New Strategies Needed to Confront the Growing Diabetes Epidemic
Shadow pricing of diabetes medications is among the key issues confronting patients managing this chronic disease.
It is no secret that diabetes has serious repercussions on the health of Americans. The CDC’s 2015 statistics state that diabetes is the seventh leading cause of death. Also, according to the CDC, 30.3 million individuals in the United States have diabetes, with 23.1 million knowing their diagnosis and an estimated 7.2 million remaining undiagnosed. Additionally, only 5% of these patients has type 1 diabetes (T1D), formerly known as juvenile diabetes since it is commonly diagnosed in children. In T1D, the body does not produce insulin. Type 2 diabetes (T2D) is the most common form of the disease. With T2D, the body does not use insulin properly, which is known as insulin resistance. Therefore, the pancreas starts to produce more insulin to keep up with glucose levels in the body, although it cannot produce enough to keep glucose levels stable.
There are many policy aspects to diabetes, the first of which involves shadow pricing. Shadow pricing is when one company raises its wholesale price for a diabetes medication and others follow suit over time. One example centers around the price hike of Lantus, which was followed by a similar increase for Levemir. The practice has caused several lawsuits to be filed against Eli Lilly, Novo Nordisk, and Sandoz for their alleged dealings in price fixing. The plaintiffs in these cases are accusing these insulin manufacturers of raising list prices to gain favor among pharmacy benefit managers (PBMs). These lawsuits are now in Federal District Court as a class action suit. Additionally, Congress has started to investigate shadow pricing.
Medicaid and Medicare have been negatively impacted by the effects of diabetes. Medicaid is paying more for insulin, and the price hikes are affecting dual-eligible patients in regard to the Medicare donut hole. Also, many states are strapped for budgetary funds and may stop covering certain types of insulin that are more expensive. Additionally, there are no generic options for insulin since it is considered a biologic and not a small-molecule drug. Biosimilars are the sole option, but are only up to 30% cheaper than the available brand in the market. Currently, there are only 3 major insulin manufacturers, which creates not only lack of competition, but also issues with patient access.
The National Clinical Care Commission Act was signed into law in 2017 and established a public/private commission, which will assess current federal programs that support clinical care for diabetes. The commission is also charged with finding inefficiencies and gaps in these programs and will provide recommendations to both the Department of Health and Human Services and Congress.
Nevada’s approach to diabetes was an interesting development, as the state passed its version of price transparency specifically targeted at the disease. The state’s new drug pricing law targets diabetes products and requires PBMs and manufacturers to disclose pricing and rebate information, among other things. This proposal was signed into law after it was first vetoed by Governor Brian Sandoval, as the first draft had much stricter language against price gouging. Lawsuits have been filed against the state on the grounds that the law creates a constitutional violation and breaches patent protection law and trade secrets by asking for price and rebate information. We’ll see how these arguments turn out.
There are multiple Congressional bills currently proposed to address issues surrounding diabetes:
• HR 3124/S1299, Preventing Diabetes in Medicare Act of 2017, proposes to reduce the occurrence of diabetes in Medicare beneficiaries by extending coverage for medical nutrition therapy services to beneficiaries with pre-diabetes or with risk factors for developing T2D.
• HR 3271/S1914, Protecting Access to Diabetes Supplies Act of 2017, targets diabetic supplies within competitive bidding. Specifically, the bill requires CMS to:
- Use specified data to determine whether a bid satisfies certain requirements related to volume of coverage with respect to such products.
- Reject a bid if the bidder does not demonstrate its ability to furnish such products in a manner consistent with its bid.
- Establish a process to monitor the extent to which an entity continues to cover the product types included in its bid. CMS may terminate a contract if it determines that an entity, for reasons other than product discontinuation or market-wide shortage, fails to maintain ready access to such products included its bid. Additionally, the bill specifies that an entity furnishing such products to beneficiaries under the program:
- Must furnish to each beneficiary a brand of strips that is compatible with the beneficiary’s home blood glucose monitor.
- May not attempt to influence or incentivize a beneficiary to switch the brand of either type of product.
- Must contact and receive a request from a beneficiary no more than 14 days prior to dispensing a refill to the beneficiary.
• HR 1617, Promoting Access to Diabetic Shoes Act, proposes to permit nurse practitioners and physician assistants to satisfy the documentation requirement under the Medicare program for coverage of certain shoes for individuals with diabetes.
Lastly, there are more medical advances on the way to help combat diabetes. The FDA has approved Medtronic’s artificial pancreas,” which is the company’s first hybrid closed-loop system. It is the first system that can monitor both blood glucose levels and adjust insulin levels for patients. This is all part of the FDA’s plan to encourage development of an artificial pancreas system, an innovative device that automatically monitors blood glucose and provides appropriate insulin doses in people with diabetes who use insulin.
The FDA has also approved 2 combination products that contain long-acting insulin and glucagon-like peptide 1 receptor agonists. These therapies are first-of-their-kind once-daily injections that combine these drugs.
Jardiance is the first diabetes drug approved to reduce the risk of cardiovascular death related to diabetes. No other diabetes medication has been approved for any sort of cardiovascular benefit, although Basaglar is the first biosimilar of Lantus approved by the FDA. This is not a generic product and is not available to be switched out for Lantus by the pharmacist. A physician needs to prescribe it directly, and there are no interchangeable biosimilars at this time.
We will wait to see what will happen with the shadow pricing issue, as well as how Congress will deal with higher drug prices. Additionally, 2018 could possibly bring a smaller budget for Medicare and Medicaid, which will further affect patients with this chronic disease.