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 https://www.diabeteshealth.com/good-bad-diabetes-advocacy-world/ 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 https://thenevadaindependent.com/article/big-pharma-abandons-lawsuit-over-nevadas-insulin-pricing-transparency-law-after-state-approves-trade-secret-protection-regulations 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 https://www.npr.org/2019/05/24/726817332/colorado-caps-insulin-co-pays-at-100-for-insured-residents 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 https://www.cnbc.com/2018/03/07/fda-commissioner-to-health-insurers-youre-doing-it-wrong.html 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 https://healthcarereform.procon.org/sourcefiles/1992_heritage_consumer_choice_health_plan.pdf 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 https://twitter.com/Avik/status/1219651211911204866?s=20

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:

Illinois:
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 https://apnews.com/06e5feda1ce604bd70df67ce00e6d7f4 for more). The Illinois legislation is the first of several proposals to actually become law.

Virginia:
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  https://www.wric.com/news/politics/capitol-connection/bill-to-cap-insulin-insurance-co-pays-at-30-passes-in-virginia-house/ for more).

Tennessee:
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 https://www.newschannel5.com/news/tennessee-bill-would-set-price-cap-on-insulin-for-30-day-supply for more).

Connecticut:
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  https://www.middletownpress.com/news/article/Bipartisan-bill-would-cap-insulin-costs-in-15054371.php). 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.

Utah:
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 https://www.sltrib.com/news/2020/01/29/utah-bill-would-require/ for more).

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 https://www.krwg.org/post/bill-capping-new-mexico-insulin-prices-approved-new-mexico-legislature for details)

Oregon:
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 https://ktvz.com/news/oregon-northwest/2020/01/29/oregon-lawmakers-bill-targets-soaring-insulin-prices/ 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  https://www.king5.com/article/news/health/washington-proposed-insulin-price-cap/281-a832e196-660c-4475-b53d-3abe9b7a1764 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 https://www.peninsuladailynews.com/news/where-bills-stand-in-state-legislature/ for details)

Kentucky:
Kentucky is yet another state now looking to cap the prices patients are asked to pay for insulin. (see https://www.wlky.com/article/bill-to-limit-cost-of-insulin-moves-forward-in-frankfort/30918022 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 https://www.wsaz.com/content/news/West-Virginia-lawmakers-introduce-legislation-to-cap-insulin-co-pays-567147491.html 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 https://www.reuters.com/article/us-novo-nordisk-results/drugmaker-novo-nordisk-warns-of-u-s-legislation-cautious-on-2018-idUSKBN1D1428 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 https://politi.co/2OUVd3d 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 https://amymcgrath.com/ 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."

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