Colorado Becomes First State To Cap Insulin Costs: Limits co-pays to $100/month

Last November, I made a huge error in judgement when reporting on the tragic, avoidable death of a young diabetic man in Minnesota:

When I first watched the video, I got hung up on a different aspect of Alec Smith's story...the question of whether or not he would have qualified for tax credits via an ACA exchange policy based on his income. I reached out to Alec Smith's mother, Nicole Smith-Holt, to clarify a few things from her story, but hadn't heard back yet as of yesterday morning...and made a poor decision to post the article yesterday anyway, in which I speculated, based on the limited information in the video, that Alec may have qualified for some level of assistance after all without realizing it.

The whole post was, quite simply, wrong. It was wrong for several reasons, and I'm sorry for each of them.

I laid out several of the obvious ways in which my original post was out of line, thoughtless and showed a lack of compassion. I apologized personally to Ms. Smith-Holt, she accepted, and we had a lengthy online discussion about her son's story and what led to his death:

the reason Alec did not buy into the marketplace was all because of the stupid deductible- he would have had to pay for premium, medications and supplies as well as copays until that 7,600 deductible was met, that was going to be impossible. Far too many people are stuck with meeting high deductibles and paying list prices on extremely high medications...his medications and supplies were 1300 a month.

Whether or not he qualified for APTC financial assistance for what would have been $5,400 in annual premiums is irrelevant, because it wouldn't have done anything to deal with the $7,600 deductible. Unlike APTC, CSR assistance (which deals with deductibles and co-pays) would've only been available to Alec if he had earned less than $30,000/year. There was no question that he didn't qualify for that, so his APTC eligibility was mostly besides the point. APTC likely would have only shaved a couple thousand dollars off of his total costs, which would have been at least $15,000/year including premiums, co-pays and deductibles.

The bottom line is that there's no logical reason for insulin to cost nearly as much as it does. It's been around since 1922 and hasn't changed a whole lot since then, so any development costs were amortized a good 80+ years ago. The ingredients aren't some absurdly rare commodity like "unobtanium" from Avatar. There's absolutely no excuse for this:

...Now, Smith's mother is speaking out against the high and rising prices of prescription drugs and calling for legislation to prevent excessive price increases for essential medications. "The price of insulin has gone up over 1,200 percent in 20 years," said Nicole Smith-Holt of Richfield, Minn. "It's not affordable. You're price-gouging people who need this one product to live, to survive."

Drugmakers have faced growing pressure over the past year to rein in price hikes, particularly for older drugs such as insulin and epinephrine allergy injections, which have become more expensive without fundamentally changing.

In response to Alec Smith's death, Minnesota legislators have taken action, introducing a bill...

...Rep. Erin Murphy, DFL-St. Paul, authored a bill in Alec Smith's name authorizing the state to buy bulk insulin at a discount and make it available for free or low cost for diabetes patients with emergency needs.

"It doesn't take that next step of driving down the cost (of drugs), which is where we need to go," Murphy said. "But in the short term, I don't want another example of an Alec Smith."

...which passed through the Minnesota state legislature...

Last night, the Minnesota House voted in favor of the Alec Smith Emergency Insulin Act, passing the first-of-its-kind legislation that seeks to ensure that no Minnesotan loses their life because they can’t afford the insulin they need to survive. The bill was included in a House omnibus Health and Human Services budget bill that passed on a vote of 74 to 55.

“Never again should any Minnesotan lose their life because they cannot afford the insulin they need to survive,” said State Rep. Michael Howard (DFL- Richfield). “Far too many Minnesotans are being crushed by the cost of prescription drugs and it’s our responsibility to take bold action that puts the health and well-being of citizens ahead of Big Pharma profits.”

...but unfortunately, somehow still didn't end up actually being signed into law as of the end of the legislative session:

Another threat to the overall deal struck by Hortman, Walz and Gazelka came when Senate DFLers tried to put the Alec Smith Emergency Insulin Act into the health and human services budget bill. That language — to tax insulin makers to fund a program in which diabetics could get insulin in an emergency — had been approved by both houses earlier in the session. DFLers said the GOP Senate blocked it from the budget while Senate GOP conferees blamed the House for not offering the language. After a long debate, the amendment failed 33-34. Gazelka pledged to work on the issue in the interim.

The same amendment was offered in the House but was opposed by DFL leaders — not because they didn’t favor it, but because it would have unhinged the deal that brought the Legislature to completion.

As disappointing as this may be, there is some good news on the insulin front: Last week Colorado beat Minnesota to the punch:

Beginning in January, Colorado residents who have diabetes won’t pay more than $100 a month out of pocket for insulin. Gov. Jared Polis (D) on Wednesday signed legislation setting a cap on the medication’s costs, making Colorado the first such state to do so.

The law limits co-payments for a 30-day supply of the life-saving drug under private insurance plans to $100. It does not directly change the price of insulin.

...Insulin has become a prime example of runaway drug prices in the United States. Colorado legislators laid out the problem in the text of the bill, stating that insulin prices have increased 555% in the last 14 years, even with inflation taken into account.

This bill is different from the Minnesota version; in Colorado's case, they simply put a $100/month cap on how much the enrollee themselves has to pay, offloading the rest of the cost to their insurance carrier. Even so, this at least resolves the immediate issue for those with diabetes, and will perhaps encourage insurance carriers to put some pressure on drugmakers. Speaking of which...

...Separately last week, Colorado passed legislation authorizing the state’s health policy and financing department to develop a plan to begin importing prescription drugs from Canada. Any such plan would require federal approval before it could actually go into effect.