Insulin Price Controls, Who Falls Through the Gaps?

                In the United States 6 million people take insulin to control their type 2 diabetes.[1] In recent years, the high price of insulin has been widely covered in media.  Disturbing stories of insulin rationing and patient deaths have been widely reported.[2] A Yale study from 2018 found that 1 in 4 patients with diabetes were cutting back on insulin due to cost.[3] More recently, price capping measure have been set in place to lower insulin prices and provide increased access. With these price settings measures, from federal and state regulations to company sponsored programs, it might seem that the problem of insulin affordability has been solved. But the full story is complex, suggesting that at least some patients may still face significant charges for insulin. In particular, patients on Medicare who do not have the Prescription Drug Benefit (Part D) are not protected by federal regulation and cannot benefit from the manufactured sponsored programs. The chance that a patient must pay a lot for insulin appears to vary, at least in part, by their insurance status, as described below:

                Commercially Insured and Uninsured:   Federal legislation to control insulin prices apply only to governmental programs, like Medicare and Medicaid (see below).  For individuals with commercial insurance, price depends on the insurance company’s policies, meaning that the cost for individuals will vary.  Uninsured individuals don’t have that sort of help:  They must pay the price charged themselves.  However, in part in response to the public outcry over price, starting with Eli Lilly & Co., and then followed by Novo Nordisk and Sanofi, insulin manufacturers began to slash prices on their insulins or provide company-sponsored savings programs.[4][5][6]   For instance, Lilly limits expense on insulin to $35 per month.  These company-led, voluntary steps have done a lot to address the problem of insulin affordability for the commercially insured and uninsured.

                Medicare:  Many people on Medicare (about 80%) have Part D, the Prescription Drug Benefit, and this is the group affected by federal limits on insulin cost:  Starting with the “Part D Senior Savings Model” in 2021 and the later ratification of the insulin provision in the Inflation Reduction Act (IRA) in 2023, prices for insulin for those with Medicare Part D were capped at $35 per month.[7][8][9] While the initial model in 2021 only covered some insulins for participants on a subset of plans, the IRA’s insulin cap applied to all insulins covered under Medicare Part D.[10]

                But 20% or so of people with Medicare do not have Part D, which means they are not so clearly protected.[11]  Medicare Parts A and B do not cover most prescription drugs, and Part C (“Medigap”) plans vary on their coverage of insulin.  So, these patients will often be uninsured for insulin and unprotected by the federal legislation.  In addition, the manufacturer savings plans that help control costs for commercially insured and uninsured people explicitly do not apply. Consider the wording provided on the Lilly insulin savings card which requires confirmation that “I am NOT enrolled in a governmental program. Examples include Medicaid, Medicare, Medicare Part D, and others”.[12] An individual in this situation would not receive coverage for insulin under their plan and would additionally not be able to quality for Lilly’s savings program, which requires that patients not be enrolled in any governmental program. They would be responsible for the full price of their insulin prescription. For this population, there is no price protection as many states do not have individual legislation setting price caps and, in many ways, have lost incentive to do so after the passing of the IRA and the introduction of cost-savings plans from the three largest insulin manufactures. While it is possible that in practice individuals in this group may use manufacturer cost savings programs, if the wording were to be strictly enforced, they would not be covered.

Medicaid: Insulin pricing for Medicaid patients may be complex as well, since they are not protected by the Federal legislation, and plans are determined state by state.  But it appears that most prescribed insulin products are covered by Medicaid, easing the burden on this group.[13]

In summary, people getting their insulin prescriptions covered by Medicare (Pard D and potentially a Part C plan) or Medicaid are well covered, and people with commercial insurance or those that are uninsured have prices set through company-sponsored savings plans. However there still exists an important hole, mostly for people on Medicare without drug coverage. The landscape is also unstable for those that rely on company-sponsored plans as those programs. Questions arise over the nature of these company sponsored savings plans: will they stick around forever without regulation or law requiring them to exist? While there may be internal desires for beneficence and external social and economic pressures that led to companies enacting and maintaining these programs, there is nothing stopping the companies from pulling the plug. Individuals with commercial insurance and those uninsured who are covered by these plans have no assurance that these programs will continue to exist and potentially could have their cost protections stripped away.

                The gaps in coverage and lack of regulations protecting many Americans leaves questions to be answered. What needs to be done to provide protection through legislation and regulation? What should providers do for patients that fall in these holes and cannot afford newer insulins? Overall, the landscape of insulin pricing seems to boil down to this: we should remain vigilant watching who is protected, we should enjoy the progress that has been made for many Americans, and we should continue to focus on future measures to close gaps in price coverage for all.