California lawmakers again try to limit insulin spending

As many diabetics in the Golden State struggle with the cost of insulin, California’s efforts to make drugs more affordable have so far failed. This year, lawmakers will review legislation that will address at least one part of the accessibility problem.

Senate Bill 90, drafted by Senator Scott Wiener, Democrat of San Francisco, would limit how much diabetics pay out-of-pocket for their insulin—prohibit state-regulated health plans from deducting these prescriptions, and cap the $35 copay for 30 insulins . – daily delivery. The current copay limit is $250.

Supporters say the bill is meant to provide immediate relief to consumers as the state works on a more ambitious plan to develop its own low-cost insulin. This is expected to take at least two to three years.

California legislators have tried unsuccessfully in the past to impose limits on cost-sharing. A last-session bill introduced by former Republican Senator Patricia Bates of Laguna Niguel died in Assembly committee. Despite bipartisan support, the insurance industry has resisted, arguing that limiting spending to the consumer alone does little to address the underlying problem: the sticker price of insulin.

“I would never say that the only problem is surcharges; overall cost is also an issue,” Wiener said. “We absolutely need to limit what consumers are paying out of pocket at the same time that we are doing other structural work related to the cost of insulin.”

Twenty-two states and the District of Columbia have introduced limits on co-payments ranging from $25 to $100 a month, said Dr. Francisco Prieto, family physician and chairman of the American Diabetes Association, which sponsors Wiener’s bill.

“We are the largest state in the union, so we are also the biggest target for the opposition,” Prieto said. “We haven’t been able to make it, but I fully expect we will, hopefully this year.”

Approximately 3.2 million people in California have diabetes, and many of them rely on insulin. An analysis of last year’s similar co-payment cap bill showed that there are about 118,000 diabetics with insurance plans that are subject to the state’s cap.

Last year, Congress passed a $35 per month cap on diabetics covered by Medicare, the federal insurance program for the elderly and people with disabilities, but dropped similar efforts for people covered by private insurance. The law went into effect on January 1 and is expected to benefit about 108,000 people in California. According to the US Department of Health and Human Services, each patient will save about $339 per year.

The burden of spending on insulin has a long history – stories of people limiting their medications and relying on the emergency room for uncontrolled diabetes are common throughout the country. A recent nationwide study found that approximately 16.5% of insulin users ration their medications, usually postponing their purchase. Insulin rationing leads to poor diabetes control and is associated with an increase in stroke, heart failure, and kidney failure.

Compared to other countries, the US is known to have the highest prices for insulin, averaging $98.70 per vial compared to $12 per vial in Canada, according to a 2020 analysis by the Rand Corporation, a public policy think tank. People usually need two to three vials per month, and some may need more. What people pay at the checkout depends on their insurance coverage. People without insurance are hooked at full cost.

One recent drug spending report from the California Department of Managed Healthcare notes that among the top 10 most expensive brand-name drugs paid by insurers in 2021, half are for diabetes drugs, and three of them are for insulin. Humulin, a short-acting insulin, was the most prescribed brand-name drug after Pfizer and Moderna’s COVID-19 vaccines, according to the report.

To help cover manufacturing costs, the state has allocated $100 million in the 2022-2023 budget for its CalRx Biosimilar Insulin Initiative, which is the state’s plan to develop, manufacture, and distribute its own insulin products. Half of this money is reserved for insulin development and the other half is reserved for a manufacturing facility in California. This money can be used until 2025-2026.

The idea is that if a government can manufacture its own insulin—with the help of a pharmaceutical manufacturing partner—then it can charge below current market prices.

So far, there has been little update from the state on the progress of the initiative, and the state has not announced who it will partner with to produce its insulin. Experts say that since no other state has attempted this before, the manufacturing partner will play a key role in guiding the state through the approvals it needs from the US Food and Drug Administration.

How long will it take? In an interview published in the December issue of the American College of Physicians Journal, Dr. Mark Galey, the state health secretary, said the plan is to have insulin on the shelves in California in the next 24 to 36 months.

A recent analysis published in the Journal of the American Medical Association notes that if California succeeds, CalRx insulin could potentially be sold nationwide, leading to out-of-state competition.

Potential challenges for the initiative include: sufficient funding to move forward. The initiative was launched in the fiscal year, but as California ramps up its program, it will need constant dollars to keep it going and counter any potential backlash from other insulin manufacturers, the authors of the analysis write.

As part of California’s fight against high prescription drug prices, state attorney general Rob Bonta announced last month that he was suing drug makers Eli Lilly, Novo Nordisk and Sanofi, as well as CVS pharmacy managers Caremark, Express Scripts and OptumRX. The lawsuit alleges unfair and misleading business practices that inflate the cost of treatment. Benefit managers act as intermediaries, negotiating prices with drug manufacturers and pharmacies on behalf of the insurance company.

Viner said he’s overseeing both the attorney general’s case and the administration’s insulin initiative, but at the same time, he hopes the state will introduce its own limits this year on what consumers pay per counter.

“We want to help now,” he said.

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