Professional Documents
Culture Documents
Re: Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act
Kaiser Permanente shares your concern about the pricing and affordability of insulin products. As
the largest private, integrated health care system in the U.S., Kaiser Permanente1 is committed to
ensuring our members have access to affordable lifesaving medications, including insulin.
However, the recently introduced Improving Needed Safeguards for Users of Lifesaving Insulin
Now (INSULIN) Act, although well intentioned, will undermine our efforts to ensure our members
have access to quality, cost-effective insulin therapy by destroying our ability to negotiate lower
prices from insulin manufacturers and prohibiting our physician and pharmacist-led efforts to use
the highest value drugs.
Kaiser Permanente provides and delivers pharmacy benefits through a primarily internalized
pharmacy system that fills prescriptions written by Permanente Medical Group (PMG)
practitioners. PMG physicians prescribe and our pharmacies dispense over 90 million
prescriptions annually and we spend over $10 billion annually on pharmaceuticals. We have long
been acknowledged as a leader in providing high-quality, affordable pharmaceutical care.
Kaiser Permanente’s formulary development focuses on the comparative clinical performance of
different therapeutic options. The core of our evidence-driven approach relies on a rigorous process
led by PMG physicians and clinical pharmacists. Prescribers within our system trust our formularies
and adhere to them because they are grounded in clinical evidence and developed in partnership
with their trusted peers.
New, expensive insulins and other diabetes medications (e.g., quick pen combination products, once
and twice daily formulations, new oral agents, etc.) come to market regularly, but do not always
1
Kaiser Permanente comprises Kaiser Foundation Health Plan, Inc., the nation’s largest not-for-profit health plan, and
its health plan subsidiaries outside California and Hawaii; the not-for-profit Kaiser Foundation Hospitals, which
operates 39 hospitals and over 650 other clinical facilities; and the Permanente Medical Groups, self-governed
physician group practices that exclusively contract with Kaiser Foundation Health Plan and its health plan subsidiaries
to meet the health needs of Kaiser Permanente’s members. As the largest private integrated health care delivery system
in the United States, Kaiser Permanente delivers care to more than 12.6 million members in eight states and the District
of Columbia. We are committed to providing high-quality, affordable care and improving the health of our members
and the communities we serve.
1
offer meaningful clinical advantages for all patients or justify often significantly higher prices.
Kaiser Permanente focuses on the highest-value products, which helps us maintain affordable access
to insulin and other drugs for our members. In the case of insulin, we insulate our members from
rising prices by placing preferred insulin products on a generic tier with low cost-sharing. Over 70
percent of our insulin prescriptions are prescribed at the generic tier, with cost-sharing on this tier
almost always below $35, the cost-sharing cap level included in the legislation. And when our
members have a clinical need for more expensive insulin products, they can still access them, in
many cases, on the same cost-sharing tier as lower priced products.
Kaiser Permanente’s approach to drug use management enables us to negotiate deep discounts on
certain insulin products. We strongly prefer securing upfront discounts from manufacturers, not
rebates, and these savings help us keep insulin more affordable for our members. Although
discounts cannot fully offset constant insulin price increases, they are an important tool to fight
rising costs.
Provisions in the INSULIN Act, however, will undermine these efforts. The legislation permits
insulin manufacturers to certify their products by keeping list prices at no more than the weighted
average negotiated price net of rebates for the same insulin as received by Part D or MA-PD plans
for plan year 2021. Such certified products receive special protections under the bill, including a
requirement that Medicare and commercial plans cover these products without imposing any
utilization management protocols and a prohibition on negotiating further discounts or rebates. This
framework will raise, not lower, insulin costs.
The bill’s prohibition on negotiating further discounts will ensure that insulin manufacturers can
lock in 2021 price levels. Beyond rewarding decades of irresponsible pricing behavior, it will raise
costs for purchasers–like Kaiser Permanente–who have managed to maintain lower prices over time.
We estimate this legislation could raise our insulin costs by over $450 million depending on the
final pricing levels set through the certification process. And while cost-share caps might help a
small proportion of the population in the short-term, ever-higher insulin acquisition costs must be
absorbed by employers, individual premium-payers, the Medicare Trust Funds, taxpayers, and the
rest of the health care system.
Particularly problematic is the INSULIN Act’s requirement for plans to cover all certified insulin
products, jeopardizing our ability to prioritize therapies that deliver positive clinical outcomes at a
lower cost. For example, relative to the rest of the health care system, we have greater utilization of
lower cost neutral protamine Hagedorn (NPH) insulins as compared to newer insulin analogs that
can cost up to ten times more. Kaiser Permanente has extensively studied the performance of NPH
insulin among our members through a National Institutes of Health (NIH) grant, and we found that
patients on more expensive insulin analogs had no better blood sugar control or lower risk of
hypoglycemia than those on NPH insulin.2 Designating preferred cost-effective insulins helps us
mitigate the impact of ever-increasing prices to the greatest extent possible while delivering high-
quality care. Eliminating the ability to prefer cost-effective insulins, as put forth in this legislation,
2
Lipska, K. et al., Association of Initiation of Basal Insulin Analogs vs Neutral Protamine Hagedorn Insulin with
Hypoglycemia-Related Emergency Department Visits or Hospital Admissions and with Glycemic Control in Patients
with Type 2 Diabetes. JAMA. June 2018. Available at: https://www.ncbi.nlm.nih.gov/pubmed/29936529.
2
will increase use of more expensive insulin products, driving up costs.
We are deeply concerned that in its current form the INSULIN Act will further insulate
manufacturers from accountability for rising prices, destroy price competition and strip the rest of
the health care system of tools used to combat rising drug costs. Instead, we recommend focusing
on policies that promote competition and affordability. Biosimilar insulins could help make the
market more competitive and ultimately have a net lowering effect on prices. Breaking down
broader barriers to market entry can allow biosimilar insulins to gain a meaningful foothold in the
market. Similarly, efforts to facilitate the development of interchangeable insulins, reduce
anticompetitive behavior and encourage investment in biosimilar insulin development could incent
capable manufacturers to develop biosimilar insulins that could lower costs across the entire health
care system.
We appreciate your focus on this important issue and the opportunity to share our feedback on the
INSULIN Act. We look forward to working collaboratively to improve prescription drug
affordability for all patients. We would be pleased to discuss these comments and our experience
with insulin in our integrated delivery system. Please contact me (Anthony.Barrueta@kp.org), Laird
Burnett (Laird.Burnett@kp.org), David Bennett (David.C.Bennett@kp.org), or Prue Fitzpatrick
(Prue.Fitzpatrick@kp.org) with any questions or concerns.
Sincerely,
Anthony A. Barrueta
Senior Vice President
Government Relations