Does Medicare Pay for Insulin and at What Cost?

According to the Centers for Disease Control and Prevention (CDC), more than 30 million American adults have diabetes. Thankfully, insulin has been used to treat it for nearly a century. The problem is that the cost of insulin is skyrocketing. This makes it more of a challenge for people on Medicare to afford it, especially those who do not use Medicare Part D prescription drug coverage.

Under Original Medicare and Medicare Part B, you are responsible to pay for your own insulin (unless you use a medically-necessary insulin pump), insulin pens, syringes, needles, alcohol swabs, and gauze. Medicare prescription drug coverage (Part D) may cover insulin and those necessary supplies. When insulin costs go up, it impacts both the patient and Medicare's budget.

A Brief History of Insulin

When Canadian physician Frederick Banting and his team discovered insulin in 1921 and patented it in 1923, their life-saving treatment changed the world. They sold the patent to the University of Toronto for $1, hoping this would prevent people from profiteering off a condition that was once a death sentence.

Unfortunately, the University of Toronto gave pharmaceutical companies the right to produce insulin royalty-free. It was assumed that not having to pay royalties would allow them to produce the drug without restrictions and that would result in lower costs for patients. That's not how it turned out.

Instead, each company made their own version of insulin and patented it. Then came the era of price fixing. The American Diabetes Association reports that the price of insulin has risen 250 percent since 2007. The Health Care Cost Institute noted a doubling of insulin costs between 2012 and 2016.

The Different Types of Insulin

Not all insulins are created equal. There are traditional human insulins and then there are analog insulins. Analog insulins are a type of human insulin that has been genetically altered. These changes affect the pharmacokinetic properties of the drug. These properties can include how fast a type of insulin takes effect, how long it acts in the body, and how steady it remains in the bloodstream.

Packaging of the insulin also comes into play. Some insulins come in vials and require that patients draw up their insulin into syringes. For those who may not have the dexterity to draw up their own insulin, for those who have impaired vision that could affect their ability to draw up an accurate dose, or for those who prefer the convenience, insulin pens are available. In these cases, pens have the insulin already drawn in them. The patient need only to set the desired amount to inject and administer the drug.

Costs vary with each of these options. Vials of insulin cost considerably less than insulin pens. On average, traditional insulins cost a fraction of the cost of analog insulins because their patents expired in 2000 and generic options are now available. That is not to say that they are inexpensive.

How Medicare Could Save Money on Insulin

Noting the cost difference between traditional and analog insulins, one insurance company decided to take action. CareMore, a subsidiary of Anthem Inc., is one of the insurers that offer Medicare Advantage and Part D plans. They pursued a health care intervention across four states (Arizona, California, Nevada, and Virginia) that spanned three years. Their results were published in the Journal of the American Medical Association in January 2019.

More than 14,000 patients who took insulin were included in their intervention. Specifically, the goal was to transition people on analog insulin to traditional human insulin and to do so with the fewest number of insulin injections per day. This would not only offer convenience, but it would also decrease overall costs and reduce the risk a beneficiary would get caught in the Part D coverage gap known as the donut hole.

The biggest question was how a change in insulin would affect a patient's health. In theory, the pharmacokinetics of the newer analog insulins make them less likely to cause severe swings in their blood sugars, either too low (hypoglycemia) or too high (hyperglycemia). Changing to a less effective insulin option could, in theory, cause their diabetes to be more poorly controlled.

As it turns out, the hemoglobin A1C (HbA1C) level (a laboratory estimate of your blood sugar levels over two to three months) showed that not to be the case. Patients who switched to human insulin had comparable HbA1C to those on analog insulin. There was a statistically significant increase with a 0.14 percent in HbA1c, although that number may not be clinically significant. Of note, there were not more episodes of hypoglycemia or hyperglycemia in the intervention group. This study suggests that changing to older types of insulin can decrease costs and provide similar glucose control without increasing the risk for side effects.

Lawsuits and Investigations Into Insulin Costs

No one should have to decide whether to pay for a medically necessary medication or for life essentials like food and shelter. Unfortunately, many have been forced to do just that. Rising prices have made it harder for people who are uninsured, who have high deductible health plans, and who are on Medicare to afford the medication. Medical organizations like the American Medical Association have called on the government to investigate the issue.

In 2016, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) raised questions about price fixing by three of the largest insulin manufacturers—Eli Lilly, Novo Nordisk, and Sanofi. They asked the Department of Justice and the Federal Trade Commission to investigate. Since then, pharmacy benefit managers (PBMs) have also been under investigation. These include CVS Health, Express Scripts, and OptumRx, a division of UnitedHealth Group. California, Florida, Minnesota, New Mexico, and Washington have also opened investigations and many class action lawsuits have been filed.

Despite the pending investigations and lawsuits, insulin costs continue to go up. Novo Nordisk and Sanofi increased prices another 5 percent in January 2019. Until definitive action is taken, it seems the best a patient can do is to find the lowest priced option and hope their insurance will pay for it.

A Word From Verywell

Newer types of insulin may not be better than traditional insulin to manage your diabetes. They certainly are not as cost-effective. An initiative by a Medicare Advantage plan showed that transitioning patients to less expensive options does not necessarily worsen clinical outcomes. Until pharmaceutical companies and PBMs decrease prices, it may well be something more people will have to do to reduce the financial burden of the condition.

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