Congresswoman Diana DeGette

Representing the First District of Colorado
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DeGette, Reed introduce bipartisan legislation to cut skyrocketing cost of insulin

Oct 29, 2019
Press Release
Measure would reduce price of most insulin products by more than 75%

WASHINGTON, D.C. – U.S. Reps. Diana DeGette (D-CO) and Tom Reed (R-NY), co-chairs of the Congressional Diabetes Caucus, today introduced new bipartisan legislation to cut the price of most insulin products by more than 75%.

The legislation – known as the Insulin Price Reduction Act – would give the nation’s three makers of insulin an incentive to lower the current list price of their insulin products, which is approximately $300 a vial, to the price it was listed at in 2006, which was, on average, approximately $68 a vial.

In exchange for lowering the price of their insulin products back to their 2006 list prices, the legislation would protect the nation’s insulin makers from having to offer any additional rebates to insurers in order to have their products covered. It would also prohibit health insurers from refusing to cover any insulin product that had its price reduced under the terms of the bill.

“The cost of insulin has skyrocketed in this country and now millions of Americans are struggling to afford the medication they need to stay alive,” DeGette said. “We have to do something to end the industry’s use of these massive drug rebates that are driving up the cost of this life-sustaining drug for the millions of Americans who desperately need it.”

“As the father of a type 1 diabetic, I care about lowering the cost of insulin,” Reed said. “We have seen far too many stories of people rationing, driving across the border to Canada, or flat out going without insulin because of the high costs. This isn’t fair, and I am proud to introduce this bipartisan, common sense bill to dramatically slash the price of this crucial drug so many Americans rely on to get through the day.”

If approved, the legislation is designed to end the industry’s use of drug-manufacturer rebates that are offered only to insurers to lower the cost of the prescription drugs they agree to cover, but that do nothing to help lower the price that consumers without health care coverage, or those who have not yet met their deductible, are forced to pay.

When insurers decide which drugs it will provide coverage for each year, they often pay close attention to the size of the rebate that a drug manufacturer is offering to insurers that agree to cover their product.

As the size of the rebate that insurers have come to expect from drug manufacturers has continued to grow, so too has the pressure on drug makers to increase the list price of their products in order to afford the sizeable rebates that many insurers are now expecting.

While increasing both a drug’s list price and the rebate that a manufacturer offers along with it does little to affect either the drug maker’s or the insurer’s bottom line – the practice is having a devastating effect on millions of Americans who don’t have health care coverage, or have not yet reached their deductible, and are forced to pay the full, now-inflated list price.

Under the terms of DeGette and Reed’s bill, any insulin manufacturer that agrees to set the list price of their insulin at, or below, the price it was listed at in 2006 would be legally barred from offering insurers any additional rebates on that product – a key provision that eliminates the leverage insurers have to pressure companies to offer the sizeable rebates that are driving up costs. It would also prohibit health insurers from refusing to cover any insulin product that had its price reduced under the terms of the bill.

The legislation now heads to the House Energy and Commerce Committee, where DeGette serves as a senior member, for consideration.

A similar version of the bill was introduced recently in the Senate by U.S. Sens. Jeanne Shaheen (D-NH) and Tom Carper (D-DE).

A copy of the bill is available here.

And here’s a quick summary of the legislation:

The Insulin Price Reduction Act

Summary of Legislation

The Insulin Price Reduction Act would, among other things:

  • Reduce the list price of most insulin products by more than 75%. The bill creates an incentive for drug makers to set the list price of their insulin products at, or below, the list price they were set at in 2006. A move that would lower the list prices for some of the most popular insulin products by more than 75%.
  • Require Medicare and all private insurers to cover insulin with no deductible. The bill requires Medicare and all private insurers to waive the deductible requirements for any insulin product that’s been reduced to its 2006 price.
  • Protect drug makers who reduce their prices from the pressure of having to offer any additional rebates. The bill would prohibit any drug maker that sets the price of their insulin products at, or below, its 2006 list price from offering any additional rebates to further lower the cost of that product for insurers. Lowering the list price of insulin benefits consumers. It also allows drug makers who reduce their insulin products to their 2006 prices to sell their products without having to offer additional rebates, giving them an incentive to do so.
  • Prohibit insurers from refusing to cover any insulin product that’s been priced at, or below, its 2006 list price. Under the current system, insurers may refuse to cover a drug that doesn’t come with a significant rebate to reduce the cost for them. This power to deny coverage of a company’s product has led many drug makers to increase the list price of their products in order to offer a larger rebate to insurers. DeGette’s bill would prohibit insurers from refusing to cover any insulin product that’s priced at, or below, its 2006 list price – thus taking away the leverage many insurers currently have to pressure drug makers into raising both their prices and the rebates they offer.