Colorado Department of Law releases statewide report highlighting barriers Coloradans face to receiving insulin, providing recommendations for making the drug more accessible

Over 40% of survey respondents said they ration insulin due to cost at least once a year

Nov. 2, 2020 (DENVER, Colo.)—The Colorado Department of Law today released a report detailing the barriers Coloradans face in receiving the insulin they need and providing recommendations for how to make the vital drug more affordable and accessible.

Insulin prices rose by an inflation-adjusted 262% between 2007 and 2018 in Colorado. As a result, more than 40% of Coloradans who responded to a Department survey said they ration insulin due to cost at least once a year, and, in some cases where individuals lack access to insulin, they even choose to fast as a means of managing their blood sugar levels.

“As captured in this report, the rising price of life-saving insulin has painful consequences for Coloradans and their families,” said Attorney General Phil Weiser. “Our team estimates 73,800 Coloradans rely on insulin to manage their diabetes based on national statistics. Affordable access to insulin and other healthcare is an imperative, and the current COVID-19 pandemic only amplifies this need. It is also clear that we must take the necessary actions so that none of our residents ever has to ration their medication just to survive.”

Many Coloradans say they are struggling with the cost of insulin

When the state legislature passed House Bill 19-1216, it directed the Department to study the cost of insulin for Colorado consumers. The Prescription Insulin Drug Pricing Report responds to that directive and fulfills that legislative mandate.

The Department insulin report team undertook an extensive investigation, including assessing the range of studies and research performed to date. It also obtained information from health care providers, advocacy groups, drug manufacturers, pharmacy benefit managers (PBMs) and others. Moreover, Professor Robin Feldman, a drug pricing expert, prepared a separate report focused on Colorado for the Department insulin team to use in the Prescription Drug Insulin Pricing Report. Her analysis is attached as an appendix to the report.

Feldman’s analysis found insulin costs for Colorado patients more than doubled over seven years. The average annual out-of-pocket payment for Medicare patients in Colorado rose from $360 to $816 between 2011 and 2019, with some Colorado Medicare patients paying as much as $15,120 annually.

Colorado patients with Medicare insurance also pay more in the gap phase of their coverage than patients in other states, Feldman found. The “donut hole,” as this phase is often called, occurs when patients have reached their deductible and then a certain threshold ($4,020 in 2020 for Medicare Part D). Then the health plan is limited in how much it can spend, and the patient must cover 25% of all prescription drug costs. Colorado patients in 2018 paid $26 more each month they were in the donut hole than patients in other states.

Many Coloradans reported having difficulty accessing supplies as well, such as insulin pumps, which can cost as much as $8,000. Because of the cost associated with pumps, there are racial and other sociodemographic disparities when it comes to accessing supplies. For example, the SEARCH for Diabetes in Youth study found that 26.3% of white children reported using insulin pump therapy compared with only 12.3% of Hispanic children and 5.3% of Black children.

To further understand the real-life circumstances of patients who use insulin, the Department conducted an online survey to Colorado residents in English and Spanish. Nearly 400 Coloradans from 44 of the state’s 64 counties responded to the survey, and many reported struggling with the cost of insulin and other equipment they need. The mental and physical toll for diabetes patients has only increased as the COVID-19 pandemic has continued. Survey respondents reported job loss, furloughs, and salary reductions due to the pandemic, which have made survival even more difficult.

A multi-level response to insulin challenges, including state and federal policy recommendations

Although the reasons behind the pricing increase are complex, the lack of competition among insulin manufacturers and PBMs, the tiering system insurers use to determine what insulin is covered and to what extent, and lack of generic options are some reasons why insulin is not affordable.

Certain barriers to entry make it difficult for new competitors to enter the market and provide consumers with the benefits of more choice and lower priced alternatives. The insulin report includes policy recommendations at the state and federal level to address these barriers.

Those recommendations include:

• Assure transparency in insulin pricing: A bill that passed in 2019 requires drug manufacturers or their representatives to disclose the wholesale acquisition cost of a drug when engaging in marketing activities with health care providers and other prescribers. While this bill was an important step, the report recommends more comprehensive, transactional price transparency reporting to the Division of Insurance from each link in the pharmaceutical supply chain, including manufacturers, PBMs, insurance carriers, and wholesalers.
• Expand mandatory coverage for diabetes supplies: Colorado should pursue additional study regarding cost and availability of diabetes supplies that are processed through insurance and should consider mandating coverage and capping copayments or coinsurance for such supplies.
• Join a bulk purchasing plan to increase purchasing power: Bulk purchasing gives the purchasers greater bargaining power than they would have on their own individually and may be one way for Colorado to reduce insulin costs. Many states have chosen this option, either beginning their own or joining multi-state pools.
• Change patent laws: Changing patent laws will allow for easier introduction of generic or biosimilar versions of insulin and will also stimulate greater competition amongst insulin manufacturers.
• Change drug purchasing laws at the federal level: Permit purchasing outside of the United States, which has higher prices than elsewhere in the developed world, as a strategy for providing access to lower cost supplies of insulin.

For more information, or to view the report, go to coag.gov/insulin.

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Media Contact:
Lawrence Pacheco
Director of Communications
(720) 508-6553 office | (720) 245-4689 cell
Lawrence.pacheco@coag.gov