(CNN) – Health insurer Cigna is launching a program that will cap out-of-pocket expenses at $25 for a 30-day supply of insulin, the company said Wednesday. Last year, patients paid an average of $41.50 a month out of pocket, including deductibles, copays or coinsurance, for the lifesaving diabetes drug, the company said.
The Patient Assurance Program will be available to members of participating non-government-funded pharmacy plans managed by Express Scripts, including Cigna and other plans. Cigna acquired Express Scripts, the largest US pharmacy benefit management company, in December.
“In most cases, people who use insulin will see lower out-of-pocket costs without any increased cost to the plan,” the company said.
The move follows the US Food and Drug Administration’s announcement Tuesday that it intends to bring competition to the insulin market as a way to lower prices. Commissioner Dr. Scott Gottlieb said the FDA would change how insulin is regulated in order to enable products that are biosimilar to (or interchangeable with) insulin to come to market.
Biologics are typically isolated from a natural source and may be produced through biotechnology and other cutting-edge technologies, Gottlieb explained: “Once an interchangeable insulin product is approved and available on the market, it can then be substituted for the reference product at the pharmacy, potentially leading to increased access and lower costs for patients.”
People with diabetes are prescribed insulin because their bodies either do not produce it (as with Type 1 diabetes) or do not use it properly (as with Type 2 diabetes). There are more than 20 types of insulin sold in the United States, according to the American Diabetes Association.
About 31% of American adults with diabetes reported taking insulin in 2011, according to the US Centers for Disease Control and Prevention, while the diabetes association reported that 23.1 million Americans had been diagnosed with diabetes in 2015.
A report from the Health Care Cost Institute, an independent research group funded by four health insurance companies, found that individuals with Type 1 diabetes spent, on average, $5,705 per person on insulin in 2016, an increase of $2,841 since 2012. “The price of all types of insulin and insulin products increased, with point-of-sale prices roughly doubling on average between 2012 and 2016,” said the institute, which holds data on over 50 million commercially insured individuals per year.
Between 2010 and 2015, the cost of Humulin R U-500, an Eli Lilly product, experienced the largest price increase (380%), jumping from $15 to $72, according to Kaiser Family Foundation, a nonprofit news service focused on health-care policy.
Eli Lilly did not respond to requests for comment on Cigna’s announcement but said last month that it had created insulin lispro, a generic version of a faster-acting and more expensive product called Humalog U-100, “to provide a more affordable option for certain Americans in high-deductible health insurance plans, the uninsured and seniors that hit the coverage gap in their Medicare Part D plans.”
The generic would sell for half the price of Humalog U-100, which costs $135 per month for patients who take an average amount, according to the company.
Insulin pricing in the United States is driven by a supply chain consisting of manufacturers, wholesalers, pharmacy benefit managers, insurers and pharmacies, according to the American Diabetes Association: “In much of Europe, insulin costs about a sixth of what it does in the United States.”
At a US House of Representatives subcommittee hearing on insulin pricing Tuesday, Aaron Kowalski, chief mission officer of JDRF, a nonprofit diabetes research funding organization, called for the elimination of rebates — which make up more than 70% of the list price of insulin — from the drug reimbursement system.
“In the current system, companies give discounts to pharmacy benefit managers and health plans while increasing prices at the pharmacy counter,” he said. He also believes that manufacturers need to lower list prices and restrict increases to “no more than the consumer price index.”
“If this occurs, we believe that strong competition among insulin manufacturers will quickly push them to lower prices to net levels, which will greatly benefit patients who need this drug to survive,” Kowalski said.
Cigna’s new pricing scheme is “a step in the right direction,” added Cynthia Rice, a senior vice president at the nonprofit, in an email.
President Donald Trump campaigned on a promise to lower drug prices and posted his blueprint for doing so in May. One of the primary intentions of the plan is to increase competition while allowing the federal government to negotiate Medicare drug prices directly.