Senate Finance Committee Publishes Results of Two-Year Investigation into Rising Insulin Prices

On January 14, 2021, Sens. Charles E. Grassley (R-Iowa) and Ron Wyden (D-Ore.), leaders of the U.S. Senate Finance Committee, released the results of their bipartisan investigation into the rising price of insulin, which they launched nearly two years ago.  In the course of its investigation, the committee reviewed more than 100,000 pages of internal company documents produced by the three largest insulin manufacturers (Sanofi, Novo Nordisk, and Eli Lilly) and three major pharmacy benefit managers (PBMs) (CVS Caremark, Express Scripts, and OptumRx).

The committee’s report describes a combination of factors that contributed to the skyrocketing cost of insulin – a drug that has been available for almost a century.  According to their investigation, manufacturers aggressively raised the list price of their insulin products despite no major advances in how the drugs performed.  The report states that two of the manufacturers, Novo Nordisk and Sanofi, would closely monitor the other’s prices and match or top any price increases, a practice referred to as “shadow pricing.”  The report also found that insulin makers were sensitive to ensuring that the PBMs could turn a profit, knowing that if they dropped the list price of their insulin products, PBMs would make less money on rebates and fees, which are based on a percentage of a drug’s list price.  The investigation found that there was little, if any, attempt by PBMs to discourage manufacturers from raising the list price of their products.

Wyden and Grassley authored a prescription drug reform bill intended to provide some relief for insulin patients.  Though the bill was never passed, some aspects were included in the appropriations bill signed into law at the end of 2020.