Diabetics will now see a break in their out-of-pocket costs for insulin. Sanofi, one of the leading manufacturers of the hormone, joined two other major pharmaceutical companies in capping their insulin copays at $35. This comes after years of pressure by President Biden, lawmakers and activists for companies to lower their list prices. White House Correspondent Laura Barrón-López reports.
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Amna Nawaz: Diabetics across the country will now see a break in their out-of-pocket costs for insulin. This month, Sanofi, one of the leading manufacturers of the hormone, joined two other major pharmaceutical companies in capping their insulin co-pays at $35. This comes after years of pressure by President Biden, lawmakers and activists for companies to lower their list prices. White House correspondent Laura Barron-Lopez has been covering all this, and she joins me here now. Good to see you, Laura.
Laura Barron-Lopez: Good to be here.Amna Nawaz: So, these insulin price caps for manufacturers this past month follow last year's insulin price caps for Medicare recipients that took effect. Tell us about the impact of both of these things together.
Laura Barron-Lopez: So, what took effect this month was that Sanofi followed suit with Eli Lilly and Novo Nordisk to implement this cap on insulin co-pays at $35 that took effect January 1. Now, that comes, as you noted, Amna, after the Medicare cap on insulin cost at $35 monthly for people. And that comes after President Biden also was pressuring these companies to do this, and after the provisions of the Inflation Reduction Act that he passed with those Medicare insulin caps took effect last year. Now, just to add some context about the full impact of this, I want to run through a few of the numbers about insulin in the United States. So, in the U.S., around 8.4 million diabetics need to inject insulin to survive, according to the American Diabetes Association. The three major manufacturers we're talking about, Sanofi, Novo Nordisk, and Eli Lilly, who cap their co-pays at $35, make up more than 90 percent of the insulin market. And the Medicare provisions in the Inflation Reduction Act mean that now about 1.7 million Medicare beneficiaries stand to benefit from that $35 monthly co-pay cap on their insulin. So that shows the significance of what's been happening.
Amna Nawaz: Millions of people, right, who have to worry about this. Are there still people who are still left out of coverage right now?
Laura Barron-Lopez: So this could impact a lot of people, but the key difference with what the manufacturers did between the Medicare provision is that the Medicare provision is automatic. That means that someone goes to a pharmacy, they're able to benefit from that $35 monthly co-pay, whereas people who under private insurance or who are not insured, who don't have insurance who may benefit from what the manufacturers did, it's not automatic. They have to register for programs. And it can become pretty complicated for them very quickly. And I spoke to Shaina Kasper, a policy director at T1International. They advocate for insulin access. And she said that she's fearful that manufacturers could simply decide at any point we're not going to provide this reduction in insulin cost, and that essentially what needs to happen is a federal mandate, so that way these manufacturers for uninsured patients, for people who have private insurance can benefit from a cap on their insulin cost.
Amna Nawaz: So, Laura, you mentioned that insulin cap for Medicare beneficiaries as part of President Biden's Inflation Reduction Act. Are there other health care measures that are taking effect this year or next that we should know about?
Laura Barron-Lopez: We have seen already two big ones take effect, Amna, the insulin co-pay caps and the free vaccines. But there's a lot more to come for Medicare beneficiaries. So I want to run through the timeline. Basically, 60 million people are covered under Medicare. And so this month, in January of 2024, prescription costs of certain drugs for Medicare recipients is going to be capped at $3,300 annually. And that's especially helpful for people with expensive medication for chronic conditions like arthritis and cancer. Then, in September of this year, the new list prices of 10 major drugs are going to be made public. That was made possible by the Inflation Reduction Act's provision allowing Medicare to negotiate drug prices with manufacturers. And then, by 2025, that annual cap on prescription costs will drop to $2,000. And, in 2026, those new drug list prices that Medicare was allowed to negotiate will take effect, so people will start to feel it. Now I spoke to Juliette Cubanski, the deputy director of Medicare policy for KFF, and this is how she described the significance of those coming negotiated drug prices.
Juliette Cubanski, KFF: This has been for years a concern for policymakers, particularly Democrats, who thought Medicare should have the ability to negotiate drug prices with manufacturers. But prior to the Inflation Reduction Act, it was actually prohibited by law. So giving Medicare the ability to negotiate drug prices is meaningful, because there are 60 million people covered by Medicare, and that's a lot of leverage that the federal government now has.
Laura Barron-Lopez: So, when Juliette says, for years, that Democrats have been trying to pass a law that allows Medicare to negotiate drug prices, she's talking about going back decades to the George W. Bush administration, when this was trying to get passed. And for those who are concerned about the deficit, she says this has an impact on that as well.
Juliette Cubanski: So the Congressional Budget Office estimated that Medicare would save around $300 billion over 10 years as a result of changes in the Inflation Reduction Act, and much of that is due to the new negotiation program that Medicare is currently implementing. So, Medicare will save money because the cost of drugs will be lower.
Laura Barron-Lopez: So what that means, Amna, is that Medicare costs for American taxpayers will also be lower, and it will as well be lower for Medicare patients.
Amna Nawaz: So, you have been digging into this and reporting all this to lay out all of these details. Do most people understand all of these changes? And I guess, politically, is President Biden getting credit for this?
Laura Barron-Lopez: So the short answer, Amna, is that, no, most people don't understand these changes that are occurring. And part of that may be because the Inflation Reduction Act was this big signature law that the president passed that includes also climate change provisions and a number of other elements that it appears, some Democrats say, is hard for the average voter to understand. But I spoke to Cornell Belcher, a veteran Democratic pollster, who said that, even more than a year after the Inflation Reduction Act was passed, voters still don't quite know what's in it.
Cornell Belcher, Former Obama Campaign Pollster: The Biden campaign has tons of good stories to tell, from everything from historical environmental legislation, to historical infrastructure legislation, to historical negotiations with pharmaceutical companies. But, again, the challenge is, and we're seeing that in — with the voters, is, so many of them don't know, and they're not connecting the dots.
Laura Barron-Lopez: Juliette Cubanski echoed that, Amna. And so this is something that the Biden campaign is going to have to address this year.
Amna Nawaz: Well, do we plan to hear more from them on it? I mean, so far, the opening reelection campaign message has been largely about democracy. Will these issues be a bigger part of their message?
Laura Barron-Lopez: It is going to have to be a critical part of their message, Amna, particularly if the president is going to close that gap in voters' perceptions around the economy. So being able to lower health care costs in people's pocketbooks is going to be a part of that economic message. And they have spent tens of millions of dollars on TV ads and digital ads, some of which highlight the reduction in insulin caps, some of which highlight the ability for Medicare to negotiate drug prices. But, still, Cornell said that they're going to have to do a lot more than just conventional TV ads.
Cornell Belcher: So you have got to flood the box in a way that not even we had to do in 2012 or 2008, right? I think he's got to — the campaign has got to lean into social media spaces harder and in a new way than I think we have ever had to in the past.
Laura Barron-Lopez: Ultimately, Amna, a lot of the Democratic lawmakers that I spoke to said that they want to see Biden make this message more in key battleground states as early as possible. The key difference, they said, between 2016 and Hillary Clinton's campaign and this election cycle and Joe Biden's campaign is that Democrats in battleground states say that Biden's campaign is actually heeding their warnings.
Amna Nawaz: All right, that is our White House correspondent, Laura Barron-Lopez. Laura, thank you so much.