On April 10th, executives from Eli Lilly and Company, Novo Nordisk, and Sanofi will go before the House Committee on Energy and Commerce to discuss the rapidly rising price of insulin. . It’s expected that lawmakers will pose hard questions to insulin manufacturers about why the price of insulin is so high.
Also scheduled to testify will be executives from three Pharmacy Benefit Managers (PBMs).
In anticipation of the hearing, the Committee published the written opening statements from all the witnesses, except for Lilly senior vice president Mike Mason. Here are key passages from the opening statements from Novo Nordisk and Sanofi executives:
Doug Langa, Novo Nordisk president
In his statement, Mr. Langa asserts that the company has greatly improved insulin over the years. He also says the problem of high insulin costs can only be addressed through systemic change.
- The truth is that the insulin medicines we sell today, including human insulin, are not the same therapies that were used nearly a century ago. Innovations in insulin and diabetes care over the years have dramatically improved the way patients manage their disease.”
- “We can—and must—do our part to bring relief for patients who cannot afford the out-of-pocket costs of their medications. But we cannot solve the affordability problem alone. The U.S. healthcare system is complex, and many entities play a part in determining what patients pay for their prescriptions. A solution that will bring meaningful relief for patients must address the roles of all participants in the drug supply chain.”
- “While increased competition in a marketplace would usually lead to lower prices, our current healthcare system is built on misaligned incentives that have led to rising costs in medicines. Chief among these misaligned incentives is the fact that the rebates pharmaceutical companies pay to PBMs are calculated as a percentage of WAC [or list] price. That means a pharmaceutical company fighting to remain on formulary is constrained from lowering WAC price, or even keeping the price constant, if a competitor takes an increase. This is because PBMs will then earn less in rebates and potentially choose to place a competitor’s higher-priced product on their formulary to the exclusion of others.“
You can read his full statement here.
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Kathleen Tregoning, Sanofi Executive Vice President for External Affairs
In her statement, Ms. Tregoning echoes Novo’s defense by emphasizing Sanofi’s efforts to innovate diabetes care and programs to keep costs down.
- “Sanofi’s innovations in diabetes, and, specifically, for insulin, have been significant. The earliest insulin preparations were limited by their short duration of action, requiring patients to inject themselves multiple times a day and wake up at night for injections in order to control blood glucose levels….Sanofi scientists succeeded in fundamentally altering the human insulin molecule at the amino acid level, changing its pharmacological characteristics to give patients a steady release of insulin with just a single daily administration.”
- ”List price is the starting point for negotiations with payers and sometimes impacts patient out-of-pocket costs. But focusing solely on the list price does not tell the whole story. In the current system, manufacturers pay significant rebates as a percentage of the list price to government and private payers, as well as other intermediaries, in an effort to improve access for patients. As described later in my testimony, due to these rebates, the average aggregate net price of our products, including our insulin products, has declined over the last several years.”
- ”Despite the many challenges and perverse incentives that exist in our health care system, Sanofi’s commitment to patient affordability means that today, approximately 75 percent of all patients taking Sanofi insulin pay less than $50 per month. We believe many others may be eligible for one of these programs to reduce their costs, and we continue to promote these programs to raise awareness about the support that is available. Last week, Sanofi joined other insulin manufacturers to fund a program that limits insulin copays to $25 for patients covered under ESI and Cigna plans. While this out-of-pocket maximum is greater than patients may pay if they enroll directly in Sanofi’s co-pay assistance program, which may reduce a commercially insured patient’s out-of-pocket burden to as low as $0, we believe this new initiative launched by ESI and Cigna will unquestionably lower out-of-pocket costs for some patients.”
You can read her full statement here.