HHS projects savings on insulin due to Inflation Reduction Act

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A new report from the U.S. Department of Health and Human Services estimates that if the Inflation Reduction Act's provision capping the cost of insulin at $35 for a month's supply for Medicare beneficiaries had been in place in 2020, 1.5 million seniors across the country would have saved an average of $500 on insulin for the year.

The insulin provisions of the law went into effect January 1, for Medicare Part D. Starting July 1, under Medicare Part B, beneficiary cost sharing will be limited to $35 for a month's supply of insulin. 

Researchers estimate that 1.5 million people with Medicare would have benefited from the new insulin cost-sharing limits if they had been in effect in 2020, with total savings to beneficiaries of about $734 million in Part D and $27 million in Part B – an average savings of approximately $500 for those Medicare beneficiaries.

WHAT'S THE IMPACT

Produced by the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE), the report includes selected findings from a recent report to Congress that examined the role insulin plays in the treatment of diabetes. It also reviewed evidence on how insulin affordability affects adherence to insulin treatment and downstream health consequences, and described policy efforts to improve the affordability of insulin.

The report also provides information on savings by state and by demographic characteristics, including gender, race and ethnicity, and age. The states with the most people with Medicare projected to benefit from the insulin cost savings are Texas (114,000 beneficiaries), California (108,000) and Florida (90,000). North Dakota ($805), Iowa ($725), and South Dakota ($725) have the highest average annual out-of-pocket savings.

In 2019, about 37 percent of insulin fills for people with Medicare required cost-sharing exceeded $35 per fill, including 24 percent that exceeded $70 per fill, according to HHS.

Nationally, the average out-of-pocket cost was $58 per insulin fill in 2019, typically for a 30-day supply. Patients with private insurance or Medicare paid about $63 per fill on average.

THE LARGER TREND

Earlier this month the State of California filed a lawsuit against drugmakers and pharmacy benefit managers for allegedly increasing the cost of insulin illegally, accusing them of "unlawful, unfair, and deceptive business practices" in violation of the state's Unfair Competition Law.

The lawsuit alleges that manufacturers Eli Lilly, Novo Nordisk and Sanofi, and pharmacy benefit managers CVS Caremark, Express Scripts and Optum Rx, have leveraged their market power to overcharge patients.

Last summer, in a bid to make diabetes treatment more affordable, California Governor Gavin Newsom said the state will begin making its own low-cost insulin, using a $100 million budget to kick-start development and manufacturing of the drug.

Meanwhile, a 2022 Podimetrics survey found that more than half (53%) of people living with Type 2 diabetes fear complications from their condition may ultimately result in their death. And about 25% reported requiring emergency care for a Type 2 diabetes complication, with a notable 62% of that group revealing that their emergency care was for a life-threatening issue. 

It was also revealed that 32% of people living with Type 2 diabetes don't trust the U.S. healthcare system to keep them healthy. That raises the possibility that hospitals and health systems may need to do more to foster a sense of trust.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com