Q&A: Insulin Price Investigation

With U.S. Senator Chuck Grassley

 

 

A: In January, I regained the chairmanship of the Senate Finance Committee. This committee has legislative and oversight jurisdiction over the nation’s federal healthcare programs, including Medicare, Medicaid, and the Children’s Health Insurance Program. Since the beginning of the year, I have led a bipartisan effort to address an urgent concern impacting taxpayers and consumers. Americans are paying through the nose for soaring prescription drug prices. The sky-high prices are forcing some patients to skip or ration their doses. This has life and death consequences which is especially true for one medicine in particular - insulin. Insulin was discovered nearly a century ago. And yet, the price keeps climbing year after year. Many of the millions of Americans with diabetes, especially individuals with Type I diabetes, rely on daily insulin injections or an insulin pump to manage their blood sugar levels. The Centers for Disease Control and Prevention estimates that more than 30 million Americans have diabetes. That’s approximately 10 percent of the U.S. population. In an effort to unravel drug pricing along the supply chain, I wrote the three largest drug manufacturers of insulin and the three largest pharmaceutical benefit managers (PBMs) to follow the money trail and better understand how they price their insulin products and whether PBMs have resulted in lower costs to patients. As stewards of the public purse, it’s our responsibility to ensure tax dollars are spent effectively. The exorbitant price increases for insulin burden patients and taxpayers. One analysis studied pricing from 2007 to 2017 and found Medicare’s pre-rebate spending on insulin increased 840 percent, while aggregate annual out-of-pocket spending quadrupled. The financial hit takes a big toll on families who already struggle to shoulder the burdens associated with managing a chronic disease and the taxpayer footing the bill. At my county meetings, I regularly hear from Iowans about the financial hardship they face to pay for prescription medications. As my investigation continues into how insulin is priced, I am keeping my nose to the grindstone to pass my bipartisan drug pricing legislation.

 

 

A: In our free market system, competition drives prices down and drives up innovation. Secrecy throws a wrench into the free market forces of the U.S. economy. The bipartisan bill I introduced with Senator Wyden pulls back the curtain on drug pricing. It won bipartisan support from two-thirds of the Finance Committee this summer. It would require drug companies to justify price hikes and pharmacy benefit managers (PBMs) to disclose information on the discounts they are negotiating. Letting in the sunshine would inject a restorative dose of competition into the free market. Transparency brings accountability and puts consumers back in the driver’s seat. So, what’s behind the secrecy for drug pricing, discounts and rebates? Profits, pure and simple. Consumers deserve to know if they’re getting the best value for their health care dollar. That’s also why I’ve teamed up with Senator Durbin of Illinois. Our bipartisan bill would require pharmaceutical companies to disclose their drug list price in TV ads. As a long-time government watchdog, I’ve led efforts to bring more transparency to the people’s business through sunshine laws. For example, my open payments law requires the disclosure of payments between manufacturers and healthcare providers. The Centers for Medicare & Medicaid Services (CMS) reported earlier this year that such payments exceeded $8 billion for the fourth consecutive year. Creating an online platform to disclose financial relationships between industry and healthcare providers fosters a more accountable health care system. Transparency tools like the open payments program empowers consumers and taxpayers. Transparency tools for the nation’s drug pricing system would do the same. Specifically, my Prescription Drug Pricing Reduction Act would require the Department of Health and Human Services to post online drug company justifications for price hikes and the discounts negotiated between PBMs, insurers and pharmacies. This would be done in a way that shines light on these practices without disclosing confidential information that would undercut competition. It also would address spread pricing. This occurs when the middlemen (PBMs) charge an insurer more for a drug than they charge a pharmacy, and then they pocket the difference. Iowans would call that gaming the system. My bill seeks to stop these shenanigans. Unsustainable spending on unchecked drug pricing could unravel our federal healthcare programs, especially when innovative cures and lifesaving treatments come to market. Americans have come to expect access to first-class treatments. At the same time, Americans also are demanding relief from soaring prices at the pharmacy counter. My bipartisan bill would strike that balance and provide both. My bill would cap out-of-pocket costs for Medicare Part D beneficiaries. According to the nonpartisan congressional budget scorekeeper, it also would save taxpayers more than $90 billion in Medicare costs and save beneficiaries $25 billion in out-of-pocket costs and $6 billion in premiums. That’s more than 100 billion reasons Congress needs to get off the dime and act sooner, rather than later.