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Between 2017 and 2018, insulin copays for seniors rose.
A recent executive order on insulin would touch fewer than 20% of clinics through a program that provides 10% or less of all prescription drugs.
President Donald Trump sometimes speaks as if a hoped-for result is the same as a done-deal. A day after he signed an executive order on insulin at the end of July, he took a victory lap on Twitter.
"Nothing like this has ever been done before because Big Pharma, with its vast power, would not let it happen," he said in his July 25 tweet. "Expensive insulin went from big dollars to virtual pennies."
"Biggest price reductions in history, by far!" Trump continued. "Nothing like this has ever (happened) for our citizens, especially our Seniors. REMEMBER YOUR FAVORITE PRESIDENT!"
If words matter, Trump’s manner of talking about the future as if it were already in the past clearly runs afoul of the facts. But there’s a more subtle effect in play. He presents his move on insulin as a boon to diabetics in general. But the scope of his executive order is more limited than he presents.
The most recent pricing trends, made available to PolitiFact with help from the Schaeffer Center at the University of Southern California, provides a bigger picture that reveals some encouraging news and some stubborn problems.
Trump’s order targeted a select group of health care providers, Federally Qualified Health Centers. These centers serve people of limited means, focusing on rural and low-income communities. The gist of Trump’s order, a Health and Human Service Department spokesperson told us, requires these centers "to provide these drugs to medically underserved patients at close to acquisition cost."
That cost, HHS said, is "very low," but the department isn’t allowed to give the exact number.
We note that it would take several months to implement this policy as it wends its way through the rulemaking process. But the substance of the measure doesn’t match Trump’s soaring rhetoric.
There are over 1,300 of these health centers. That’s a lot, but in terms of the particular federal drug discount program that they use to buy insulin — something called the 340B program — they represent less than a fifth of the 340B participating clinics and hospitals nationwide. And out of all operations that contract with the program, which includes individual pharmacies, these clinics represent less than 2%.
So the executive order affects only a slice of providers, and it hinges on the 340B drug program.
That program itself doesn’t dominate the drug marketplace. Details on insulin sales through the program are lacking, but looking at all prescription drug sales, the program represents about 8% to 10% of the overall market.
"It doesn't help most Americans with their out-of-pocket prices," said Vanderbilt University health policy professor Stacie Dusetzina.
Further limiting the potential impact of Trump’s order on patients’ costs, these Federally Qualified Health Centers have a good reputation of passing along the discounts they get from the government’s 340B program to their patients.
These health centers charge people on a sliding scale. That led drug policy researcher Karen Schwartz with the Kaiser Family Foundation to question the reach of this executive order.
"Most patients likely would still have been protected by the sliding fee scale without this change," Schwartz tweeted July 24.
Trump targeted seniors in his tweet, and it’s worth looking at the insulin prices they, as well as other diabetics, have faced on his watch.
It’s important to note that with prescription drugs, the price isn’t the price. There’s a list price, but what someone actually pays depends on drug maker discounts and rebates given to drug distribution intermediaries, a person’s insurance plan (if they have one) and where they stand with their deductibles and copays.
According to the drug research firm IQVIA, insulin copays generally rose from 2017 to 2018. That was particularly true for those on Medicare who saw their costs go up by about 10%.
That took place even as some insulin prices declined or leveled off. It turns out that in the world of prescription drugs, there’s no guaranteed link between trends in prices and what patients pay out of their own pockets.
Researchers at the University of Southern California’s Schaeffer Center culled the latest numbers for six of the most common insulin products. They found that looking at the list prices — the initial price set by the manufacturer — half of the drugs generally held steady, and half showed moderate increases between 2017 and 2020.
"The timing does coincide with greater attention to the ‘high cost of insulin’ issue in the media and among policy makers," Schaeffer Center fellow and project executive director Karen Van Nuys said.
List prices matter to anyone who has to pay the difference between what they are charged and what the insurance company will pay.
"High list prices harm those without insurance, and those who are insured but are in the deductible phase or pay coinsurance for their medications," said Van Nuys.
Prices after discounts and rebates to the firms that are part of the drug sales chain (net prices) showed a different pattern. Some drug prices fell dramatically. The ones that fell the fastest, Lantus and Levemir, started declining in 2015, two years before Trump took office. For three of the other drugs, prices remained about the same, or fell a bit.
The IQVIA report suggested that several Trump administration policies could help in the months ahead, including a move that would cap copays for some Medicare beneficiaries. The impact on Medicare recipients remains to be seen. An analysis by the Kaiser Family Foundation, along with one published in the New England Journal of Medicine, note that the reach would be limited. Right now, publicly available data doesn’t show that patients are better off.
"The truth is that patients who need drugs like insulin are having a hard time affording them, particularly for the many who are now uninsured," said Vanderbilit’s Dusetzina.
Trump said that his executive order had produced a steep drop in the price of insulin, and urged seniors to take note. No one can predict what the future will bring, but setting that aside, Trump’s move focused on a limited slice of the insulin market.
His executive order touched less than 20% of the clinics that might provide insulin through a key government drug discount program. That drug program itself represents perhaps 10% of the total prescription drug market.
The latest market analysis shows that between 2017 and 2018, insulin copays for seniors rose by about 10%.
Trump’s efforts to make insulin more affordable for seniors may have helped some, but have yet to prove themselves.
We rate this claim Mostly False.
Donald Trump, tweet, July 25, 2020
Statement, Press office, U.S. Health and Human Services Department, July 30, 2020
White House, Executive Order on Access to Affordable Life-saving Medications, July 24, 2020
Department of Health and Human Services, Remarks to 340B Coalition Summer Meeting, July 9, 2018
IQVIA, Diabetes Costs and Affordability in the United States, June 29, 2020
Drug Channels, Trump’s Executive Orders on Drug Pricing: The Drug Channels Guide to Industry Implications, July 26, 2020
Tweet, Karen Schwartz, senior fellow, Kaiser Family Foundation, July 24, 2020
Definitive Healthcare, How Many Federally Qualified Health Centers Are There?, July 1, 2019
Advisory Board, The 340B drug pricing controversy, explained, Sept. 7, 2018
Government Accountability Office, Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals, June 2015
T1 International, 340B, An Under-Utilized Program that May Help, Nov. 22, 2019
GoodRx, How Much Does Insulin Cost? Here’s How 23 Brands Compare, Aug. 23, 2019
S&P Global, Pharmacy cost for Sanofi's biosimilar insulin slashed by 44%, survey shows, Oct. 30, 2019
Health Care Cost Institute, Rising Point-of-Sale Prices for Insulin Correspond with Higher Out-of-Pocket Spending on Insulin in January, Sept. 12, 2019
Health Care Cost Institute, Spending on Individuals with Type 1 Diabetes and the Role of Rapidly Increasing Insulin Prices, Jan. 21, 2019
New England Journal of Medicine, Medicare Part D and Insulin Affordability — The Devil Is in the Details, May 14, 2020
Medical Economics, Dealing with the rising cost of insulin, June 16, 2020
Reuters, Eli Lilly to offer half-priced versions of two more insulin products, Jan. 14, 2020
Centers for Medicare and Medicaid Services, President Trump Announces Lower Out of Pocket Insulin Costs for Medicare’s Seniors, May 26, 2020
Kaiser Family Foundation, Insulin Costs and Coverage in Medicare Part D, June 4, 2020
Axios, A reality check on Medicare's new insulin coverage, May 28, 2020
Axios, The boom times of insulin sales, Feb. 13, 2020
Institute for New Economic Thinking, Who Benefits When the Price of Insulin Soars?, April 16, 2020
Email exchange, Karen Van Nuys, fellow and executive director, Value of Life Sciences Innovation Project, Schaeffer Center, University of Southern California, July 29, 2020
Email exchange, Stacie Dusetzina, associate professor, Vanderbilt University Medical Center, July 28, 2020
Email exchange, Carrie McAdam-Marx, professor, Department of Pharmacy Practice and Science, University of Nebraska Medical Center, July 29, 2020
Email exchange, Natalia Ruiz-Negrón, research assistant professor, University of Utah College of Pharmacy, July 29, 2020
Email exchange, Aaron Kesselheim, professor of medicine, Harvard Medical School, July 27, 2020
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