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Cap on insulin said to save $18.6 million a year for more than 36,000 Virginians

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Sen. Chap Petersen, D-Fairfax, left, confers with Sen. Joe Morrissey, D-Richmond, right, during the floor session of the Virginia Senate inside the State Capitol in Richmond in March.

RICHMOND — More than 36,000 Virginians with diabetes will collectively save $18.6 million a year on the purchase of insulin under federal legislation that capped the out-of-pocket cost at $35 a month, effective on Jan. 1 for most Medicare members, a federal agency says.

The cap, part of the Inflation Reduction Act that President Joe Biden signed into law last year, would save the average Virginian an estimated $510 a year on insulin, according to a national study that the White House released on Tuesday morning.

The cost cap went into effect on Jan. 1 for Medicare members with prescription drug coverage under Part D and Part C Advantage plans. The cap will apply on July 1 for people with Medicare coverage for insulin pumps under the durable equipment provision of Part B for health care providers.

“It’s monumental,” said Jim Dau, director of AARP of Virginia. “This is a big, big issue.”

In fact, Dau said for AARP’s one million members in Virginia, “The number one issue is prescription drug prices.”

That’s why two Virginia legislators say they are proposing a “prescription drug affordability board” to oversee the prices of drugs dispensed through state health plans and programs to control costs, based on upper price limits set by the federal government.

“We ought to be using that information to save money,” said Sen. Chap Petersen, D-Fairfax City, who introduced Senate Bill 957, which is pending before the Senate Finance & Appropriations Committee.

On Tuesday, a House of Delegates subcommittee killed a companion bill introduced by Del. Karri Delaney, D-Fairfax, to create the board. A subcommittee of the House Commerce and Energy Committee recommended killing House Bill 1596 on a party-line vote after hearing opposition from, among others, pharmaceutical manufacturers and Gov. Glenn Youngkin’s administration.

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“We don’t think a part-time board should regulate this industry, a very sophisticated and complicated industry,” said Deputy Secretary of Health and Human Resources James Williams, who told the subcommittee that the administration “strongly opposes” the bill.

The federal cap on insulin is one of the first benefits that Medicare members are seeing from the Inflation Reduction Act, which also set an out-of-pocket cap on the cost of prescription drugs, effective in 2025, and directed the Centers for Medicare and Medicaid Services to begin negotiating the price of certain prescription drugs with manufacturers in 2026.

A study by the U.S. Department of Health and Human Services estimated Tuesday that more than 1.5 million Americans would save $761 million for members of both Part D and Part B plans, or $501 a year per person, compared with what they paid in 2020. The study used data from a 2019 survey on spending for insulin and applied it to Medicare claims data in 2020.

“That’s more money in seniors’ pockets and more breathing room for American families,” Biden said Tuesday in response to the study findings.

About 37 million Americans suffer from diabetes, or about 11% of the country’s population, the study found. About 7 million use insulin daily to manage their blood sugar levels and control the effects of the disease.

In 2019, Americans paid an average of $58 to fill a prescription for a 30-day supply of insulin. People with no insurance paid an average of $123 for their monthly supply, while those with private insurance or Medicare paid $63 per month and those under Medicaid paid just $6. Almost two-thirds of people who fill monthly insulin prescriptions have to pay an out-of-pocket share of the cost, and one-third pay more than $35 a month.

The numbers were slightly higher for Medicare members, with almost 69% paying out of pocket and 37% paying more than $35 per refill. Almost one-quarter of Medicare members paid more than $70 to refill their monthly insulin supply, the study found.

“Prescription drugs are the poster child for inflation,” said Dau at AARP.

Biden signed the bill into law after drug companies had set their plans and rates under Medicare Part D, so Dau said some people may have trouble taking full advantage of the cap the first year. However, he said the government has created a special enrollment period for Medicare members this year to compare plans under Part D.

Dau also recommended that people seek help with the benefit by calling the federal Medicare agency at 1-800-633-4227 or the Virginia Insurance Counseling Assistance Program at 1-800-552-3402.

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