Click HERE to watch Senator Collins’ Questioning
Washington, D.C. - U.S. Senator Susan Collins, a member of the Health, Education, Labor and Pensions (HELP) Committee and co-chair of the Diabetes Caucus, questioned top pharmaceutical companies at a hearing titled, ‘The Need to Make Insulin Affordable for All Americans’. Senator Collins noted that current practices in the insulin market are rife with perverse incentives and are opaque, even to people who have studied the system. Senator Collins explained that insulin list prices have risen while net prices have fallen, and questioned where the money accounting for the difference has gone.
Senator Collins pointed out that pharmacy benefits managers (PBMs) are owned by large insurance companies, and thus their incentives are not always directed toward negotiating discounts in the best interest of consumers. PBMs owned by large health plans decide how to distribute drug savings, which Senator Collins said should benefit the consumer. Instead, PBMs and plan sponsors often keep the difference. PBMs often select the highest-cost insulin products with by high rebates for the insurer’s formulary because their compensation, in the form of sharing part of the rebates, is based frequently on a percentage of the list price.
At the hearing, Senator Collins:
I want to ask our three PBM representatives, Mr. Joyner, who owns your PBM company?
Mr. David Joyner, EVP and President of Pharmacy Services, CVS Health:
And Dr. Kautzner, who owns Express Scripts?
Mr. Adam Kautzner, President, Express Scripts:
Senator, the Cigna group owns Express.
Another large insurer, correct?
Cigna Health Care, yes.
And Ms. Cianfrocco, who owns OptumRx?
Ms. Heather Cianfrocco, CEO, OptumRx:
OptumRx is owned by UnitedHealth Group.
And again, another large insurer. So, to me, this is an example of the system's incentives. You're negotiating for your owners, who are all large insurers, for other plans' sponsors that are insurance companies, for large, self-insured employers, but you're not negotiating for the customer.
To be fair, it's not up to you, what the people who hire you or for whom you work, decide to do with that discount. They could pass it all on, but the evidence is overwhelming that they do not.
Senator Collins has introduced the Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act of 2023 to comprehensively address the high costs of insulin, removing barriers to care and making it more accessible for millions more Americans.
More than 37 million Americans have diabetes, and an estimated 88 million more may be at risk of developing the disease. Diabetes is one of the leading causes of death in the United States, claiming over 100,000 lives in 2021. It is also one of the most expensive chronic conditions in the nation, costing Americans a combined total of $327 billion per year and creating a serious financial burden for many Americans who rely on it to survive. According to the Health Care Cost Institute, nearly 9 percent of patients with private insurance paid an average of $403 per month for their insulin in 2019.
As the founder and co-chair of the Senate Diabetes Caucus, Senator Collins has long worked to increase awareness of the threats posed by diabetes, invest in research, and improve access to treatment options.