- Nearly 90 insurers, along with diabetes drugmakers Eli Lilly, Novo Nordisk and Sanofi, have agreed to participate in a voluntary Medicare program that would lower what seniors pay for insulin, the Trump administration announced Tuesday.
- Through the program, seniors with diabetes who are covered by participating Part D and Medicare Advantage plans would gain access to a broad set of insulins, beginning in 2021, for no more than $35 per month, regardless of what phase of coverage they're in.
- The Centers for Medicare and Medicaid Services, which is coordinating the program, estimates the typical senior would pay two-thirds less than usual for their insulin under the plan. Manufacturers will pay an additional $250 million in discounts over the five-year model, CMS said, although that sum represents a small fraction of what drugmakers earn on insulin sales.
Insulin costs have remained a major flash point, drawing sustained public and political criticism as drugmakers and insurers continue to battle over who's responsible for high out-of-pocket insulin costs.
AHIP, a lobby for insurers, applauded the program, calling it an "excellent example of public-private partnerships where everyone wins, but especially patients." In a 2019 report, the Health Care Cost Institute, a research group founded by major payers, claimed that almost half the increase in the cost of covering a person with diabetes between 2012 and 2016 was due to higher insulin list prices.
Unsurprisingly, the response from PhRMA, the chief drugmaker lobby, was more measured. In a statement on the plan, the group criticized insurers for failing to fully pass on to patients the savings provided by drugmaker rebates and discounts.
CMS plans to release premiums and costs for Medicare plans, including those in the model, by September. Beneficiaries will be able to shop the programs during Medicare open enrollment from Oct. 15 through Dec. 7 this year, for Part D coverage beginning Jan. 1.
If the model is successful, CMS will consider expanding it to other high-cost drugs, CMS administrator Seema Verma said on a call with reporters Tuesday.
Thirty million people in the U.S. and one in three Medicare beneficiaries have diabetes. Insulin is critical for managing the condition, but the cost of several modern versions of it have increased sharply in the past few years. Medicare's Part D prescription drug benefit spends $13 billion a year on insulin alone.
Beneficiaries' out-of-pocket costs in Part D can fluctuate widely from month to month due in part to different rules depending on the phase of the Part D benefit, making it hard for people with diabetes to budget drug costs.
The Trump administration announced the voluntary model in mid-March in an attempt to brake rising diabetes spending and to make out-of-pocket costs more predictable.
Currently, insurers in Part D can sell prescription drug plans that include lower cost-sharing in the coverage gap, a period where consumers are on the hook for a higher amount of prescription costs. Doing so, however, means insurers pay for costs usually covered by pharmaceutical manufacturers — leading to higher premiums and co-pays, CMS claimed.
The new model, however, requires manufacturers to continue paying the 70% coverage gap discount for their insulin products. Insurers, meanwhile, must lower cost-sharing in their plans to no more than $35 for a month's supply of insulin, in part through applying manufacturer rebates.
The model will result in slight premium increases across enhanced plans: as little as $1 to $2 higher, CMS said. Eighty-eight commercial insurers participating in the Part D program applied to offer the lower cost insulin across more than 1,750 plans.