Sunday, March 17, 2024

Will Americans Get PBM Reform in 2024? Maybe, But Many Things Need to Happen In Order to Get There. On the Upside: Insulin Has Opted Out of PBM Sales.

At the core of this post is a YouTube video which can be viewed in the middle of this blog post. 

The subject is about whether we'll get much-needed legislation passed into law to reform corrupt Pharmacy Benefit Managers (PBMs) which we know with absolute certainty were at fault for runaway insulin prices. At least that was true until March 2023, when the three largest insulin manufacturers, starting with Lilly, followed by Novo Nordisk and shortly thereafter, Sanofi all announced major insulin list price reductions in the range of 70% to 78%. 

Think about that for a second: Imagine being able to instantly slash prices by 75% and suffer zero impact to the bottom line? The reason was because we were paying for bribes or kickbacks. Admittedly, they were "legally-exempted" kickbacks, but a bribe is still a bribe and patients were stuck paying for that. Until a few things changed that dynamic.

The reason Lilly, Novo Nordisk and Sanofi were all able to cut insulin prices by 75% was by disintermediating the PBMs from insulin sales (in other words, cutting the PBMs out of the transaction), and voila an instant 75% discount can happen with no financial impact for the insulin manufacturers. The losers were the insurance company owned PBMs which had been stealing money the manufacturers paid to PBMs in order to reduce patient insulin prices. Instead, the pharmaceutical industry accomplished massive price-reductions by cutting PBMs including United Healthcare's OptumRx, Cigna's Express Scripts and Aetna/CVS Health's Caremark PBM unit out of the transactions. Don't worry about the PBMs. They have already moved on to collecting rebate kickbacks on CGM sensors instead, although manufacturer coupons can help patients combat that nonsense.

The huge price cuts cost pharma absolutely nothing. 

That was impressive, but it speaks more generally to the real culprit in the U.S. insulin pricing crisis: vertically-integrated (with commercial healthcare insurance companies) Pharmacy Benefit Managers (PBMs). In 2022, I described it as being a giant kickback scheme (admittedly, a legally-exempted kickback scheme, but bribery was still driving runaway insulin prices, and patients were stuck paying for that). Catch my post at for more. The PBMs are under investigation from the Federal Trade Commission (FTC) (see for the news release on the study) which is currently underway which could lead to litigation from the FTC and the U.S. Department of Justice upon its conclusion for illegal commercial bribery and an effort to force big insurance companies to divest their PBM businesses, but we will have to wait to see what happens.

However, I think Dr. Robert Popovian, Erin Delaney, and Dr. Michael Mandel (all of them professors at University of Southern California) wrote an excellent and informative article about how that happened which can be read at if you want to learn more.

But dismantling that dysfunctional PBM dynamic required both smart strategy and a bit of luck, and truthfully, it's still not fully implemented right now, but it is well underway. 

Strategically, I really must tip my hat to JDRF CEO Aaron Kowalski for helping the nonprofit drug company known as Civica, Inc. (via the company's CivicaScript operating unit) which will actually sell the Civica insulin biosimilars once they're FDA approved (FDA is poised to render approval decisions on the Civica/GeneSys Biologics biosimilars of insulin glargine, insulin aspart, and insulin lispro sometime in 2024). In September 2019, Aaron Kowalski (then Chief Mission Officer) was interviewed in in the American Journal of Managed Care ("AJMC) about the JDRF's official position on the topic of insulin pricing legislation (see for the article), and he told AJMC that JDRF's official position was that "action was needed not only by Congress and the executive branch, but also by insulin makers and health plans". 

In fact, it was the health plans which refused to act; they were getting rich from insulin rebates paid to PBMs and wanted to keep collecting those kickbacks while patients paid for it. Until pharma got a little kick in the @$$ from Congress which FORCED them to cut the PBMs out of insulin sales.

We got a bit of luck when Congress passed into law the American Rescue Plan of 2021 (to read more about the Medicaid provisions of that law which had the most notable impact on insulin prices, see for a good summary of the provisions of that legislation; there are links explaining how Medicaid rebates work if you really want to get into the weeds). That little provision capped Medicaid rebates at 100% of the Average Manufacturer Price (AMP). Doctors Robert Popovian, Michael Mandel and Erin Delaney described what the impact of that provision in the article noted above this way:

"Companies with biopharmaceuticals with high list prices and significant rebates (e.g., older brand medicines [which included all insulin products]) may have to pay Medicaid to cover those drugs. Let that sink in; companies will have to pay Medicaid instead of getting paid by Medicaid for having their medicine on the list of covered medications. The only remedy for such companies is to lower their prices drastically to avoid negative pricing consequences."

That forced insulin makers to cut their prices by making the decision to quit paying legally-exempted rebate kickbacks to the PBMs by cutting them out of the transaction. If they didn't, Lilly, Novo Nordisk and Sanofi would suddenly be forced to actually PAY Medicaid instead of being paid by Medicaid for their old but heavily-rebated insulin products.

Beyond that, one JDRF policy also played an critical role. The JDRF organization did help to bankroll Civica's development of biosimilar insulin glargine, aspart and lispro because as a nonprofit company, Civica is unable to raise money by selling stock or issuing bonds for debt as for-profit companies are able to do, hence the JDRF financial support was critical in helping the company to bring biosimilars of the three bestselling insulins to market (see the press release entitled "Civica to Manufacture and Distribute Affordable Insulin" at and a concurrent press release from JDRF which revealed specifics on the prices for Civica insulins at at on the Civica insulin announcement). 

Civica announced it would sell its biosimilars of glargine, aspart and lispro for a low, fixed price of $30/vial or $55 for a box of five prefilled insulin pens. No coupons or other convoluted discounting required. Civica proceeded to sign licensing and supply arrangements with Yposomed AG for that company's disposable UnoPen insulin pen (see for details). 

As I write this as of March 2024, Civica's plan to sell three biosimilars of the three bestselling insulin analogues as of 2022 was still pending. Beyond that, Civica also quickly signed deals with a major drug wholesaler known as Cencora (perhaps better known by its former name of AmerisourceBergen). See the press release at and another about AmerisourceBergen's name-change to Cencora at for more). Civica also signed deals with a few Pharmacy Benefit Managers (PBMs) which do not engage in rebate aggregation or "spread pricing" on prescriptions, signing deals with both Navitus Health Solutions (Navitus is co-owned by Costco, which means Costco Pharmacy is one retailer which is likely to carry Civica insulins when they come to market) and also EmsanaRx which shortly after changed its name to AffirmedRx PBC just months later. 

Collectively, the JDRF/Civica insulin deal also helped to dismantle the PBM rebate-contracting sales model (at least for insulin) promoted by the big three PBMs (United Healthcare's OptumRx, Cigna's Express Scripts, and Aetna/CVS Caremark) for patent-expired insulins responsible for unaffordable insulin in the U.S. In fact, the Civica move arguably impacted the entire insulin therapeutic class of drugs, which was Civica's objective all along. Civica told everyone that its aim was for "market impact, not market share". 

That means that when biosimilars come to market (forecast to happen later in 2024), the prices will have to be less than Civica insulins sell for and certainly less than Lilly, Novo Nordisk or Sanofi are charging. That set a low price ceiling for biosimilar insulins that can be sold for. It enables patients to effectively tell their insurance companies "Screw you guys; I don't have to pay artificially inflated insulin prices for your preferred insulin brand, I'll just get Civica insulins instead." Incidentally, California's much talked about CalRx insulin program ultimately selected Civica as its insulin supplier.

And we have a bunch of insulin biosimilars pending FDA approval decisions from such companies as Sandoz, Lannett Company, Amphastar Pharmaceuticals, Civica and a few years later, more are expected from Meitheal Pharmaceuticals, I'll just say that PBM reform from Congress is still badly needed, and now at least seems to have bipartisan support, but in this Congress, its unwise to make any predictions.

On March 6, 2024, the Washington, DC publication known as "The Hill" ran an event discussing the prospect for PBM reforms. The article link can be seen at while the core of it was a video dialogue.

The YouTube recording of that dialogue about the prospect for PBM legislative reform in 2024 can be seen below, or at 


One other point: in the introductory dialogue of the video, the host Bob Cusack who's the Editor-in-Chief for The Hill, and he speaks with Rep. Jake Auchincloss (D-MA) who is a co-sponsor for a bill called "Delinking Revenue from Unfair Gouging (DRUG) Act". The bill has not become law. However, more interestingly, Jake Auchincloss happens to mention a bit about his personal background, and he mentions something he says about 6 minutes into the intro, he says:

"The quality of the science is more exciting right now than its ever been. Everyone talks about AI and the potency of AI to transform our world, I actually think relative to AI, CRISPR (which FYI, is the acronym for 'clustered regularly interspaced short palindromic repeats' which is a technology that research scientists are able to use to selectively modify the DNA of living organisms) and he says "CRISPR and gene editing and our ability to turn biology into an engineerable discipline is more exciting as a general purpose technology than AI is".

With that particular quote, I instantly thought of fellow T1D peer Riva Greenberg's recent article "Why 'Controlling' Blood Sugar Shouldn't Be the Goal", in which she notes the word control itself stems from the industrial and scientific revolutions, and the idea of machine efficiency was brought into medicine. The human body came to be viewed as a machine, and while that can be useful for acute care, it fails miserably for chronic care, as is the case for managing diabetes. 

Riva says: "But machine thinking seeped into diabetes care with control-like, statistical formulas: insulin-to-carb ratio, insulin-on-board, pump algorithms, and carb-counting. Don't get me wrong: these are enormously helpful, but they don't turn us into machines."

Anyway, I think we can discount an elected Representative from Massachusetts view on that as a side-note, but he does have something to say about Pharmacy Benefit Manager (PBM) reform. PBM reform has emerged as a rare bipartisan priority in a divided Congress, as both Republicans and Democrats have advanced a myriad of bills that would begin to address PBMs, their lack of transparency, and misalignment of the market. 

An upside seems to be that lawmakers in both parties seem to agree on PBM legislation is sorely needed. Whether anything is passed into law remains to be seen, but the good news is that for insulin, that will soon be unaffected by PBM profiteering because of the American Rescue Plan of 2021 as well as the Civica biosimilar insulin announcement, which both forced Lilly, Novo Nordisk and Sanofi to simply opt-out of the legally-exempted rebate kickback sales model. Patients are starting to see the benefit of that now and will see it into the future.

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