Health Plans, Pharmacy Benefit Managers Innovate to Increase Access to Insulin
At the State of the Union, President Trump laid out a vision for “the most affordable, innovative, and high-quality health care system on Earth.” In attendance were more than a dozen Americans struggling with high insulin costs.
In the face of consistent and alarming price increases on insulin products, pharmacy benefit managers (PBMs) and health plan sponsors are innovating to break through the often-overwhelming financial barrier for patients to access these needed medications, and in some instances outright eliminating patients’ out-of-pocket costs.
More than 6 million Americans living with diabetes use insulin to stay healthy. Unfortunately, one in four of these people admitted to cutting back on the use of insulin because of cost, according to a recent Yale University study.
PBMs, partnering with employers, health plans, and manufacturers, are rapidly responding to the high and rising price of insulin to help patients living with diabetes afford and stay on their insulin prescriptions.
Last year, for example, a PBM and health plan introduced an initiative to apply manufacturer patient assistance programs in a novel way, which lowered the monthly out-of-pocket costs on insulin by 40 percent or more. Under the program, out-of-pocket costs are $25 for a 30-month supply of insulin for eligible health plan enrollees.
Even more recently, another PBM announced it could provide access to diabetes drugs, including insulin, at no out-of-pocket costs to health plan enrollees at a savings to plan sponsors.
These types of cutting-edge programs help to eliminate cost as a factor that prevents not only greater adherence to insulin but also improved health for people living with diabetes. Health plans and employers recognize that when patients consistently take medications like insulin, they can prevent emergency room visits, hospital admissions, and other complications of chronic disease — leading to happier and healthier lives for millions of people.
In addition to these innovative offerings, PBMs also offer employers and health insurers the option of adopting point-of-sale rebates, which allows them to pass all, or a portion of, the rebates (discounts) negotiated by PBMs with insulin manufacturers to patients at the point-of-sale to help lower out-of-pocket costs.
Fortunately, Congress and the Administration are also paying close attention to increased insulin costs. Just last year, the Treasury Department announced a new policy to allow consumers enrolled in high-deductible health plans and health savings accounts the ability to obtain certain medications, such as insulin, as preventive services before meeting their deductibles.
Ultimately, the most effective approach to reducing prescription drug costs is by increasing competition in the marketplace. With sufficient competition, PBMs can negotiate lower net prices from drug manufacturers. And with competition, PBMs have been able to achieve an overall stable cost trend for prescription drugs by innovating consumer-friendly, market-based tools that encourage competition among drugmakers. Indeed, despite a lack of generic competition, PBMs work diligently to keep insulin costs — as opposed to the prices set by manufacturers — as low as possible. And they have succeeded in negotiating deep rebates on insulins where there is head-to-head competition among the brand products on the market, leveraging these savings to benefit plan participants through lower costs and lower premiums.
But there is a rub when it comes to insulin products. Uniquely, brand insulins have very limited generic or biosimilar competition because insulin manufacturers protect their products by patenting newer ways of delivering insulin thus sparing manufacturers for certain insulins and insulins with patented delivery mechanisms from head-to-head competition that lowers costs.
As a result, the private sector, through PBMs, employers, and health insurers — is innovating in response to high and rising drug prices to better meet the needs of consumers, especially those living with diabetes. Until we have more competition with biosimilar insulins, rebates, consumer-focused offerings, and other innovative, market-driven approaches to reducing out-of-pocket costs are part of the solution.
JC Scott, President and CEO, Pharmaceutical Care Management Association