Nov 17, 2021

Insulin Price Caps in Texas Provide Relief While Raising Questions About Costs

Reporting Texas

Dawn White, a nurse from Lumberton, Texas, told lawmakers this past summer she paid $500 for a one-month supply of insulin to treat her son’s type 1 diabetes. That was with insurance. If she lacked insurance, the cost would have been more than $1,000.

“Texans are dying because they cannot afford their insulin,” White said. “I have heard hospital patients explain that they have stopped taking their medicine because they can’t afford it. They have to choose whether to buy their insulin or food.”

It was testimony powerful enough to realize something all too rare in the Texas legislature: bipartisanship. The result was passage of a new law that hopes to cap the cost of life-saving insulin for the hundreds of thousands of Texans who live with diabetes.

Senate Bill 827 went into effect on Sept. 1, placing a limit on co-pays at $25 for each monthly insulin prescription for Texans on government-funded insurance plans.

The law prevents diabetic Texans from paying extraordinarily high prices for their insulin, a phenomenon the more than 2 million diabetics in Texas are all too familiar with. Insulin prices have skyrocketed in recent years, tripling in price between 2002 and 2013 according to the American Diabetes Association (ADA).

How much do diabetics pay for their insulin? It depends on the individual’s insurance plan and provider, as they determine how much you pay out of pocket; this is why SB 827’s cost-sharing policy provides relief and consistency.

“Senate Bill 827 was a major victory for people with diabetes,” said Veronica De La Garza, director of state government affairs for the ADA. “Over 11% of Texans have diabetes, a rate higher than the national average. Most of them rely on insulin to preserve their life and their health, making it imperative to lower their out-of-pocket cost for insulin so they can afford this live-saving medication.”

For families with diabetic children, this bill represented a sigh of relief and an acknowledgement of the financial burden they bear by managing diabetes.

Mellessa Denny is a speech and debate teacher from Amarillo, Texas whose 18-year-old son has type 1 diabetes.

“This bill getting passed is the best, most tangible progress we’ve seen yet,” Denny said. “The whole system feels like a punishment for having an autoimmune disease; it’s even a shocking cost even to pharmacists. When our insurance resets at the beginning of each year and we go to fill our first insulin prescription, the CVS employee looks at us with a confused face and asks if we have different insurance we would like to apply.”

Not only does living with diabetes prove financially demanding, but mentally and emotionally as well. Denny and her family are founding members of the Diabetes Foundation of the High Plains, an organization providing support and education to families with diabetic children and lighten this emotional load.

“When my son was first diagnosed at two years old, I told him and my husband we had two ways of looking at this: you can either pity yourself, or you can live each day in the here and now. And that’s what we’ve done,” Denny said. “Nobody should have to choose between taking their medicine and putting food on the table, so hopefully this law will allow more people to enjoy more of their life not worried about paying for insulin.”

“Big Three:” Insulin in Texas

Even insurance providers and business leaders that testified against this bill in the Senate Committee on Health and Human Services, like Bill Hammond, CEO of Texas Employers for Insurance Reform in Austin, were sympathetic to the issue of rising insulin costs and expressed their regret for opposing the legislation.

“Unfortunately, I am here in opposition to SB 827,” Hammond testified. “The lockstep increase in the cost of insulin is unconscionable. There are three companies that have been able to manipulate the markets in such a way that they can renew their patents year after year.

The three companies Hammond referred to are the “Big Three” insulin manufacturers in the U.S.: Eli Lilly, Novo Nordisk and Sanofi Aventis. These three pharmaceutical companies produce nearly all insulin available on the U.S. market.

These companies have been able to keep insulin under patent for more than 90 years via a process known as “evergreening” where companies make a series of incremental improvements to their product, thus extending their patents for decades, according to a 2015 study in the New England Journal of Medicine. This is how they’ve avoided generic insulin from entering the market, maintained a monopoly and continued to charge diabetics astronomical prices for the very medicine they need to survive.

“Insulin pricing in the United States is the consequence of the exact opposite of a free market: extended monopoly on a lifesaving product in which prices can be increased at will, taking advantage of regulatory and legal restrictions on market entry and importation.”

– Dr. Vincent Rajkumar, Mayo Clinic Proceedings

Type 1 diabetic Megan Johnson paid $50 for a 90-day insulin supply with insurance this month, but would have had to pay $3,051 without insurance. “I never asked for my body to fail. Still after 12 years it shocks me,” she said.

The most commonly used forms of analog insulin cost 10 times more in the United States than in any other developed country, according to Mayo Clinic Proceedings. Why is this?

“It’s a choice by these companies to keep raising the price over and over again, because the manufacturing price has not gone up,” said Blake Hutson, associate state director of AARP in Austin. He said passing copay cap legislation gives drug manufacturers a free pass to keep raising the price of insulin, because they know the copays will never go up.

The Future

While America is a long way away from free insulin, White said capping out-of-pocket costs to lower immediate financial burden is a step in the right direction.

SB 827 excludes the uninsured and those with private insurance, thus preventing many diabetic Texans from reaping its benefits. However, Denny said this bill could signify a larger movement toward making life with diabetes more affordable.

“There’s a part in this bill requiring the Texas government look into the price of insulin more closely from here on out, to put pharmaceutical companies under the microscope and examine why it’s costing this much. Hopefully the pressure on these companies will lead them to change their processes and result in more legislation like this in the future,” said Denny.

In the meantime, Denny said she and her family will continue to show up anywhere they can talk about improving the lives of children and families with type 1 diabetes.

“Insulin costs are out of hand and it’s time for the government to step in. This is one of those ‘look across the aisle’ issues that has the power to bring us all together,” she said.