Insulin Costs May Be Capped in a Medicare Program

Sanofi, one of the three insulin manufacturers, said Wednesday that it would participate in the program. “We believe their plan, based on shared contributions from both manufacturers and Part D plans to directly lower out-of-pocket costs for Medicare beneficiaries, is the right approach,” Ashleigh Koss, a Sanofi spokeswoman, said in a statement, referring to the Part D drug coverage plans operated by private insurers. The two other insulin manufacturers, Eli Lilly and Novo Nordisk, did not immediately comment.

People who are covered by Medicare’s drug benefit program are particularly exposed to the rising list price of drugs because they enter several different phases of coverage, including an initial deductible phase in which they must pay close to the list price of a drug. Later in the year — after they and their plan have spent $4,020 on drugs — they enter a coverage gap (called the “doughnut hole”) in which they pay 25 percent of the drug’s price.

Under the proposed plan, those who need insulin would pay no more than $35 for a typical 30-day supply, no matter which phase of coverage they were in.

In reaction to government and public concerns, manufacturers have taken steps like offering discount plans and, in the case of Eli Lilly, selling a half-priced generic version of the brand-name Humalog.

Pharmacy benefit managers, which negotiate drug prices on behalf of insurers and large employers, have also offered plans that limit out-of-pocket costs. Last year, Express Scripts began offering a $25-a-month cap for all diabetes medications, including insulin, for employers who opted into the program.

In January, CVS began offering a zero co-payment program for insulin. CVS said that its members paid, on average, more than $400 out of pocket per year for diabetes medications, with about 12 percent paying more than $1,000 per year.

Ms. Verma said that until now, federal rules discouraged the private insurers who run the Medicare drug plans from offering a more consistent co-payment for insulin and other drugs. That’s because if the insurers limited the amount the consumer paid during the coverage gap, the plans would no longer get the 70 percent discount that manufacturers provide during that doughnut hole. Under the proposal, the pilot program would waive that restriction and would allow the manufacturers and insurers to negotiate more freely.