Jan 27, 2020

Trump administration wants to lower seniors' insulin costs

Illustration: Aïda Amer/Axios

The Trump administration is working on a proposal to lower seniors' out-of-pocket costs for insulin, which have nearly doubled over the last decade.

Why it matters: Voters care deeply about prescription drug prices, and if the policy comes to fruition, it could both help seniors afford their insulin and give the administration political points.

Details: The White House, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services are jointly working on the policy.

  • Details are unclear or undecided. One idea is to give insurers an incentive to offer plans with lower cost-sharing, a source familiar said.
  • "The goal is to make sure it’s technically sound and if it helps patients, get it out" as soon as possible, a senior administration official said.
  • A CMS spokesperson declined to comment.

HHS Secretary Alex Azar is recused from the effort because he was previously the president of Eli Lilly, one of three dominant insulin manufacturers.

The big picture: Even as patients are struggling to afford prescription drugs across the board, insulin stands out.

  • It's an old drug whose initial patent was sold for a mere $1. Yet its price continues to rise.
  • One-third of Medicare beneficiaries had diabetes in 2016, and total Part D spending on insulin rose from $1.4 billion in 2007 to to $13.3 billion in 2017, according to the Kaiser Family Foundation.
  • Seniors spent, on average, $588 out-of-pocket for insulin in 2016 — nearly double the price they paid in 2007.

Yes, but: Lowering patients' out-of-pocket spending probably wouldn't lower the actual cost of the drug, meaning that it'd get shifted onto taxpayers.

Between the lines: The Trump administration has either dropped a lot of its drug-pricing ideas or has seen them held up in court.

  • But a meaningful insulin policy could be a big political win, especially because insulin is a poster child for runaway prescription drug prices.

Go deeper: The outrage over insulin prices

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Insulin prices loom large on the 2020 campaign trail for Democrats

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It's well known that drug prices matter a lot heading into the 2020 election, but Democratic candidates are making an especially big deal about insulin, STAT reports.

Between the lines: In some cases, there is arguably a justification for why a drug is very expensive. Insulin — which is a very old drug — is not one of those cases. That makes it easy political fodder.

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The boom times of insulin sales

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The three drug companies that control the insulin market have seen their net sales climb over the past 12 years even as they have had to agree to bigger discounts, according to an Axios analysis of insulins sold by Eli Lilly, Novo Nordisk and Sanofi.

The big picture: Drug manufacturers have largely blamed the broken insulin market — where many people with diabetes are rationing their medication — on other actors within the supply chain. But insulin makers have still been able to collect more money overall and retain their power over the market.

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Trump's latest boost for Medicare Advantage

President Trump and CMS administrator Seema Verma. Photo: Alex Wong/Getty Images

The Trump administration announced Wednesday more changes designed to make Medicare Advantage more appealing and to lower prescription drug costs for seniors.

Why it matters: Although the proposal mainly tinkers around the edges, it could have a meaningful impact on some seniors' pocketbooks while furthering the administration's commitment to Medicare Advantage, a cash cow for insurers.

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