Slow reform of insulin

Carlsbad Current-Argus
Carlsbad Current-Argus

Some New Mexicans who suffer from diabetes are paying a lot less for insulin, and that should begin to show up in health outcomes. It’s probably too soon to expect measurable results.

Diabetes is epidemic in New Mexico. According to the American Diabetes Association, more than 200,00 New Mexicans, 12% of the population, have diagnosed diabetes. Another 53,000 have it but don’t know it. Total direct medical expenses for diagnosed diabetes in New Mexico were estimated at $1.5 billion in 2017. Another $475 million was spent on indirect costs.

Insulin is needed daily for patients with Type 1 diabetes, which is genetically based. Type 2 diabetes can sometimes be managed with other drugs. Cost reports range widely; one study determined that a person with type 1 diabetes incurred annual insulin costs in 2016 of $5,705. It has been five to ten times higher in the United States than in every other developed country.

Insulin was discovered in the 1920s in Canada by three scientists who sold the patent to the University of Toronto for $1 each, believing that this lifesaving discovery belonged to the world and should not be used for profit. To make commercial manufacturing possible, the university gave the rights to a pharmaceutical company. The industry has been in control ever since.

The price of insulin in the U.S. has been a national embarrassment for at least a decade.

In 2020 New Mexico enacted a law (HB 292) that capped the customer’s out-of-pocket cost of insulin at $25 for a 30-day supply, beginning Jan. 1, 2021, for people covered by group healthcare plans. New Mexico was the third state to pass such a law. Several other states have followed.

I wondered, if New Mexico is putting a cap on the consumer’s cost, who is paying the rest of the price? Are pharmaceutical companies reducing their prices (hard to imagine) or are insurers paying the difference?

It’s the insurers, I was told by Sen. Daniel Ivey-Soto, D-Albuquerque, co-sponsor of the bill. He said insurers agreed to the change because it will reduce their costs in the long run.

When diabetics cannot afford insulin, he said, they cut their dose or go without it. That creates serious health complications that are far more expensive, such as heart disease, stroke, amputations and blindness. When insulin is affordable, he said, these complications are prevented so insurers’ costs are reduced.

Now there’s a new federal cap. The just-passed Inflation Reduction Act caps insulin at $35 per month for Medicare patients, beginning in 2023. Medicare patients are not covered by the state law.

I am presuming that, as with the New Mexico law, the cost above the cap will be borne by Medicare. Again, we can hope the results are cost-effective as well as life-saving in the long run.

The new law sets a cap of $2,000 annual out-of-pocket on prescription drugs starting in 2025, under Medicare Part D.

Starting in 2026, Medicare will have the authority to negotiate the costs of certain prescription drugs, starting with just 10 drugs in the first year -- the 10 top-selling drugs under Medicare.

This provision is revolutionary within the recent history of American health care. After decades of the highest pharmaceutical prices in the world, there is finally a wedge that will allow Medicare to begin exercising its purchasing power to reduce prices. The Veterans Administration already does this.

Gov. Michelle Lujan Grisham in June established a Prescription Drug Task Force as an advisory body. Health advocates are now calling for legislation to create a Prescription Drug Affordability Board that could help set reasonable payment costs for drugs.

Americans have finally lost patience with Pharma to the point of doing something about it.

Contact Merilee Dannemann

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