Colorado legislature enacts price caps of $100 per month for products and authorizes attorney general to investigate pricing.
Starting in January 2020, the price of insulin for diabetic patients in Colorado was capped at $100 per month.
In May 2019, Colorado Governor Jared S. Polis signed House Bill 19-1216, which was sponsored by Democratic Representative Dylan Roberts, into law. The bill not only caps the price of insulin but also authorizes the state attorney general’s office to investigate the pricing and issue a report to the legislature by 2020.1 The investigators are specifically instructed to look into the activities and decisions of manufacturers and pharmacy benefit managers, both of whom play a large role in setting drug prices.
With more than 400,000 patients with diabetes in Colorado, accounting for almost 10% of the state’s total population, the bill will positively affect many patients’ monthly health care costs.2
In Colorado alone, those with diabetes have 2.3 times higher medical expenses than those without it, according to the American Diabetes Association.
The price of insulin and other diabetes supplies is even causing patients to underuse their medications, leading to increased health risks. Although it is reasonable to expect that patients with chronic disorders will spend more on health care than those without, many are still wondering why the cost of insulin itself has continued to rise.
Pharmaceutical manufacturing companies have been under increasing pressure and scrutiny over the past few years because of insulin’s rising cost. It is estimated that the average price increased by 197% to $12.92 per milliliter in 2013 from $4.34 per milliliter in 2002 and has continued unchecked since then.3 It is unclear why the price has risen so much, but Roberts hopes to find out by calling for an investigation. For that reason, he includeda provision mandating such a study as part of the legislation.
The attorney general will investigate the 3 insulin manufacturers, Eli Lilly and Company, Novo Nordisk, and Sanofi. But the law will not limit what the manufacturers can charge insurance companies for insulin.1 It is likely that insurers will have to pay the difference, which some speculate would cause health care insurance costs to increase.
Roberts has said that the price of health care plans will only increase by “a couple of cents, per person, per month.”4
The attorney general may also issue a civil investigative demand to require insulin manufacturers, insurance companies, and pharmacy benefit managers to provide information about drug prices. This information would be publicly available once the investigation was complete.
“Colorado is leading the way with this measure, but this is just a first step. We won’t stop until all the pharmaceutical companies and drug middlemen start taking more accountability and stop gouging patients with their high costs,” Roberts said in a statement.5
If Colorado’s price cap on insulin proves successful, it is likely that a number of other states would follow suit and enact their own legislative proposals regarding pricing. In fact, at least 9 other jurisdictions have enacted legislation with the same goal: Illinois, Maine, Minnesota, New Mexico, New York, Utah, Virginia, Washington, and West Virginia.6
States have different approaches to their legislative actions on this topic, using different co-payment limits, mandated reports, and studies. In addition, several organizations spread the word about innovative legislative developments and initiatives. One, the Council of State Governments (CSG), founded in 1933 and based in Lexington, Kentucky, is the country’s only organization serving all 3 branches of state government. CSG describes itself as “a region-based forum that fosters the exchange of insights and ideas to help state officials shape public policy.”
Another organization, the National Conference of State Legislatures, based in Denver, Colorado, and Washington, DC, provides a similar information-sharing role, albeit exclusively with the legislative branch of government.
Additional legislative action in other jurisdictions on this topic may be forthcoming, especially because the American Diabetes Association estimates that 10.5% of the US population, or 34.2 million individuals, has diabetes or undiagnosed diabetes.7
Pharmacists in the community practice setting know how frequently they encounter such patients with diabetes and their many needs. Many of these patients are also voters, so it is likely that legislative action in this area will continue.
Kristen E. Wilhite is a PharmD candidate at the University of Kentucky College of Pharmacy in Lexington.Joseph L. Fink III, BSPharm, JD, DSc (HON), FAPhA, is a professor of pharmacy law and policy and the Kentucky Pharmacists Association Endowed Professor of Leadership at the University of Kentucky College of Pharmacy in Lexington.