Public Health

Biden proposed to cap all insulin prices at $35 a month with little chance of passing Congress

President Joe Biden delivers the State of the Union address to a joint session of Congress on Feb. 7, 2023

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President Joe Biden used the bully pulpit during the State of the Union address this week to call for a universal price cap on insulin for all diabetes patients but the proposal is very unlikely to pass the current Congress.

Biden’s signature legislative achievement, the Inflation Reduction Act, has capped insulin prices for Medicare recipients at $35 per month but the law does not shield younger diabetes patients with private insurance or without insurance from higher prices.

“Let’s finish the job this time. Let’s cap the cost of insulin for everybody at $35,” Biden told Congress Tuesday night.

As the president spoke, Sen. Jeanne Shaheen, DN.H., called on Congress to pass the Insulin Act which would expand the $35 price cap to people with private insurance. Shaheen co-sponsored the bipartisan legislation with Sen. Susan Collins, R-Maine, last July.

The average price of insulin in the US in 2018 was 10 times higher than the average price in other wealthy nations, according to a report from the Rand Corp. in 2021.

Though there’s some bipartisan support for a universal insulin price cap, the proposal will face a tough battle and is unlikely to pass in a narrowly divided Congress where Democrats hold a slim majority in the Senate and Republicans have tenuous hold on the House.

Even when Democrats controlled both chambers last summer, Senate Republicans managed to kill a measure that would have capped insulin prices at $35 a month for people with private insurance. Should the Senate pass the Insulin Act, it would still face a House that’s now in GOP hands.

Rep. Cathy Rodgers of Washington, the Republican chair of the House Energy and Commerce Committee, wasted no time dismissing Biden’s proposal in real time, decrying government price caps on insulin across the board as “socialist” and a “federal mandate” that hurts competition .

“It’s time for the President to abandon his socialist price-schemes and work across the aisle to make insulin products more affordable without jeopardizing insulin competition and innovation,” Rodgers said in a statement released during the president’s address Tuesday night.

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Lisa Murdock, chief policy officer at the American Diabetes Association, acknowledged that extending the insulin price cap to people with private insurance will be an uphill battle in the current Congress. But Murdock noted that seven Republicans voted for the cap in the previous Senate.

“We’ve seen Republicans step out and step up in support of taking this action, so I don’t want to say that we think it’s unachievable — we’re still very committed to working with members on both sides of the aisle to do this,” Murdock said.

The insulin market is dominated by Eli Lilly, Novo Nordisk other Sanofi. Industry reaction to Biden’s proposal was mixed.

Lilly supports extending the $35 price cap to all Americans, said spokesperson Kristiane Bello. The company has a program to provide insulin to patients for $35 or less a month regardless of their insurance status, Bello said.

Sanofi also supports a universal $35 price cap on insulin and already provides the medication to the uninsured at that price through a savings program, a company spokesperson said.

Novo Nordisk is concerned the government setting drug prices will ultimately reduce patient access to new therapies, said spokesperson Nicole Araujo.

Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, called insulin cost caps “a band-aid on a broken system that’s forcing people to pay more for medicines than health insurers and pharmacy benefit managers pay.”

Last month, California south insulin manufacturers and pharmacy benefit managers CVS Caremark, Cigna’s Express Scripts other United Health’s Optum alleging they are leveraging their market power to overcharge patients.

CNBC has reached out to the pharmacy benefit managers for comment on the president’s remarks.

About 40% of people with diabetes have private insurance and 5% are uninsured, according to the American Diabetes Association. One in 5 diabetes patients with private insurance are paying more than $35 per month for insulin, according to a survey from the Kaiser Family Foundation.

Although insulin prices vary depending on a patient’s insurance policy, Murdock said in some cases people are paying hundreds of dollars per month for medication they need to survive.

Among people taking insulin with insurance through their employer, about 9% of them were paying more than $200 out of pocket in 2019, according to an analysis from the Health Care Cost Institute. These individuals were spending $403 per month on average, according to the analysis.

An estimated 1.3 million adults in the US had to ration their insulin in 2021 due the price, according to a Harvard study published in the Annals of Internal Medicine. Patients rationed by skipping doses, taking less insulin, or delayed buying the injections to save money.

States have been taking matters into their own hands in the absence of a federal price cap on insulin across all forms of insurance. So far, 22 states and Washington, DC, have capped the price of insulin. The cap ranges from $25 in Connecticut for a month’s supply to $100 in other states.

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