Yesterday Governor Polis signed into law a bill that capped insulin price copays to $100/month (no matter how much insulin is required). Here is a link to a local news report about the new law:
The law takes effect on all private insurance policies issued/renewed for people in Colorado on or after 1/1/2020. What is not yet clear to me is if this law also applies to Medicare Advantage plans and Medicare prescription drug plans. My understanding is that VA health care already has lower copays on insulin.
Had the midterm election gone differently last fall I am sure this would have never happened. Hopefully similar progress can be made elsewhere … For now I am just happy to be here in Colorado.
Thanks for writing about this. Let’s hope this wave of insulin pricing reform is just starting to gain traction. I think a persuasive economic case can be made to enable insulin purchases with zero out-of-pocket expense. Big-Pharma hyper-greed damages society.
Big Pharma is greedy, don’t get me wrong here. But someone will be paying for that insulin. Say the cost of one vial is $600 now and it used to be $80, there is no excuse as to why it went to that price. I am glad they are starting to try to control the ridiculousness of the increases.
But the $80 still has to be paid by someone and a business is a business to make money and has a right to some kind of profit, just not what they are charging now. So that cost has to be paid for by someone if you want that insulin to exist and still be manufactured. Because why bother to even produce it with no profit at all? And don’t look at the government, it’s a cost to them too and that money would have to come from taxpayers.
In other words zero out of pocket can’t exist for everyone, the money has to come from somewhere, it won’t be magically free to manufacture. Unless you want to raise taxes to cover it for everyone and I still pay taxes and don’t want any more tax increases!!!
The other problem is we all like our particular insulins, one way insurance companies control the cost is going with the company that supplies the cheapest one, then the next year the other company bargains to be the supplier. This results in a cheaper supply chain. But if we all want to stick to the one that works best for us, this whole usual way of controlling costs doesn’t work. The companies have probably figured this out and are using it to their advantage.
In business, usually greed does not pay because a competitor comes along at a lower price and kills the goose that laid the greedy golden egg, When it comes to Big Pharma, however, the system is rigged and Big Pharma has been able to price fix name brand medications as well as generics which is illegal. This illegal process appears to be in the process of both recognition and being taken care of through various initiatives. I expect drug prices to come down substantially over the next few years unless a blind eye continues to be turned toward the price fixers.
Studies from independent sources show that the actual cost of a vial of analog insulin is less than $5 to manufacture. Here is a link to one article discussing that: Insulin Prices Could Be Much Lower and Drug Makers Would Still Make Healthy Profits
There is a lot of room to make a healthy profit for insulin at something like $25-$50 a vial… (as seems to be the case in other more “developed” countries than the USA ;–))
The $100 monthly limit in the Colorado law is for the “copay” and does not represent the entire cost of the insulin. We should presume that the insurance plan is covering some of the price that is ultimately received by the manufacturer/distributor.
Just a personal aside, speaking for myself, I would gladly pay higher taxes for health care so that I and everyone else could get equal access to services. Studies show that the amount we pay to insurance companies and health care providers in premiums and copays and other out of pocket expenses greatly exceeds the amount we would pay in higher taxes for a single payer system (figured on a per capita basis).
Hopefully this comment won’t start an ideological battle on this thread… (oh - who am I kidding?)
While I see this law as a great forward step I also recognize that it does absolutely nothing for insulin dependent people who have no health insurance. They are not protected against price gouging by pharmacies. Although there is a part of the law that authorizes the state attorney general to investigate the pricing of insulin within the state and this may someday yield indirect relief to those who are uninsured.
The US spends more on health care than twice the comparable country average. We could take that $5100+ USD per person per year and use to to make access to health care better.
Why do some feel compelled to stash millions and millions of dollars into senior management and owners’ pockets? Don’t you think we could reconfigure that economic pie, wring out the excessive pharma profits (not eliminate!), and greatly reduce (or even stop) out-of-pocket costs for things like insulin?
It could be very well that it is $5 a bottle, I just pulled out a figure to make a point that it can’t be free.
No I do not want a government run system and I don’t want to pay more taxes. In UK I’ve run across people that have had to wait 13 years to qualify for a pump. They just announced and are proud of themselves that they will now cover 17% of type ones to get a Libre CGM.
Why do you think Mick Jagger came to the US to get his surgery, because he would have been put on a long list back home. I would rather pay more and have a better system.
Yes, that is what I wish for… based upon a lifetime of experience living with a chronic disease in a society where access to health care is controlled singularly by a motivation for profit and corporate influence on public policy that has stripped any sort of ethics, compassion and moral responsibility from the delivery of health care services.
The Colorado law is another step in the right direction.
It seems to me that it is really just telling the insurance plans to pass along the savings they have negotiated with the manufacturers.
We know from testimony from one of the big 3 insulin makers that PBMs have negotiated discounts of over 70%. So a vial of Humalog, list price $275, is going to cost the plan sponsor no more than $82.50. The problem has been that those with a high deductible aren’t paying $82.50/vial, they’re paying about $275/vial until they meet their deductible. The Colorado law appears to be capping the co-pay to $100/month regardless of the number of vials needed - good job!
I keep wanting Congress to ask both the PBMs/insurers and the manufacturers the following question:
Who should be paying the full, highly unrealistic list price for insulin? Why?
Followed by:
If the answer is “no one should be paying the full, highly unrealistic list price (Which is the answer I would expect from Pharma),” then the question is how can we ensure that no one is paying this outrageous amount?
As a Norwegian living in Canada I have experience from two nations where healthcare costs for the most part are covered through taxes. In most cases people in both countries are content with that system. The thing about taxes is always that it is not about how high the percentage is but what you get back from the government. In Norway all post secondary education is free, they don’t even have a word for tuition fee. Healthcare is also covered except for a small co-pay every time you visit a doctor. (Meant to discourage some serial-hypercondriacs). And not to worry about your retirement everyone is taken care of. Here in BC we pay a modest monthly fee for medicare services, and payment for meds is based on your income. Low income earners pay nothing, high earners might pay 70% of the first $1,000, 30% of the next $1,000 and after that it’s free. And of course if you ever are in need of an ambulance or a visit to emergency residents will never be asked for insurance plans or a credit card as it is all covered.
So that’s how it can work when healthcare costs are covered through taxes.
As always, when laws get passed there are the Rules of Unintended Consequences, so it will be interesting to see how the PBM/Insurance and Pharma industries react in Colorado, and if any federal legislation gets passed that might “override” the state statute.
Interesting indeed. I think every state is gonna hit this from a different angle and see how the cards play out the best. Its like throwing sh!t at the wall and seeing what sticks. People will have varying levels of success, but any system disruption is good system disruption. This sure is gonna take a while, but I suppose we are paving a way forward for everyone. Its like hacking a path through the jungle with a machete. First pass is gonna be ugly and rough. But, the path will get clearer and easier every time someone hacks their way through.
It is soooo interesting to watch!
Maybe in the end, we all move to our own diabetes-friendly state. What should we name it?
My original point was, Insulin just can’t be free, it costs to manufacture and manufactures have to make money to exist and pay peoples salaries, so someone pays for that, whether it’s the person using it or everyone contributing. The big Pharma companies are out of control in the US and I agree with that totally. It was totally we can get away with doing this so we’re going to raise the price while we can and collect all this extra money while we can until it catches up with us. And it’s finally maybe going to catch up to them.
We will all be watching to see if the Colorado law helps!!! Unfortunately so will big Pharma and they will try to undermine any drawbacks it causes, but other states will probably follow so hopefully it works out for all us insulin users. They need to solve the uninsureds cost too even more though, but baby steps!
But regarding Norway or government run healthcare.
The cost still has to come from somewhere and the taxes here are already spent towards other things. It seems you never can take back much on money already designated on other things. We pay out a lot more than other countries in all sorts of things already. Norwegians averaged 42% income tax in 2018, it has been as high as 51% at one point, for that medical coverage to be included. (income tax, national insurance employee part, surtax are paid on income). And on top of that Norway has excise tax, customs tax, and a pretty hefty value added tax. And I believe low income still pays taxes there? Here low income virtually do not pay (in fact can get back some not even paid, or pay very low, except social security if they work. But here the middle class will be the worse hit by any income tax increase. Most of the working middle class already pays for health care through an employer.
Under employer insurance I enjoyed the ability to decide I wanted a CGM and then a pump and my insurance covered it. I enjoyed surgery on my shoulder when I needed it within 3 weeks instead of months or even years, I enjoyed when they thought I was a type 2, not on insulin yet and my test strips were covered. These things are problems in existing government run health care systems. Our system is not perfect by far, but I do not want a government run system.
Note that this law will not apply to ERISA insurance plans, which represent the vast majority of plans nationwide … federal legislation is still needed.
This bill just shifts the cost of expensive copays to the entire insurance pool or (because it shifts the PBM savings to the entire pool) it’s the reverse of today’s cost structure. It does nothing to provide insulin to people who are living close to the poverty line who don’t have ACA subsidies and cannot afford insurance. I’m truly pleased to see CO do something, but it isn’t enough.
What I want to see is federal goverment addressing the pricing structure. I want them to lift the rules that prevent Medicare and Medicaid from negotiation pricing for medications. I want them to look at the retail prices in other industrialized nations and then use that to judge whether or not Americans are being gouged. And regulate pricing accordingly, just like we do with gasoline. We need insulin just like people escaping weather emergencies.
When people talk about taxes raising to pay for national healthcare, it’s important to remember part of that would be offset in theory by not paying for private insurance and they high deductibles we pay.
I have great insurance, I’m in a chronic condition management program that allows all my diabetes basic care requirements (including CGM & pumps) at 100%. We pay a decent portion per month. My husband’s company spends a significantly higher amount on benefits and we see that in lower wages and bonuses than other comparable Fortune 500 businesses. We pay for every.thing.else for our family of four out of pocket because we never hit the family deductible. The only way we’d hit the deductible is to have an ER visit and a scheduled surgery both in the same year.
The national insurance assumption is that the benefits money that businesses pay would be funneled into higher wages to lift the tax base to cover the extra cost of healthcare. It also assumes somehow shifting the private insurance industry to government employees or having supplemental insurance still available in the US or utilizing the companies to facilitate a public option. Basically what do we do with the insurance complex?
It does have some interesting conundrums: how to attract and pay doctors enough to make the cost of medical school worth it? How to pay nurses? How to beef up the healthcare industry to handle the influx of patients. This question about the workforce dedicated to healthcare is especially important in rural areas where drs don’t want to live due to quality of life, and hospitals have closed. There is severe lack of access in places like SE and NW Oklahoma, SW Missouri, wide swathes of Texas, Alabama, Mississippi, etc. We’re talking 2-4 hour drives to see a specialist.
It’s definitely an interesting issue and one that necessitates a large amount of research and buy-in from health care providers. We can’t just slap something together and pass it party line…as US Congress is wont to do.
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