February 03,2020

Grassley and Wyden Tout Benefits for Insulin Users in Prescription Drug Bill

Finance Committee Leaders Highlight How Legislation Takes on Cost of Life-Saving Diabetes Drugs
Chairman and Ranking Member Update Public on Investigation to Spotlight Broken System that Drives High Insulin Prices at the Expense of Patients

WASHINGTON – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) described how the committee’s prescription drug pricing reform bill, passed by the committee with an overwhelming bipartisan vote in July and updated in December, will help control the cost of insulin and help Americans with diabetes. Grassley and Wyden also provided a brief update on the status of their investigation into how these drugs are priced.
“Our drug pricing bill is going to lower what seniors and American families pay for prescription drugs, and finally bring accountability to an industry with a long record of price gouging. Americans are crying out for action to lower prescription drug prices, and insulin is Exhibit A for why Congress must take action,” Grassley and Wyden said.  
The updated Prescription Drug Pricing Reduction Act (PDPRA), also known as Grassley-Wyden, will help stem the tide of insulin’s historic price increases and protect Americans who need it from high costs in the following ways:
Spares Americans from Catastrophic Costs: One in five beneficiaries who are enrolled in Medicare Part D and need insulin reach the catastrophic phase annually, which means they are on the hook for the cost of their insulin and other drugs that can amount to thousands of dollars under current law. Grassley-Wyden removes that financial burden and fear by adding an out-of-pocket cap to the Part D program. The updated version of the bill also creates an option for Part D beneficiaries to spread their drug costs over the entire year, so they will not only be protected from catastrophic costs, but also have more peace of mind on their monthly costs.
Lowers Cost-Sharing: Month after month, patients with diabetes depend on their insulin prescription, and with each fill comes paying their share of the cost. 
·      The updated version of Grassley-Wyden lowers cost-sharing in the initial phase of the benefit, which starts after a patient has paid any deductible and extends until they enter the catastrophic phase, from 25 percent to 20 percent. A patient who reaches the catastrophic phase would save, on average, over $100 before reaching the threshold. This provides meaningful relief, especially for the numerous patients living on an economic tightrope.
·      Lowers insulin cost-sharing by eliminating the coverage gap, or donut hole. In addition to the patient paying 5 percent less in the initial phase—down from the 25 percent current law patient responsibility in the donut hole, getting rid of the donut hole enables patients to continue to a lower-cost copayment. Currently, a patient using a common insulin covered in a typical Part D plan with a monthly copayment may face a shift to a higher coinsurance payment when reaching the donut hole. Under this common scenario, a $45 initial phase copayment could turn into a $125 donut hole coinsurance payment (25 percent of a $500 a month insulin). While the amount the patient pays will vary by plan and the medications taken in addition to insulin, eliminating the donut hole may reduce diabetics’ annual cost-sharing by hundreds of dollars.
Creates a Medicare Part D inflation rebate: Grassley-Wyden puts downward pressure on the prices insulin makers charge by creating an inflation rebate for Medicare Part D. This means if a company raises the price of insulin faster than the rate of inflation, roughly 2 percent, the company has to pay the difference to Medicare. To put this in perspective, the price of leading insulin brands has increased an average of 300 percent over the last 10 years, or 30 percent a year. The Grassley-Wyden inflation rebate puts a stop to mindless price gouging and holds companies accountable when they do increase prices. The downward pressure on prices also discourages the rebate game that plays by the rule of the higher the price, the greater the rebate.
Makes the system fair for pharmacies and lowers prices at the pharmacy counter. Requires Part D plans and their pharmacy benefit managers (PBMs) to include concessions and fees they negotiate with a pharmacy in the price beneficiaries pay at the pharmacy counter, reducing out-of-pocket expenses and prohibiting retrospective recoupment of payments to pharmacies to provide more financial predictability. This will result in savings to patients for insulin prescriptions as cost-sharing is based on the lower price negotiated between PBMs and pharmacies.
Helps physicians to identify low-cost prescription option. Expands a requirement that Part D plans make the costs patients pay for a medication available in the prescribing physician’s electronic medical record. The capability provided through these real-time benefit tools puts cost information at the prescriber’s fingertips when discussing the available drug treatment options. This helps diabetics and others to get the best treatment at the lowest cost.  
Strengthens the Medicaid Drug Rebate Program: Grassley-Wyden gives insulin makers a choice: lower the price of insulin, pay a steep penalty if prices stay at current levels, or pay an even higher penalty if prices increase beyond current rates. This improved inflation rebate in Medicaid ties what insulin makers owe to taxpayers to what they originally charged when the drug came to market.
Grassley and Wyden also provided an update on the status of their investigation examining the role of manufacturers and PBMs in the rapid rise of insulin prices.
“We launched an investigation into insulin prices to give the American people answers about why this critical medicine has become so expensive. We are still on track to explain our findings about this failed market, but some companies in the insulin pricing and supply chain have decided it’s in their interest to stonewall the committee while Americans continue to ration their medicine, sometimes with fatal consequences. This stonewalling is unacceptable and will not continue,” Grassley and Wyden said.

In February of last year, Grassley and Wyden began a landmark investigation into why and how the price of insulin has increased so dramatically in recent years. Grassley and Wyden requested information on the process used to determine list prices and the process used to determine net prices that result from negotiations and agreements with PBMs.