Congresswoman Diana DeGette

Representing the First District of Colorado
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DeGette unveils new bipartisan legislation to cut skyrocketing cost of insulin

Oct 2, 2019
Press Release
Measure would reduce list price of life-sustaining drug by more than 75%

WASHINGTON, D.C. – U.S. Rep. Diana DeGette (D-CO), co-chair of the Congressional Diabetes Caucus, today unveiled new bipartisan legislation to reduce the skyrocketing price of insulin for millions of Americans.

The legislation, which DeGette plans to introduce when Congress reconvenes later this month, would provide insulin manufacturers an incentive to set the list price of their insulin at, or below, the price it was set at in 2006 – a move that would cut the price of most insulin products on the market today by more than 75%. It would also require insurers to waive their deductible requirements for any insulin sold at the reduced price.

“The cost of insulin has skyrocketed in recent years,” DeGette said. “As a result, millions of Americans are now struggling to afford the medication they need to stay alive. This legislation will help bring down the cost of this life-sustaining drug to help ensure that everyone who needs it is able to get it.”

Specifically, DeGette’s legislation seeks to end the drug industry’s use of rebates that has driven up the list price – which is the price that consumers without insurance, or those who have not yet reached their deductible, are required to pay – for most insulin products.

In 2006, the average list price for a vial of insulin was approximately $68. Today, the average list price for that same vial of insulin is nearly $300.

Under the terms of DeGette’s bill, any drug manufacturer that reduces the list price of their insulin products to the price they were listed at in 2006 will no longer be forced to provide additional rebates to insurers to ensure that insulin product is covered. In fact, it would legally bar drug makers that reduce the list price of their insulin products from offering any additional rebates on that product.

The legislation would also prohibit insurers from refusing to cover any insulin product that’s been reduced to its 2006 price – a key provision that seeks to take away the leverage many insurance companies have been using to force drug makers to offer larger rebates. And it would require Medicare and all private insurers plans to waive the deductible requirements – and provide full coverage – for any insulin product priced at, or below, its 2006 list price.

Like the manufacturers of most prescription drugs, the makers of insulin are often required to offer insurance companies substantial discounts, in the form of rebates, in order for those insurance companies to agree to cover their drug.

To provide these sizeable rebates, without affecting their bottom line, drug manufacturers have been steadily increasing the list prices of their drugs over the years, which they offset with the rebates they offer to insurance companies.

While this practice of raising a drug’s list price to offer insurers a larger rebate does little to affect the drug’s net price that manufacturers actually earn, and insurers ultimately pay – it is having a devastating effect on millions of Americans who either don’t have insurance or have a high-deductible plan and are, therefore, forced to pay the full – now inflated – list price.

If approved, DeGette’s legislation is designed to end this system of rebates that’s driving up the cost of insulin. It would be a win for many consumers who would see the list price of their insulin cut by more than 75%. It would also be a win for drug makers who would be able to sell their products without having to provide additional rebates in order to have their drugs covered by insurers.

In addition to DeGette, the legislation – known as the Insulin Price Reduction Act - is sponsored by U.S. Rep. Tom Reed (R-NY).

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

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.