Texas stakeholders disagree on out-of-pocket insulin costs for the insured

After SB 827 passed the Legislature Monday, the bill was met with praise from lawmakers in both parties, as the state is now one step closer to capping copays on insulin for insured Texans.

The Texas Association of Health Plans (TAHP) is the sole opposed organization and has lobbied against the initiative since its inception. TAHP claims out-of-pocket insulin prices for insured individuals rarely rise above $50 per monthly prescription, and that price caps are a “blank check” for manufacturers to raise insulin list prices as much as they want.



In fact, the association claims insured individuals’ copays for the medication have decreased over the last two decades:


Image: Texas Association of Health Plans


This claim strongly contrasts numerous claims of high insulin copay burdens from insured individuals — including that of SB 827’s prime sponsor, Democratic Rep. James Talarico.

In response to the bill passing the House, he tweeted about how his own experience with unaffordable insulin was his motivation to introduce the legislation. He said — with insurance — he paid $684 for his first monthly prescription of insulin when he was first diagnosed.



He also told State of Reform:

“My own personal experience, as well as the experiences of thousands of Texans with diabetes is in contradiction with the talking points of the health insurance companies.”

State of Reform reached out to TAHP for comment on the inconsistencies between the sponsor’s claims and their own. A TAHP representative said there may be some instances of higher co-pays, mostly for beneficiaries of high-deductible plans. However, SB 827 will impact high-deductible plans as well because a recent change in Internal Revenue Service (IRS) law allows insulin copay caps on these plans.

TAHP maintains their position that out-of-pocket copays for insured individuals have decreased in recent years, citing a study from JAMA.

TAHP also says that SB 827 doesn’t solve the main issue behind high insulin prices: manufacturers charging increasingly higher prices for it. Currently, Eli Lilly, Novo Nordisk and Sanofi are the only three companies producing insulin in the U.S..

Patent protections granted to these manufacturers prevent other manufacturers from bringing generics of insulin to the market — which proponents of generics say would introduce competition and reduce the medication’s cost.

This trio of manufacturers has also been accused of anticompetitive practices, including claims that Novo Nordisk engaged in “collusive price fixing” to prevent competition.

When asked to comment on this, Talarico said he agrees that manufacturers are a big part of the problem. He plans to develop legislation during the interim to address their monopoly over the market.

Nonetheless, he said health plans also play a considerable role in insulin’s skyrocketing prices by enforcing unnecessarily high premiums on consumers. He thus believes they need to be regulated through legislation like SB 827.

“Health insurance companies do carry some of the blame. In fact, there is some evidence that I shared in the committee process — that the list price [of insulin] has decreased, and yet health care copays have increased.”

“They say premiums are going to rise, people are gonna get kicked off their insurance, and none of those doomsday predictions have ever come to pass. So I think it’s really just an attempt to protect the profit margins of big health care insurance companies.”

Talarico said he ultimately wants the state to provide free insulin to any Texan who needs it.