won, I went with a company called Medical Supply Corner which wasn't the fastest delivery but offered low-costs and free shipping when I bought the strips), and I bought like another 300 test strips which I am now very close to exhausting. In the meantime, I also refilled the formulary brand (which happened to be Lifescan Verio IQ) since that was Cigna's preferred formulary brand of test strips at the time. But I was recently switched from Cigna to Aetna, which means switching to Roche Accu-Chek meters and strips. Once the insurance broker properly loads up the deductibles (so they don't charge as if I had not already met it - which I have), then I plan to order that brand in the maximum quantity I can.

There are some rival generic manufacturers of these test strips, among them made by PharmaTech Solutions, Inc's. GenUltimate! brand which sells for about the same price (although I found Unistrip1 products to be more readily available from online retail outlets). Those test strips are made at a plant in South Korea but sell for about the same price as Unistrip1. There is another rival called TruePoint which appears to be made by OKBiotech in Taiwan; the company doesn't operate a U.S. website but does sell its products on Amazon and elsewhere although I have not found the prices quite as competitive as Unistrip1 has been. A few others have come and gone over the years as well.

I had previously used the old OneTouch Ultra meter quite extensively in the past. About the only significant change I really noticed compared to the OneTouch Verio tests which aimed to replace that (when faced with a number of generic competitors for the strips) is that Lifescan decided to replace them with Verio which was incompatible with the old meter/strips ... I don't think they even make the meters anymore, although they do make the strips themselves. Right now, there is a lot of unused inventory of the old meters still available for purchase at retailers around the country. The biggest change was the need for calibration, which was a temporary hassle. Most modern blood glucose test systems have abandoned the calibration requirement. It put more burden on the patient for the manufacturers' decision not to control their manufacturing as tightly as necessary. The Verio test strips also have a design which are narrower at the top of the strip,  and because they use real gold as the conductor metal (its cost-effective), that design modification saves Lifescan money. The other very annoying thing is that the old Ultra meter its a multi-step process to get the last reading; first you must scroll through useless averages of the past 15 and 30 days -- which is very annoying when you're trying to get your last reading. But the results of the testing in both systems are equally reliable.

But Lifescan's (a business which J&J sold back in 2018 to the private equity firm Platinum Equity for $2.1 billion), OneTouch business opted to effectively stop support of the old OneTouch Ultra system because it started being used by rivals who drastically undercut them on prices for strips. In a back-to-back comparison, they were nearly identical results (and there's no guarantees that OneTouch's were more accurate than Unistrip's were). If you're like me, the old inventory was already in my possession. So going "old-school" was a very viable and wise decision, especially since I already had that inventory in my possession and it was still perfectly valid. That bought me 3 months of testing supplies while I piggy-banked the brand new stuff for use at a later date.

It's The Rebates, Stupid!

I have grown tired of the games being used to secure preferred formulary placement. Pharma, or medical device companies, are essentially bribing insurance companies with undisclosed, secret and un-auditable "rebates". Back in the 1990's, the healthcare insurance industry lobbied the Financial Accounting Standards Board (FASB) for an exemption to net cost accounting standards ordinarily used in keeping financial records. That enables the insurance companies like United Healthcare, Anthem, Cigna, Aetna and others to collect millions in Rx "rebates" to use as they wish. As it turns out, most insurance companies do not keep the rebate dollars for themselves. Instead, they give the rebates to employers who buy insurance plans from them as "premium offsets". Employers are happy to take any discount off runaway premiums they can get. They generally do not ponder where the money actually comes from.

Most of the dollars associated with that excessive waste come from patients with chronic illnesses who use very heavily-rebated prescription drugs and medical devices (insulin happens to be one of the most heavily-rebated drugs in existence). That's why former FDA Chief Dr. Scott Gottlieb, at a March 7, 2018 conference organized by the National Health Policy Conference of AHIP (which is a lobbyist group for the health insurance industry), made national headlines when he essentially told the group that they were doing it [insurance] wrong.

Former FDA Chief Dr. Scott Gottlieb told the audience (see for more):

"Sick people aren't supposed to be subsidizing the healthy. That's exactly the opposite of what most people thought they were buying when they bought into the notion of having insurance."

Because the rebating system is opaque, and because of consolidation among PBM's (now wholly-owned business units of the largest insurance companies, with the exception of CVS Health, which acquired an insurance company of its own: Aetna) and insurers who have steadily consolidated into a few, nationwide giants. He said that rebate system can result in ever-higher drug prices and everyone from drugmakers to the middlemen to insurers are all taking a slice of the pie.

Moreover, he posited, there’s a "perverse incentive" to spread the benefit of those rebates across plan members, rather than applying them directly to lower the costs of drugs for the sickest patients — thus, it is a system where the sick actually subsidize the healthy.

Gottlieb said "Patients shouldn’t face exorbitant out-of-pocket costs, and pay money where the primary purpose is to help subsidize rebates paid to a long list of supply chain intermediaries, or is used to buy down the premium costs for everyone else."

He continued: "Is a patient really in a position to make an economically based decision? Is the co-pay going to discourage overutilization? Is someone in this situation voluntarily seeking chemo?" (or, for that matter, diabetes, which is treated with the most heavily-rebated drugs in existence).

The answer, of course, is no. "Yet the big co-pay or rebate on the costly drug can help offset insurers' payments to the pharmacy, and reduce average insurance premiums," Gottlieb said.

"Too many benefit plans operate like reverse insurance," Adam Fein, CEO of Drug Channel Institute, wrote in an email to CNBC. He added that "The sickest people taking medicines for chronic illnesses generate the majority of manufacturer rebate payments. These funds are then used to subsidize the premiums for healthier plan members."

He's right about that. And yet, no efforts to change the messed up system have (so far) been successfully implemented. Early efforts by the Trump Administration all failed. Congress has also largely ignored the secretive rebate system that pushes the prices of Rx drugs in the U.S. steadily upward. The best short-term outcome is one I mentioned in my previous post: price caps.

Many people mistakenly blame pharma. To be sure, pharma companies invented rebates and have worked tirelessly to preserve that system, so they certainly share blame for it. But along the way, pharmacy benefits managers (PBM's) and insurance companies merged relentlessly and are now as big as pharma. They also OWN the largest PBM's, too.

The logical question  that no one is willing to answer is "Where the hell is all that Rx rebate money going?"

Adam Fein himself offers some answers with proof. Most of the money is going to employers. On March 12, 2019, he cited data from the Pharmacy Benefit Management Institute's (PBMI). The data in their reporting (see Adam Fein's post at for more details) suggest that employers, also known as "plan sponsors" are the party receiving most of the Rx rebate dollars. If they aren't passing them on to you, odds are that your employer is receiving the Rx rebate money collected by pharmacy benefit managers. Note that the PBMI surveys cited collect data from employers, not PBM's. However, he does note that employers' rebate agreements with PBM's vary widely.

But PBMI's data shows that more and more employers are receiving 100% of the rebates negotiated by their PBM. For larger employers in 2018, 100% rebate pass-through was the most common rebate arrangement. Both figures had increased significantly since 2014. For 2018, smaller employers were slightly less likely to receive 100% of the rebates for traditional and specialty drugs. This approach was still the most common arrangement for traditional drugs and for larger employers regarding specialty drugs.

But Fein observes that larger employers were more likely to receive guaranteed minimum payments with 100% rebate pass-through. Among the employers that received 100% of rebates, 59% of larger employers had a guaranteed minimum rebate amount for traditional drugs and 47% did for specialty drugs. Only 49% of smaller employers had a guaranteed minimum rebate amount for traditional drugs and only 16% did for specialty drugs.

Employer Size Isn't As Important As It Once Was

One other thing is critically important to note here. Large vs. small employers is increasingly less relevant. The reason is because most smaller employers, rather than using a broker to secure insurance benefits for themselves only, are increasingly likely to abandon that in favor of a Professional Employer Organization (PEO) rather than buying benfits directly from insurance companies using a broker. Not all do, but an ever-growing percentage do. We can expect that trend to continue for simple economic reasons.

Last year, the largest PEO was ADP Totalsource. ADP Totalsource is the official employer of record for more Americans than any American company other than Walmart Stores, Inc. (I once worked for a company that used a PEO, and the PEO they used was acquired by ADP, at which point, the company ended the relationship and hired a different PEO instead). By virtue of being so large, PEO's can negotiate lower insurance premiums than all but the largest employers of the past. Think of companies like General Motors. ADP is bigger than they are based upon number of employees. And, a tiny business consisting of less than 10 employees can theoretically hire ADP Totalsource to manage payroll, tax disclosures, benefits, unemployment claims, etc.

That's a market solution to an issue that once put small businesses at a disadvantage to large ones when it came to buying benefits like healthcare insurance.

The U.S. has a major problem with prescription drug and medical device rebates which lawmakers are going to have to fix if U.S. prescription drug prices are to come back down to earth. The good news is that lawmakers seem to be increasingly aware of a big part of the problem, which are the invisible "middlemen" in between the manufacturer and the patient. I blame insurance companies most for the problem. They are taking the money, giving it to companies who buy their insurance plans, while allowing patients to be charged artifically-inflated prices. They are most responsible (not solely, but they bear a larger responsibility) than most are willing or competent enough to acknowledge.

In the end, my trip going old-school on testing supplies was surprisingly cost-effective, and I would encourage others to consider similar actions if they are struggling to manage costs.

Author P.S.

Since I was home for more than 3 months, something else I did in my "old-school" experience was used up my old (nasty) glucose tablets rather than using up preferable (and more costly) Glucose Liquids (called Glucose Shots at Walmart stores and several other retailers). While CVS and others now offer what they call "soft" glucose tablets, gummies and gels which were not available in the past, I had an inventory of the old-school tablets which you'd break your molars on if they did not rot them with cavities first, and I decided to try to use old-school ingenuity to use those too. Guess what? I found that by soaking them in very hot (not boiling) tap water for about 45 minutes until they haven't quite liquidated yet are clearly softening. Then, drain the water without out removing the tablets from the container (such as by holding your hand over them in the kitchen sink). I used flat containers designed for olive oil meant for dipping bread in, but a bowl will work similarly; only add enough water to cover the tablets. You may even leave a tiny bit of residual water in the dish, and just let the moistened tablets to sit for another day or two until the water is completely evaporated and the tablets have started to harden once again.  I ended up making my old tablets usable again without destroying my teeth. Anyone who argues they require precise measures probably won't like it, but I wasn't concerned if a tiny bit of sugar disappeared. But when you need a tablet (or three), they will be soft and dissolve in your mouth without even having to chew them. Try it. Its yet another way to bring old products back into utility.

Monday, February 17, 2020

States Aren't Waiting for DC to Regulate Insulin Prices, They're Doing It Themselves

Back in March 2018, I co-authored (along with Scott King, the former editor of Diabetes Health magazine) an article (catch the article at for reference) about some patient advocacy wins and challenges ahead. One of the challenges ahead was about runaway insulin prices.

We started to see action on runaway insulin prices in state capitals happen a few years ago.

Nevada got an early start in 2017, introducing a transparency bill that requires drugmakers who made insulin specifically to report pricing, costs, and rebates. It was signed into law by the state's Republican governor. The go-to industry response was to sue Nevada in Court. But when two lawsuits from PhRMA and BIO were both thrown out of court because the industry failed to demonstrate they would suffer financial harm from complying with the law, it went into effect. Nevada's price-transparency law irritated the hell out of the pharmaceutical industry, but they lost in Court (see for detail) and as non-compliance fees started growing, they were forced to comply, albeit reluctantly. But the Nevada law did not do much to impact runaway prices, but it did enable Nevada lawmakers to better understand the problem.

Colorado acted in May 2019, implementing a cap on co-payments of the lifesaving medication at $100 a month for insured patients, regardless of the supply they require (see for more). The law aimed to shield patients from dramatic insulin price increases seen in recent years. Under the Colorado law, insurance companies must cap co-payments for insulin at $100 a month for insured patients, regardless of the supply they require. The Colorado law has since inspired many other states to do the same. Insurance companies will have to absorb the balance. In reality, the money really belongs to patients, as insulin generates the cash rebates which insurance companies fail to pass-on to patients, and instead charge them an artificially-inflated price for insulin. Most insurance companies pass that cash on to employers, who happily accept any discount off growing premiums without considering that the source is patients with chronic diseases like diabetes.

Former commissioner of the FDA Scott Gottlieb made big headlines at a conference on March 6, 2018 which was organized by the National Health Policy Conference of AHIP, which is a health insurance industry trade organization. Gottlieb delivered a startling message to the group when he told them:

"You're doing it wrong. Sick people aren't supposed to be subsidizing the healthy. That's exactly the opposite of what most people thought they were buying when they bought into the notion of having insurance." Dr. Gottlieb told the group. 

See for more information on Dr. Gottlieb's now-infamous speech.

As the Nevada experience shows, transparency, will not (by itself) fix problems with sky-high prices for healthcare including prescription drugs like insulin. It is but one part of a much larger problem which is a complete lack of transparency behind the costs of U.S. healthcare in every sector. Those costs are hidden, and kept hidden from the public. In order to fix the problem, you still need an audit trail, and forensic accountants can then "follow the money" to determine which parties are most responsible for the problem. Today, we don't have a tremendous amount of solid evidence, although all of the signs seem to point to healthcare insurance companies as the party most responsible for runaway insulin prices, not pharma. That means we still need price transparency, although we cannot expect that alone will bring insulin prices down.

For the record, a man named Avik Roy recently opined on this matter. He is a conservative health policy advisor whom I respect tremendously, even if I don't always agree with his views. Roy went to MIT to study molecular biology as an undergrad, and later attended the Yale School of Medicine. He was active politically at Yale, where he served as the chairman for the Conservative Party of the Yale Political Union. Mr. Roy was originally an investment analyst for several Wall Street investment banks (including both Bain Capital and J.P. Morgan), although he later worked on health care policy for Mitt Romney and Rick Perry to name a few of his former clients.

While I don't automatically agree with conservative solutions, I would remind people that Obamacare itself was based upon an idea hatched at the Conservative Heritage Foundation in a paper written by Stuart M. Butler and first published in 1992 (see a scanned copy of the original Heritage Foundation paper at for details). For the record, although Democrats implemented it, the Heritage Foundation now denies ever having created the idea, even though there is documented evidence that it did so. But its proof that conservative (not libertarian) plans can potentially work if entities with vested interests which they wish to protect are not actually authoring the proposed "solutions"  because they always tend to write-in things which will benefit them, which causes failure.

Anyway, Avik Roy's expertise is in healthcare policy. While there can be legitimate disagreement with him on his ideas for policy solutions, his assessment of the state of U.S. healthcare is usually rooted in fact, not fiction, and for that reason, I respect him. Where I occasionally disagree with him are his ideas for fixing what is wrong with healthcare in the U.S. (although I would mention that I don't always disagree with his ideas).

Still, not long ago, he Tweeted something I thought was worth sharing (actually, it was in 3 successive Tweets). To simplify, the full text is below, although a link to the thread of those Tweets can be found at

If a mobster says, "give me $100,000 or I'll kill your daughter," it doesn't matter that he's offering price transparency. He's still committing extortion.

I Tweet this because I'm hearing an increasing number of Republicans tout price transparency as the solution to all our health care problems. Transparency is necessary, but it's far from sufficient.

Tackling the problem of monopoly power is just as important, if not more so, relative to price transparency. Otherwise "price transparency" becomes the new GOP health care punt, replacing "buy health insurance across state lines."

Anyway, back to my Diabetes Health article in 2018. One of the takeaways mentioned as in the last paragraph of the article was as follows:

"My recommendation on insulin prices is to continue letting your Federal and State lawmakers know how big of a problem runaway prices on medicines including insulin are for you personally.  The more they hear about the issue, the more likely they are to address it. Persist and continue calling your elected officials regularly on the issue – it's not too much to write to them once per week on the subject until they do something."

I am very pleased to see that nearly two years later, we are starting to see signs of that recommendation in action. In the past month, we are starting to see an explosion of STATE legislation on insulin prices happening. Almost all of the action is currently taking place in state capitals around the country, plus it's happening in purple, red and blue states alike.

Let's look at what's going on with insulin pricing in a number of states nationwide:

On January 24, 2020, Illinois Governor J.B. Pritzker signed a law capping monthly insulin costs at $100 for people covered by state-regulated commercial health insurance plans in that state (see news "Illinois law caps insulin patient costs at $100 monthly" at for more). The Illinois legislation is the first of several proposals to actually become law.

On February 4, 2020, the Virginia House of Delegates passed a bill that would prohibit insurance companies from charging more than a $30 co-pay for a 30-day supply of insulin in the state, although it's not law yet. (see for more).

Similarly, on the same day as Virginia moved a bill forward on insulin prices, a bipartisan bill was introduced in the neighboring Tennessee House which would set a price cap on the cost patients pay for insulin at $100 for a 30-day supply (see for more).

On February 13, 2020, a bipartisan group of Connecticut lawmakers introduced legislation that would cap the monthly cost of insulin at $50. The bill would also limit the price of other insulin-related supplies, such as syringes, pumps and blood sugar meters, to $100 a month (see more at The Connecticut bill may not pass in its current form, since it introduces a tax on insulin levied on the insulin manufacturers which is seen as giving with one hand, and taking away with the other hand, even while the costs are usually always passed on to consumers in the end.

A Utah state lawmaker named Rep. Norman Thurston is reportedly also looking to make insulin more affordable for Utahns, by sponsoring a bill called HB 207,which would cap co-pays for insulin at $30 for a month's supply in Utah (see for more).

The Associated Press reported on April 7, 2020: Utah Governor Gary Herbert signed into law the aforementioned legislation capping monthly copayments for insulin at $30 for a 30-day supply. The law was approved by the full Utah legislature just a day earlier, and it also includes an emergency refill provision that will allow people without an up-to-date prescription to get insulin immediately rather than waiting until they are able to get a refill authorized by a physician, as well as a provision directing the Utah Department of Insurance to issue a report that includes a summary of insulin pricing practices. The new law takes effect on starting January 1, 2021.

New Mexico:
New Mexico lawmakers bill capping what New Mexicans with diabetes spend on life-saving insulin received final legislative approval with a 40-1 vote in the Senate. Like the state of Washington in the north, New Mexico shares an international border with the country of Mexico, and some citizens are crossing the boarder to buy less costly insulin in pharmacies along the border. New Mexico's bill would cap prices at $25 for a 30 day supply of insulin. New Mexico Governor Michelle Lujan Grisham has expressed her intention to sign such legislation into law once passed. She said the overwhelming bipartisan support this bill received in both chambers is a resounding testament to New Mexico's commitment to reducing health care costs. (see for details)

In Oregon, state Rep. Sheri Schouten (D) of Beaverton acknowledged to the local press that she is working on a bill called HB 4073 that would cap the out-of-pocket insulin expenses for privately-insured Oregonians at $100 for a 30-day supply. The bill is currently still in committee, and therefore may see changes before it goes to the Oregon legislature for a vote. (see for more detail).

Washington (state):
Separately, in the State of Washington, a Senator in the state legislature named Karen Keiser has introduced a bill called SB 6087, in which health plans issued or renewed in the State of Washington on or after January 1, 2021 must cap insulin co-payments, deductibles, and other forms of cost-sharing at $100 per 30-day supply. The bill also requires the state health care regulatory authority to monitor wholesale acquisition costs (list prices) of insulin products in Washington. (see for more). Since then, there has been news that Washington will also consider legislation to legally enable state residents to legally cross the state's northern border into British Columbia, Canada to buy prescription drugs such as insulin. Many state residents are already doing so, but the legislation would legalize the practice in Washington (see for details)

Kentucky is yet another state now looking to cap the prices patients are asked to pay for insulin. (see for more). The Kentucky bill only applies to cost sharing for insured people, but could do something similar to laws in Colorado and Illinois.

West Virginia:
We also recently saw the state of  West Virginia move to cap the cost of a 30-day supply of insulin at $25. The state House Judiciary Committee approved legislation being called HB 4543, sending the measure to the full chamber for consideration next. (see for more).

This is a rapidly-evolving space, but just since I posted this, additional states have put legislation to cap insulin prices in consideration, Ohio among them. There are also rumors that Maine will act very soon, too.

There are no fewer than five U.S. other states believed to be in various stages of pursuing legislation on insulin prices. What the bills look like and whether they become laws remains to be seen. So far, only Illinois has passed a law on it (in addition to Colorado and Nevada); other states do have bills being drafted. considered by various committees, and must still be voted on by their legislatures before being signed into law by state governors. But for the pharmaceutical industry, dealing with more than 50 state laws (including D.C. and Puerto Rico) is the worst of all possible outcomes.

In 2017, Lars Fruergaard Jørgensen, chief executive of Novo Nordisk A/S warned investors about state legislation on insulin prices, claiming they might be "difficult" for his company to do business in the U.S., which generates more than 60% of its profits even though the U.S. accounts for less than 40% of its customers. He told Reuters (see for the original article):

"Trump has repeated a number of times that he believes the industry gets away with murder, obviously we don't agree."

But at the state level, more and more legislation was being prepared to increase clarity around prices, he said.

"If the transparency bills lead to a disclosure level that is too excessive, it becomes difficult to do business, for instance, if we have to publicly share what is in our contracts," Jørgensen said.

But as I suggested in the concluding paragraph of my Diabetes Health article, state laws can have a direct impact on what you pay for diabetes supplies, including insulin, so I encourage you to contact your lawmakers (both Federal and state) and share your stories about runaway insulin prices and how you are impacted.

As we can see, legislation is percolating in state capitals across the U.S. More importantly, they are being proposed by both Republican and Democratic lawmakers, and like the Nevada law which was signed into law by a Republican governor, the odds of passage increase with bipartisan support.

So, while dysfunction and giving PhRMA everything it wants (which is to make NO change to the way things happen today) seems to be all lawmakers in Washington, D.C. can do, the states are definitely doing things on insulin prices.

We can expect more and more states across the country to make similar moves because the problem is basically being ignored in Washington, D.C. Although the House has passed legislation, it will likely never be voted on in the Senate. Indeed, McConnell told Politico: "Socialist price controls will do a lot of left-wing damage to the health care system. And of course we're not going to be calling up a bill like that."

A bipartisan Senate bill introduced by Senate Finance Chairman Chuck Grassley (R-IA) which would make changes to Medicare by adding an out-of-pocket maximum for beneficiaries and capping drug price increases at the rate of inflation, among other measures. Private insurance often follows what Medicare does in terms of policy matters.

Sen. Grassley has openly warned the Senate Majority Leader Mitch McConnell, who has been derisively nicknamed by many as "Moscow Mitch" McConnell, that his bi-partisan legislation which he co-authored with Sen. Ron Wyden (D-OR) is necessary to help Republicans keep control of the Senate in the 2020 elections. He also warned that if the Senate fails to act on prescription drug prices, that failure to act could harm the vulnerable Republicans who are running for re-election in 2020.

"There's a great deal of disgust with the rapidly increasing price of drugs, and every Republican up for election's going to have to have a place to land," Grassley told reporters in September 2019.

"And this is the place to land, because they're surely not going to land with what Pelosi's [doing]," he continued. "If McConnell wants to keep the Republican majority, then this drug pricing bill is part of that plan."

Yet when when he was asked by reporters during a briefing why more Senate Republicans had not supported his legislation, Sen. Grassley was very candid, saying it was because Sen. Majority Leader Mitch McConnell had "asked them not to".

Grassley and McConnell at Odds Over Insulin Prices

Sens. Grassley and McConnell have reportedly been at odds over the bipartisan measure, which actually has support from President Donald Trump and also many Senate Democrats.  The reasons are varied. He doesn't see it as particularly important, although voters may think otherwise.

Plus, we also know that from July 1 to Sept. 30, 2019, Mitch McConnell’s joint fundraising committee and campaign committee received contributions directly from several pharmaceutical industry PACs during the quarter 2019, including from the Biotechnology Innovation Organization ($1,000). That effort raised a total $195,300 from executives and PACs of pharmaceutical companies, according to third-quarter Federal Election Commission filings reviewed by Sludge. For example, we know that Sanofi contributed $15,600 directly to Mitch McConnell's joint fundraising committee in the third quarter 2019, while Novo Nordisk Executive Vice President Doug Langa personally donated $10,000 to Mitch McConnell's Senate committee. In addition, a total of $63,000 from pharmaceutical interests, all from individuals affiliated directly with Eli Lilly & Co. (meaning they were likely made by donors employed by Lilly) were reported

"Big Pharma has outsize influence in D.C., and as a direct result of the rigged drug pricing system manufactured by this influence, patients across America are rationing medication, going without food, going bankrupt and dying because they can’t afford prescription drugs," Juliana Keeping, communications director at Patients for Affordable Drugs, told Sludge. "That's why we're urging lawmakers on both sides of the aisle to pass reforms with the sense of urgency patients deserve."

On February 14, 2020, Sen. Grassley told Politico (see for more) that he had made some changes to his drug plan, S 2543 (116), in a bid to win over more Senate Republicans — but he says he wouldn't reveal the tweaks until a CBO score of the revised bill was ready, most likely in a few weeks. He told reporters that he believes it will require 25 Republican co-sponsors of his bill in order to persuade Senate Majority Leader Mitch McConnell comfortable with even bringing up the plan. But he added that's on him, not McConnell.

"[McConnell's] got some legitimate concerns about divisions within the [Republican] caucus. As I told him before Christmas, it's my job to take care of those concerns. We're in the process of it by working one-on-one to get more co-sponsors," Grassley said. He added that he's keeping the details very close-to-the-vest over concerns the media might distort whatever he says and make his sales job more difficult. Sen. Grassley wouldn't say exactly how many co-sponsors he already has, although 11 Republicans endorsed his bill either when it first came up in the Finance panel or via public statements. He crafted the bi-partisan plan with Finance ranking member Ron Wyden (D-OR).

In the meantime, Mitch McConnell himself is now facing a very well-financed Senate challenger in 2020, something he has seldom faced in past re-elections. This year, he's being challenged by Democrat Amy McGrath who is running a very well-capitalized and well-organized campaign for the role of Senator representing Kentucky, and polls put the former Marine pilot nearly equal to McConnell in terms of expressed voter intent as we head into the 2020 election. She has personally visited nearly every tiny town in Kentucky to share her message, something McConnell has not done and likely will not be doing. That means McConnell is relying on expensive television advertising, much of it paid for by dark-money SuperPAC's partially-funded by donations from the pharmaceutical industry.

Big Insulin Bankrolls Mitch McConnell to Ensure Nothing Happens

For example, from July 1 to Sept. 30, 2019, Mitch McConnell’s joint fundraising committee and campaign committee received contributions directly from several pharmaceutical industry PACs during the quarter 2019, including from the Biotechnology Innovation Organization ($1,000). That effort also raised a total $195,300 from executives and PACs of pharmaceutical companies, according to third-quarter Federal Election Commission filings reviewed by Sludge.

We know that Sanofi contributed $15,600 directly to Mitch McConnell's joint fundraising committee in the third quarter 2019, while Novo Nordisk Executive Vice President Doug Langa personally chipped in $10,000 to McConnell's Senate committee.

"Big Pharma has outsize influence in D.C., and as a direct result of the rigged drug pricing system manufactured by this influence, patients across America are rationing medication, going without food, going bankrupt and dying because they can’t afford prescription drugs," Juliana Keeping, communications director at Patients for Affordable Drugs, told Sludge. "That's why we're urging lawmakers on both sides of the aisle to pass reforms with the sense of urgency patients deserve."

As might be expected, McConnell is completely dismissive of his challenger. But Amy McGrath has touted many of the same issues — health care and good-paying jobs — that now-Governor Andy Beshear highlighted in ousting Republican incumbent Matt Bevin in last year's election for governor.

"Kentuckians know that his job is more than just bringing a check to Kentucky," she said. "Where is his leadership on saving health care? Where is he at with the rising cost of prescription drugs? Why hasn't he done anything to stop the trade war that's hurting farmers and businesses in Kentucky? Where's he at with raising the minimum wage? It's nice that he's getting money for Kentucky, but the rest of the job is so important," she added. "And it's actually bigger and broader and he's failing at all of these other things."

On runaway insulin prices, as Kentucky Rep. Steve Sheldon (R) Bowling Green put it: "As far as the answer to who's going to absorb this [cost], these insulin prices are so inflated, there's so many people with their hands in the cookie jar."