Under the U.S. Medicare system, the cost of insulin is about 50% higher for beneficiaries who use insulin pumps than those who inject insulin, a new analysis reveals.recently published in the Journal of Diabetes Science and Technology by health care strategist Julia Brown-Georgi, MS, Albany, N.Y., and colleagues.
Robert A. Vigersky, MD, chief medical officer of Medtronic Diabetes, Washington, is senior author. Medtronic estimates that 60,000-70,000 fee-for-service Medicare beneficiaries with type 1 diabetes use insulin pumps.
Under Medicare, insulin delivered via syringe or pen is reimbursed under Part D, the drug benefit, whereas insulin infused by pump falls under Part B, as durable medical equipment (DME).
The price differential arose in 2017, with a rule change to the 21st Century Cures Act regarding reimbursement for infused drugs under Part B, and further worsened with subsequent overall increases in the price of insulin.
Only 29% of Medicare beneficiaries have supplemental Medigap insurance to help lower out-of-pocket costs, the authors of the commentary noted.
“Our patients who are using insulin pumps noticed a big increase in the cost of their insulin when the 21st Century Cures Act took place in January 2017. Without any notification from Medicare, the amount of money out of pocket and the total cost of insulin rose for patients who are using insulin pumps. … There were anecdotal reports; then we looked into it,” Dr. Vigersky, who is also professor of medicine at the Uniformed Services University for the Health Sciences, Bethesda, Md., said in an interview.
Physicians should be aware of the situation in order to counsel patients – who are either aging into Medicare with an insulin pump or who are already in Medicare and want to switch from injections to a pump – that they may encounter higher copays for insulin, he said.
In addition, Dr. Vigersky advised, concerned patients should be encouraged to call their representatives in Congress. But, “this shouldn’t dissuade clinicians from prescribing pumps, because they provide a huge benefit in terms of patients’ overall ability to control their diabetes.”
A call to action as price of insulin rose, suddenly shifted, in 2017
In the article, the authors call for the Centers for Medicare & Medicaid Services to fix the situation with a series of actions, including better aligning the cost of insulin under Parts B and D, and determining reimbursement rates on a drug-by-drug basis, rather than lumping together all infused drugs.
The CMS said in a statement: “As with all relevant and topical research, CMS appreciates the input of the journal authors and considers external research in all potential future policymaking and initiatives.”
As outlined by the authors, the overall price of insulin in the United States has dramatically increased in the past 2 decades. For example, the average list price of one vial of insulin rose from $9.61 to $25.38 between January 2013 and July 2018, a 164% increase.
A provision in the 21st Century Cures Act, which went into effect Jan. 1, 2017, attempted to remedy past overpayment for DME-infused drugs covered under Medicare Part B by changing the pricing methodology. Prior to 2017, the drugs had been reimbursed based on 95% of the 2003 average wholesale price. With the new law, payments have been set to average sales price plus 6%.
As a result, the price of insulin rose by 251% overnight from Dec. 31, 2016, to Jan. 1, 2017, for Medicare beneficiaries using insulin pumps, whereas there was no change for those injecting their insulin.
And then in 2018, insulin manufacturers raised the price by another 53%, resulting in an overall 304% price increase under Part B over 2 years.
Meanwhile, on March 11, 2020, CMS announced a cap on insulin copays in Part D to $35 a month, which doesn’t apply to pump users.
Thus, as of now, the average monthly copay for insulin for pump users in Medicare is about $54.26, about 50% more than the $35 maximum for those who inject insulin.
“This is in the setting of patients skimping on insulin anyway because of the high cost. There’s reasonably good evidence that patients stretch out their insulin because of cost, including those in Medicare,” Dr. Vigersky emphasized.