Monumental Prescription Drug Pricing Plan Could Improve Access for Millions on Medicare
diaTribe Change supports a drug pricing plan part of the Build Back Better Act that includes an insulin copay cap, a cap on annual out-of-pocket prescription drug costs, a rule allowing Medicare to negotiate prescription drug costs, and a drug inflation tax penalty. If passed, the proposed plan could improve access to diabetes care for millions.
The White House and Congress announced a prescription drug pricing plan in late 2021 that would cap the monthly cost of insulin at $35 and include other savings on diabetes care for people on Medicare as part of the Build Back Better (BBB) Act – the Biden Administration's package of social investments. The Act includes a prescription drug pricing plan that would cap the monthly cost of insulin at $35 and include other savings on diabetes care for people on Medicare. Congress is still negotiating the specifics of the proposal.
"One of the most egregious examples of what’s happening with drug prices is regarding the treatment of diabetes and the cost of insulin" said President Joe Biden in a recent briefing on the drug pricing plan, "a drug that people with Type 1 diabetes need to take throughout their lives to control their diabetes and stay alive."
If passed, the Act’s drug pricing component will incorporate four key items that could improve access to affordable diabetes treatments:
- Reduced cost-sharing for insulin under Medicare and private insurance to no more than $35 per month. In January 2021, the Centers for Medicare and Medicaid Services (CMS) began a pilot program that capped the monthly cost of insulin at $35 for people on Medicare. If the BBB bill is passed, the $35 insulin copay cap would be permanent for seniors and would also apply to individuals with private insurance. The plan would require Part D, the prescription drug coverage part of Medicare, and group health plans to cover at least one dosage form of insulin. The cost-sharing payments would count toward the deductible or out-of-pocket maximum and would take effect in 2023.
- Lower out-of-pocket costs for seniors so that they do not have to pay more than $2,000 a year for their prescription drugs (through Medicare Part D). Currently, no limit exists on what Medicare recipients have to pay out of pocket each year for prescription drugs. Accordingly, millions of seniors pay over $6,500 each year for drug costs.
- Allow the federal government to negotiate drug prices for certain prescription drugs, including insulin, under Medicare. The Secretary of Health and Human Services (HHS) would negotiate up to 10 eligible high-cost drugs, including insulin, and would eventually go up to 20 drugs in 2028. This includes prescription drugs that seniors get through Medicare Part D, and drugs that are administered in a doctor’s office through Medicare Part B. The Medicare Modernization Act of 2003 barred the government from negotiating drug prices directly with drug manufacturers. Additionally, 83% of US adults support allowing the federal government to negotiate drug prices which can increase access to affordable treatments for people with diabetes.
- Impose a tax penalty if drug companies increase their prices faster than inflation. This inflation cap would apply to people on private insurance plans as well as Medicare. Drug manufacturers will owe a tax penalty if they do not comply.
"These changes are going to ensure access to affordable coverage for millions more Americans and help more people with diabetes get the coverage they desperately need," said President Biden.
diaTribe Change is excited to see this proposal to lower prescription drug costs for seniors in the US, many of whom have diabetes and rely on insulin. About one in five people on Medicare have diabetes, which translates to about 12.5 million people. Moreover, over 3.3 million Medicare beneficiaries use at least one form of insulin.
The House of Representatives passed the Act on November 19th but the Senate is still debating the provisions.
diaTribe Change has joined with the American Diabetes Association (ADA) to advocate for the passage of BBB to make insulin more affordable for people with diabetes. We will continue to provide updates on the progress of BBB.