Insulin Cost Is Falling For Medicare Members – What About For Yours?

We’ve been hearing questions about Medicare’s new arrangement to lower the cost of insulin for Medicare beneficiaries. This program involved CMS working directly with the drug manufacturers on the participant cost share of these products, with the objective of keeping patients’ costs more consistent through the various phases of the Part D benefit. 

Now the private sector is asking if more can be done to reduce out-of-pocket expenses for insulins for their plan members. We would encourage plan sponsors to explore options to leverage authorized generics for some of the insulins. These aren’t true generics, but rather therapy options where the manufacturer releases a branded copy at a lower price point. In January of this year, Novo Nordisk released authorized generics of its highly utilized insulins, Novolog and Novolog Mix, at a 50% discount. Similarly, in 2019 Lilly released an authorized generic of its market-share leading insulin, Humalog, at a 50% discount. These, along with biosimilars and follow‑on biologic products, Admelog and Basaglar, will help lower the unit cost of insulin, driving down the PMPM trend projection for the diabetes treatment category. 

We have been working with pharmacy benefit managers (PBMs) and carriers on how to position insulin on formularies. Some will offer formulary options where the authorized generics will be placed as preferred products. The challenge for employers is that rebate guarantees will likely be adjusted, potentially leading to less plan savings. Overall, we’re seeing that employers are increasingly willing to consider different formularies given the new financial market dynamics.

One of the bigger PBMs, Express Scripts, is providing a program to cap member cost share of certain insulins at $25 per 30 day supply. As we check with other vendors to see if they are planning to do something similar, many just point to fact that there are various options within their lower preferred copay tiers and that there are drug manufacturer coupons members can access. Take this opportunity to talk with your pharmacy vendors about whether your plan members are taking advantage of lower cost options.

Raymond Brown
by Raymond Brown

Partner, Mercer Health

North American Clinical Pharmacy Leader, Mercer

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