People with type 1 diabetes was diagnosed and because of the costs, they lost the life because they couldn't afford the exorbitant price of his life-saving insulin. As they had a full-time job that didn't offer health insurance. But because he was working full-time, he didn't qualify for subsidies under the Affordable Care Act. The insurance he could get, the premium and the deductible were so high, he couldn't afford to pay for a policy. His deductible would've been $7,600.
When the patients were diagnosed with type 1 diabetes, Smith-Holt said, her son was determined not to let the disease change his life. Type 1 diabetes is an autoimmune disease that causes the body's immune system to attack healthy insulin-producing cells in the pancreas mistakenly. Insulin is a hormone that helps transport the sugar from foods into cells for use as fuel.
People with type 1 diabetes make little to no insulin, so they must replace the lost hormone through injections or a tiny tube inserted under the skin and attached to an insulin pump. But replacing that lost insulin doesn't come cheaply.
More than 7 million Americans require insulin
Smith-Holt isn't alone in trying to draw attention to this problem. Two years ago, the American Diabetes Association asked Congress to hold hearings to determine why the cost of insulin was skyrocketing. "Insulin is a life-sustaining medication for approximately 7.4 million Americans with diabetes, including approximately 1.5 million individuals with type 1 diabetes. There is no substitute.
The ADA found there was little transparency in pricing along the insulin supply chain. It's not clear how much each intermediary in the supply chain benefits from the sale of insulin. It's also not clear how much manufacturers are paid as this information isn't publicly available either. The ADA also noted that the current pricing and rebate system encourages high list prices.
Pharmacy benefit managers (PBMs) have substantial market power and can control which insulins are approved to be on an insurer's list of approved medications (formulary). PBMs receive rebates and administrative fees but don't have to disclose them. They can exclude insulins from a formulary if their rebate is too low, according to the diabetes association.
People with diabetes like Alec Smith are the ones who end up harmed by high list prices, high out-of-pocket costs and formulary restrictions. Insulin access and affordability are a matter of life and death. The ADA also had some recommendations that Cefalu passed on to Congress, including:
1. Ensuring access to affordable insulin for those without insurance.
2. Requiring greater transparency throughout the supply chain.
3. Doctors are prescribing the lowest price insulin to meet treatment goals effectively.
4. Keeping rebates, discounts, and fees to a minimum.
5. More closely matching list price of insulin to the net price that's paid.
Smith-Holt has some advice for parents of children with type 1 diabetes and those who have type 1 diabetes themselves.