Biden proposal to cap all insulin prices at $35 a month has little likelihood of passing Congress

President Joe Biden used the bully pulpit throughout the State of the Union address this week to call for a universal price cap on insulin for all diabetes patients however the proposal is impossible to pass the present Congress.

Biden’s signature legislative achievement, the Inflation Reduction Act, has capped insulin prices for Medicare recipients at $35 per thirty days however the law doesn’t shield younger diabetes patients with private insurance or without insurance from higher prices.

“Let’s finish the job this time. Let’s cap the price of insulin for everyone at $35,” Biden told Congress Tuesday night.

Because the president spoke, Sen. Jeanne Shaheen, D-N.H., called on Congress to pass the Insulin Act which might expand the $35 price cap to individuals with private insurance. Shaheen co-sponsored the bipartisan laws with Sen. Susan Collins, R-Maine, last July.

The typical price of insulin within the U.S. in 2018 was 10 times higher than the typical price in other wealthy nations, according a report from the Rand Corp. in 2021.

Though there’s some bipartisan support for a universal insulin price cap, the proposal will face a tricky battle and is unlikely to pass in a narrowly divided Congress where Democrats hold a slim majority within the Senate and Republicans have tenuous hold on the House.

Even when Democrats controlled each chambers last summer, Senate Republicans managed to kill a measure that may have capped insulin prices at $35 a month for individuals with private insurance. Should the Senate pass the Insulin Act, it could still face a House that is now in GOP hands.

Rep. Cathy Rodgers of Washington, the Republican chair of the House Energy and Commerce Committee, wasted no time dismissing Biden’s proposal in real time, decrying government price caps on insulin across the board as “socialist” and a “federal mandate” that hurts competition.

“It is time for the President to desert his socialist price-schemes and work across the aisle to make insulin products more cost-effective without jeopardizing insulin competition and innovation,” Rodgers said in statement released throughout the president’s address Tuesday night.  

Lisa Murdock, chief policy officer on the American Diabetes Association, acknowledged that extending the insulin price cap to individuals with private insurance shall be an uphill battle in the present Congress. But Murdock noted that seven Republicans voted for the cap within the previous Senate.

“We have seen Republicans step out and step up in support of taking this motion, so I don’t need to say that we expect it’s unachievable — we’re still very committed to working with members on either side of the aisle to do that,” Murdock said.

The insulin market is dominated by Eli Lilly, Novo Nordisk and Sanofi. Industry response to Biden’s proposal was mixed.

Lilly supports extending the $35 price cap to all Americans, said spokesperson Kristiane Bello. The corporate has a program to offer insulin to patients for $35 or less a month no matter their insurance status, Bello said.

Sanofi also supports a universal $35 price cap on insulin and already provides the medication to the uninsured at that price through a savings program, an organization spokesperson said.

Novo Nordisk is worried the federal government setting drug prices will ultimately reduce patient access to recent therapies, said spokesperson Nicole Araujo.

Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, called insulin cost caps “a band-aid on a broken system that is forcing people to pay more for medicines than health insurers and pharmacy profit managers pay.”

Last month, California sued insulin manufacturers and pharmacy profit managers CVS Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum alleging they’re leveraging their market power to overcharge patients.

CNBC has reached out to the pharmacy profit managers for comment on the president’s remarks.

About 40% of individuals with diabetes have private insurance and 5% are uninsured, in accordance with the American Diabetes Association. One in 5 diabetes patients with private insurance are paying greater than $35 per thirty days for insulin, in accordance with a survey from the Kaiser Family Foundation.

Although insulin prices vary depending on a patient’s insurance policy, Murdock said in some cases individuals are paying tons of of dollars per thirty days for medication they should survive.

Amongst people taking insulin with insurance through their employer, about 9% of them were paying greater than $200 out of pocket in 2019, in accordance with an evaluation from the Health Care Cost Institute. These individuals were spending $403 per thirty days on average, in accordance with the evaluation.

An estimated 1.3 million adults within the U.S. needed to ration their insulin in 2021 due the value, in accordance with a Harvard study published within the Annals of Internal Medicine. Patients rationed by skipping doses, taking less insulin, or delayed buying the injections to lower your expenses.

States have been taking matters into their very own hands within the absence of a federal price cap on insulin across all types of insurance. Thus far, 22 states and Washington, D.C., have capped the value of insulin. The cap ranges from $25 in Connecticut for a month’s supply to $100 in other states.