Senator Chuck Grassley (R-Iowa) has maintained his commitment to passing the bipartisan and negotiated Prescription Drug Pricing Reduction Act (PDPRA), or Wyden-Grassley, named for the bill’s other sponsor, Sen. Ron Wyden (D-Ore.). This fact sheet describes how Wyden-Grassley and other Grassley priorities will help control the cost of insulin and help Americans with diabetes.
“My bipartisan drug pricing bill is going to lower what seniors and American families pay for prescription drugs, and finally bring accountability to an industry with a long record of price gouging. Americans are crying out for action to lower prescription drug prices, and insulin is Exhibit A for why Congress must take action,” Grassley said.
Beginning in 2019, as chairman of the Senate Finance Committee, Grassley held three hearings on lowering the cost of prescription drug prices, a bill markup, and conducted numerous bipartisan meetings to advance bipartisan prescription drug deal. PDPRA passed the committee on a bipartisan vote of 19-9. PDPRA lowers costs for seniors, saving $72 billion while also saving taxpayers $95 billion. It remains the only comprehensive prescription drug bill that can pass the U.S. Senate with more than 60 votes.
Throughout 2021 and 2022, Grassley has spoken about his bipartisan efforts to lower prescription drugs costs with President Biden, Speaker Pelosi, Health and Human Services (HHS) Secretary Becerra, members of the Problem Solvers Caucus Health Care Working Group, rank-and-file members of Congress and White House staff. Since then, Grassley has never stopped working to pass his balanced, bipartisan and comprehensive drug pricing bill.
PDPRA will help stem the tide of insulin’s historic price increases and protect Americans who need it from high costs in the following ways:
- Spares Americans from Catastrophic Costs: Roughly 40% of beneficiaries who are enrolled in Medicare Part D and need insulin can face a 25 percent coinsurance in the catastrophic phase annually. The means they are on the hook for the cost of their insulin and other drugs that can amount to thousands of dollars under current law. PDPRA removes that financial burden and fear by adding a $3,100 out-of-pocket cap to the Part D program. The bill also creates an option for Part D beneficiaries to spread their drug costs over the entire year, so they will not only be protected from catastrophic costs, but also have more peace of mind on their monthly costs.
- Lowers Cost-Sharing: Month after month, patients with diabetes depend on their insulin prescription, and with each fill comes paying their share of the cost.
- PDPRA lowers from 25 percent to 20 percent the cost-sharing in the initial phase of the benefit, which starts after a patient has paid any deductible and extends until they enter the catastrophic phase. A patient who reaches the catastrophic phase would save, on average, over $100 before reaching the threshold. This provides meaningful relief, especially for the numerous patients living on an economic tightrope.
- PDPRA lowers insulin cost-sharing by eliminating the coverage gap, or donut hole. In addition to the patient paying 5 percent less in the initial phase—down from the 25 percent, getting rid of the donut hole enables patients to continue to a lower-cost copayment. Currently, a patient using a common insulin covered in a typical Part D plan with a monthly copayment may face a shift to a higher coinsurance payment when reaching the donut hole. Under this common scenario, a $45 initial phase copayment could turn into a $125 donut hole coinsurance payment (25 percent of a $500 a month insulin). While the amount the patient pays will vary by plan and the medications taken in addition to insulin, eliminating the donut hole may reduce diabetics’ annual cost-sharing by hundreds of dollars.
- Creates a Medicare Part D inflation rebate: PDPRA puts downward pressure on the prices insulin makers charge by creating an inflation rebate for Medicare Part D. This means if a company raises the price of insulin faster than the rate of inflation, the company has to pay the difference to Medicare. The average list price of insulin increased 11 percent annually from 2001 to 2018 while inflation was 2 percent annually during the same period. The Wyden-Grassley inflation rebate puts a stop to mindless price gouging and holds companies accountable when they do increase prices. The downward pressure on prices also discourages the rebate game that incentivizes higher prices to secure greater rebates.
- Makes the system fair for pharmacies and lowers prices at the pharmacy counter: Requires Part D plans and their pharmacy benefit managers (PBMs) to include concessions and fees they negotiate with a pharmacy in the price beneficiaries pay at the pharmacy counter, reducing out-of-pocket expenses and prohibiting retrospective recoupment of payments to pharmacies to provide more financial predictability. This will result in savings to patients for insulin prescriptions as cost-sharing is based on the lower price negotiated between PBMs and pharmacies. You can read Grassley’s most recent comments to the Centers for Medicare & Medicaid Services (CMS) to finalize DIR fee reform here.
- Strengthens the Medicaid Drug Rebate Program: PDPRA gives insulin makers a choice: lower the price of insulin, pay a steep penalty if prices stay at current levels or pay an even higher penalty if prices increase beyond current rates. This improved inflation rebate in Medicaid ties what insulin makers owe to taxpayers to what they originally charged when the drug came to market.
Grassley remains committed to passing PDPRA, but continues to hold insulin makers and PBMs accountable by investigating and passing bipartisan legislation such as the Prescription Pricing for the People Act.
Investigating Insulin Manufacturers and Holding PBMs Accountable
During Grassley’s two-year landmark bipartisan insulin investigation with Wyden , Grassley and Wyden studied why and how the price of insulin has increased so dramatically in recent years. The investigation found that manufacturer rebates are associated with high list price in the insulin therapeutic class. PBMs leverage their size to extract higher rebates, discounts, and fees from insulin manufacturers, because PBMs consider insulin products to be interchangeable. While rebates are used to keep insurance premiums low, for those patients with high-deductible health plans, no insurance, or for those who are underinsured, the practice of offering rebates results in high list prices at the counter. This causes some patients to ration their medication or forgo their medication entirely.
Grassley has introduced and unanimously passed out of the Judiciary committee the Prescription Pricing for the People Act with Sen. Maria Cantwell (D-Wash.) to bring transparency to the PBM industry. The bill directs the Federal Trade Commission (FTC) to study PBMs and make recommendations on the effects of consolidation on pricing and anti-competitive behavior.
Most recently, Grassley pressed the FTC to investigate PBMs’ role in consumer drug prices. He urged the FTC to find consensus and move forward on a study examining bipartisan concerns about competition within the PBM industry.
Medicare Part D Senior Savings Model – Capping Monthly Out-of-Pocket Insulins Costs at $35
In 2020, the CMS announced the Senior Savings Model, a new five-year Medicare Part D model to lower out-of-pocket insulin expenses to $35 per month for beneficiaries. Grassley has supported the model and believe it is important tool to controlling out-of-pocket insulin costs. Currently, 17 million Part D enrollees across 50 states are participating in the model. The model has enabled beneficiaries to voluntarily enroll in plan options guaranteeing monthly out-of-pocket spending of no more than $35 for at least one of each dosage form and type of insulin product. As CMS gathers data about the model, Grassley looks forward analyzing the outcomes to determine successes and opportunities for improvement.
Original source can be found here
