IRA is Significant Step in Reducing Insulin Costs, but Not Panacea

President Joe Biden signed the Inflation Reduction Act (IRA) that will help to reduce out-of-pocket spending on drugs, including insulin. Patient advocacy groups and physicians say it is a “significant step,” but more has to be done to improve diabetes management.

The bill, signed on July 16, limits the cost of insulin to $35 per month for seniors enrolled in Medicare Part D starting in 2023. That does not apply to patients covered by private health insurance.

The legislation may reduce the prices of prescription drugs, as it allows Medicare to negotiate them with drugmakers starting in 2026. Medicare will first negotiate the prices of medications covered under Medicare Part D that lack a generic or comparable alternative. The drugs under Medicare Part B will be included later.

Seniors covered by Medicare Part D will also have their drug costs capped at $2,000 per year starting in 2023. Moreover, the vaccines will be free for senior Medicare beneficiaries.

In addition, the bill will extend the expanded Affordable Care Act (ACA) program for three years through 2025. It means that the federal government will continue subsidizing medical insurance premiums under the ACA.

The IRA comes when almost half of the US adults (47%) say they have difficulty affording health care costs, a new survey by the Kaiser Family Foundation found.

Among those currently taking prescription drugs, one in four say they have difficulty affording their cost. A 2021 report by “RAND Corporation,” a nonprofit global policy think tank, shows that prescription drug prices in the US are on average 2.56 times those seen in 32 other nations.

More affordable insulin

More than 30 million people in the US have diabetes, and over 7 million require daily insulin. Yale University researchers found that 14% of those who use insulin spent at least 40% of their postsubsistence income — what is available after paying for food and housing — on the drug.

That is not surprising, as the average list price for a vial of insulin in the US is $98.70, while the average price in Canada is $12.

The American Diabetes Association (ADA) said in a statement that the first national copay cap was “a potentially life-saving policy change for seniors” and promised to do more work to expand this benefit to all people with diabetes who rely on insulin to survive.

The Endocrine Society also applauded the IRA and called the signing of legislation “historic” but said there is more work to be done and would advocate for solutions to reduce out-of-pocket expenses for all people with diabetes.

Dr. Alicia McAuliffe-Fogarty, a licensed clinician and researcher, considers the IRA in significant step to reducing the costs insulin, as one in every three dollars in prescriptions are spent by people with diabetes. She now hopes these copay caps will be extended to private insurance plans.

She points out that in employer insurance plans, generic insulins — the older version of insulins — are on tier one for private insurance. However, the newer analogs that are better for diabetes management, particularly for younger populations with type 1 diabetes, are on tiers four, five, and six.

And when monthly insulin costs reach hundreds of dollars, it becomes unaffordable for most middle-class families.

"Many kids don’t do sports activities because they need insulin. Many families are making choices, for example: can I let my kid go to a field trip, or do I have to pay for insulin?"

Dr. Alicia McAuliffe-Fogarty

In a survey from 2019 published in JAMA Internal Medicine, more than one-third of patients reported cost-related underuse. The insulin rationing due to high prices is also widely reported in the media.

McAuliffe-Fogarty says the dangers of insulin rationing include increased sugar levels, as well as a higher risk of diabetic ketoacidosis, which may lead to hospitalizations and long-term complications.

“Unfortunately, many younger populations are still making these decisions that may affect their health outcomes,” she added.

McAuliffe-Fogarty thinks we should look at diabetes management as a whole because it is not only about insulin. For example, insulin pumps and newer technologies using continuous glucose monitors give more flexibility in diabetes management and reduce the risk of hyperglycemia.


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