How the Inflation Reduction Act might impact you — and change the US
Seven Republicans joined Democrats in supporting the broader price cap, but that wasn’t enough for passage. A number of Republican senators who voted for the proposal to be removed come from states with some of the highest mortality rates for diabetes, according to data from the Centers for Disease Control and Prevention, including Arkansas, Oklahoma and Tennessee.
Lowering the price of drugs such as insulin, which is used by diabetics to manage their blood sugar levels, is broadly popular with voters, polling shows. Senate Democrats denounced Republicans for voting against relief for Americans struggling to pay for the lifesaving drug.
More than 30 million Americans have diabetes, and about 7 million require insulin daily to manage their blood sugar levels.
Here’s what we know about how Americans would be affected by the Senate vote:
Republicans block cap on insulin costs for millions of patients
What would the insulin price cap do?
The insulin price cap, part of a larger package of proposals to cut prescription drug and other health-care costs, was intended to limit out-of-pocket monthly insulin costs to $35 for most Americans who use insulin.
More than 1 in 5 insulin users on private medical insurance pay more than $35 per month for the medicine, according to a recent analysis from the Kaiser Family Foundation. The same analysis found that the median monthly savings for those people would range from $19 to $27, depending on their type of insurance market.
The average Medicare patient using insulin paid $54 for prescriptions, according to KFF, an increase of nearly 40 percent since 2007.
With the Republican vote to strip the provision, only Medicare recipients would be eligible for the cap. The legislation still must pass the House.
Why is insulin so expensive?
Insulin was discovered in Canada in the 1920s, and the researchers, who won the Nobel Prize, sold their patent to the University of Toronto for $3. Since then, the drug has become a major commercial enterprise.
The global insulin market is dominated by US-based Eli Lilly, the French company Sanofi and the Danish firm Novo Nordisk. A report released in December Democrats on the House Oversight and Reform Committee accused the drugmakers of repeatedly raising their prices in lockstep and working to “maintain monopoly pricing,” allegations the companies have denied.
In a statement, Novo Nordisk said the complexities of the US health-care system influence the insulin market and that “many factors” determine what a person pays out of pocket for insulin. The company said net prices for its products have “continued to decline over the past 5 consecutive years.” Sanofi spokesperson said in a statement that “despite rhetoric about insulin,” the net price of its insulin has fallen for seven straight years, “making our insulins significantly less expensive for insurance companies.”
Eli Lilly did not immediately respond to requests for comment.
Generic insulin is slated to come on the market in 2024 and could help drive down prices.
Researchers also blame issues such as increasingly complicated supply chains for the dramatic rise in drug prices over the past decade. US insulin prices are well above the average price paid in other developed countries, according to a government report.
A Yale University study found insulin is an “extreme financial burden” for more than 14 percent of Americans who use it. These people are spending more than 40 percent of their income after food and housing costs on the medicine.
What does this mean for uninsured patients and Medicaid recipients?
The legislation does not limit the cost of insulin for uninsured patients, despite last-minute lobbying from some House lawmakers to add in such protections. Uninsureds with diabetes are more likely to be using less costly formulations of insulin compared with those on private insurance or Medicaid, yet they have a higher tendency to pay full American price for the lifesaving medication, to a 2020 report from the Commonwealth Fund, a health-care think tank.
For those on Medicaid, many don’t have co-pays for insulin, though some states may have modest amounts beneficiaries must pay, such as $2 for a standard prescription, according to Sherry Glied, dean of the Robert F. Wagner Graduate School of Public Service at New York University.
But in general, costs for those with diabetes can vary widely from person to person, except for those on Medicaid.
“There’s no average person with diabetes, right, and so no two people are managing their diabetes in the exact same way,” said Aaron Turner-Phifer, advocacy director for JDRF, an organization funding research into Type 1 diabetes. “Folks are taking different types of insulin, they’re taking them via pens, they’re taking them via pumps, some are using different devices. … The amount of insulin that they’re taking varies from person to person”
What are Republicans saying about the insulin price cap?
Many Republicans have opposed the $35 cap, saying the measure did not address the root problem of skyrocketing insulin prices. Instead, they said, it would force insurance companies to pass on the cost through premiums.
The cap would have also been a major win for Democrats ahead of the midterm elections in November, possibly feeding the GOP opposition to the proposal.
Still, other Republicans decried what they have called “socialist” government interference in the free market. “Today it’s the government fixing the price on insulin,” said Rep. Cathy McMorris Rodgers (R-Wash.), the top Republican on the House Energy and Commerce Committee. “What’s next, gas? Food?”
Did President Donald Trump lower the price of insulin?
In 2020, President Donald Trump claimed that families he had drastically lowered the price of insulin: “Insulin, it’s going to — it was destroying, destroying people. The cost,” Trump said in the debate. “I’m getting it for so cheap it’s like water.” His statement drew criticism from patient advocates and people still struggling to afford their medication.
In 2020, drugmakers reduced the cost of insulin for some patients who lost jobs, health insurance or both as a result of the pandemic.
Trump signed an executive order to lower the price of insulin as one of his final health-care acts in office. The ruling was narrow, experts said, and would have lowered the cost of insulin for certain patients who go to certain federally qualified health centers.
It was terminated by the Biden administration. Health officials said at the time that the rule would have imposed “excessive administrative costs and burdens” on health centers — and reduced resources for other health services.
Where have Democrats and Republicans stood historically on insulin prices?
Both Democrats and Republicans have blasted the high price of insulin, including in congressional hearings and in bipartisan investigations. But they’ve taken different approaches toward curbing the cost of the medicine.
Republicans have long proposed alternatives to Democrats’ drug-pricing measures. In the House, key GOP lawmakers have released plans to place a monthly $50 cap on insulin and its supplies for those in Medicare’s drug benefit after seniors hit their deductibles. In the Senate, top-ranking Republicans have crafted a bill to make permanent an existing temporary pilot project that gives those on Medicare the option to get a voluntary prescription drug plan where insulin costs $35 per month.
Meanwhile, the bipartisan pair of senators unveiled legislation in June aimed at tackling the cost of insulin, which was the result of months of work to forge a compromise. But the legislation hasn’t come up for a vote and faces daunting political odds in its quest to obtain 10 Republican votes to pass the bill in the Senate.
Evan Halper, Bryan Pietsch and Tony Romm contributed to this report.