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Minnesota lawmakers agree on the need for an emergency insulin program. So why hasn’t a deal happened?

press conference
MinnPost photo by Peter Callaghan
Listening to state Rep. Mike Howard, from left: Lt. Gov. Peggy Flanagan, Gov. Tim Walz and insulin advocates Nicole Smith-Holt, Jett Loewy, Alexis Stanley, and others.

It was a press conference similar to so many that had come before. 

Last week, Gov. Tim Walz and DFL lawmakers gathered with people who depend on insulin to manage their Type 1 diabetes. They talked about rapid price increases for the medicine, and the threats to health and life when the hormone becomes unaffordable. They accused the drug companies of greed, and they accused Senate Republican leadership of stubbornness and complicity.

For more than a year, many of the same people had said many of the same things. During that time, diabetics and their supporters had been teased with news of deals to address the issue only to be disappointed. Every deadline has been missed. Every hope for an agreement has been dashed.

Watching the issue play out in St. Paul was especially frustrating for those affected. Negotiators from both parties said they agreed on the need for an emergency insulin program: that costs should be shared by the state and the insulin manufacturers; that there should be an emergency program where diabetics without the ability to pay could obtain insulin at the pharmacy immediately; and that there should be a longer-term program for those without insurance or with high-deductible policies.

And yet, there is still no deal. Why? 

At the heart of the debate: Who should pay? 

The explanation offered by the two sides have to do with Big Pharma — from different perspectives.

“In every one of these areas where we face a divide, Republicans are siding with insulin manufacturers instead of Minnesotans,” said Rep. Mike Howard, the Richfield DFLer and prime sponsor of the Alec Smith Emergency Insulin Act, a bill named for the 26-year-old who died in 2017 while rationing insulin. 

State Sen. Eric Pratt
MinnPost photo by Peter Callaghan
State Sen. Eric Pratt
Added Nicole Smith-Holt, Alec’s mother: “We thought we were getting somewhere after the many months of positive negotiations. But then Pharma got involved and derailed all of the progress that we made.”

In response, Sen. Eric Pratt, the Prior Lake Republican and lead negotiator for Senate Republicans, said the lack of a deal is due to a desire by DFLers and advocates to get revenge on the three main manufacturers of the hormone. 

“We can get this done if there wasn’t this desire to punish the manufacturers,” Pratt said.

Such rhetoric was more apt a year ago, when advocates and DFL leaders took the position that the cost spikes were caused by an industry exploiting a captive and desperate customer base. Because of a doubling and tripling of prices of insulin and supplies, people like Alec Smith — who had just aged off of his parent’s health insurance — took to rationing the medicine. 

Initial DFL plans imposed fees on the industry to pay for an emergency insulin program, something they termed holding Big Pharma accountable rather than punishing them.

Some Republicans in the Senate (though not all) thought the costs should come from state sources. That echoed industry arguments that fees would only increase costs and ultimately hurt diabetics.

Those two viewpoints — briefly muddled when the state Senate unanimously approved fees last spring, only to back away during conference committee — were at least easy to enunciate. But that ended over the summer when Republican Pratt proposed requiring the industry to provide insulin through their existing patient assistance programs and Howard agreed to use state funds for part of the response, especially the emergency program.

Those two significant concessions produced optimism — but still no deal. The fall was spent in public arguments over private meetings, in disputes over deadlines and the size and membership of each chamber’s negotiating teams.

Without a deal in place, House DFLers released a plan last week that absorbs previous agreements on the big points and layers in the DFL position on the details. About a million dollars of state money would go to set up the program, for both the need-it-now emergency plan and the longer-term regular supply. The plan would require the companies to supply insulin to all diabetics deemed economically eligible — up to 400 percent of federal poverty levels or $50,000 for individuals and $100,000 for a family of four. It also would impose fees on the industry for the emergency program supply that could be lessened if the companies provided insulin in those cases as well.

Under the DFL plan, the state would also determine eligibility for the long-term plan, and the companies would be required to fill the supply. Currently, companies make the decision as to who gets help, and advocates have complained that many who seem eligible are turned away. 

Some Republicans have argued that the manufacturers and insurance companies are feeling the heat of public opinion and reducing costs, negating the need for state intervention. The DFL says that should only serve to reduce the number of people who need the programs, not eliminate the need.

The Senate Republican’s last offer was similar to the DFL’s in many of the broader points, though it has higher copays for patients and provides emergency insulin for less time. GOP leaders also oppose fees and think the state should pay for the emergency program from out of the Health Care Access Fund, which is funded with the state’s provider tax. They would also sunset the program at the end of 2023.

DFL to introduce new insulin bill early in 2020 session

“They have a bill drafted. They’re ready to drop it,” Pratt said of the DFL. “We didn’t have a bill drafted because we were still trying to reach consensus. We’ll have a bill drafted and run that through the Senate and we’ll be talking at each other instead of to each other for the next couple of months.”

Pratt said he does think a bill is needed, even if the industry has begun to take steps to reduce costs on patients.

“If they can get on a pharmaceutical assistance plan, that’s awesome,” he said of diabetics with no or inadequate health insurance. 

But some might not, and a state program would have value even if it is just to facilitate the program, he said. And if drug makers try to roll back their programs in the future, the state would still require they fill insulin orders from those eligible for the program.

House Speaker Melissa Hortman
MinnPost photo by Peter Callaghan
House Speaker Melissa Hortman
House Speaker Melissa Hortman said she expects the DFL’s insulin bill, House File 3100, to be among the first that will be taken up by the House after it convenes Feb. 11. She said she thinks the Senate Republicans are interested in reaching a deal.

“It is a convenient story line to say people don’t want a deal. And there are a few people who value combat over resolution,” Hortman said. She also disputes allegations that DFLers would rather take the issue to voters in the fall as a way to portray the GOP as doing the bidding of big drug companies. (A press release sent last week by the DFL-supporting Alliance for a Better Minnesota was headlined: “Senate Conservatives Cave to Big Pharma.”)

“I think Eric Pratt at times has felt like we don’t want a deal. I don’t know how many ways I can say it. There’s nothing more that I want than to stand next to you and announce our deal,” she said. 

But there are limits to how far she will compromise. “Not every deal fails because both sides are being unreasonable. Sometimes one side is being more unreasonable than the other,” Hortman said.

Comments (19)

  1. Submitted by Dennis Wagner on 02/05/2020 - 11:03 am.

    Well looks like the old front door back door trick. The “R’ folks want the $ to come out of state coffers, so if you agree, then you will hear the complaints from the “R” gang, about too much $ being spent on healthcare coming out of state coffers! Just like the TPaw days, the “R” strategy is , keep kicking the problems down the road and solve nothing. But look busy like you are fighting for something, What? we can easily guess or already know.

  2. Submitted by Bob Barnes on 02/05/2020 - 11:52 am.

    I will try this again … why isn’t anyone looking at the big picture? Can Wal-Mart get away with charging customers different prices for the same items? No because it violates Anti Trust laws. So why aren’t those laws being enforced on big pharma, medical facilities, insurance companies and everyone in between?????

    We don’t need another bill… we need the AG to enforce the laws already on the books so that medicine, healthcare and insurance is once again affordable for everyone.

    • Submitted by James Hamilton on 02/06/2020 - 09:50 am.

      What laws are those, sir?

      • Submitted by Bob Barnes on 02/06/2020 - 01:16 pm.

        Sherman and Clayton, McCarren Ferguson, Robinson-Patman to start with at the federal level.

        In MN: Antitrust Code Section Minnesota Antitrust Law of 1971: 325D.49, et seq for starters as well.

        Not only that but they could also use RICO against many of them as well.

        • Submitted by Mike Schumann on 02/09/2020 - 07:27 am.

          I am confused about your argument. Right now the drug companies charge everyone the same high prices. Some people have insurance that covers the cost, some don’t. How does that violate your interpretation of the anti-trust laws?

          The state is proposing that the drug companies change different prices to different folks based on their insurance status and/or ability to pay. With your interpretation of the anti-trust laws, that sounds illegal.

    • Submitted by RB Holbrook on 02/06/2020 - 10:40 am.

      “Can Wal-Mart get away with charging customers different prices for the same items? No because it violates Anti Trust laws.”

      No, because it only violates antitrust laws if the intention is to harm customers. There is minimal competition in the realm of insulin manufacture, as different types are manufactured by different companies and prescribed for different uses.

      A certain local gas station gives me a discount because I buy groceries at a certain store. Those who shop elsewhere have to pay more. That is price discrimination, but it is not illegal.

      • Submitted by RB Holbrook on 02/06/2020 - 12:09 pm.

        “No, because it only violates antitrust laws if the intention is to harm competition.”

        Filed under D for “D’oh!”

      • Submitted by Bob Barnes on 02/06/2020 - 01:23 pm.

        That is not true. Read the Sherman and Clayton Anti Trust acts. Any attempt to price fix or restrain trade (whether successful or not) falls under anti trust. That also includes keeping competitors out of the market.

        Insulin has been around for many decades. There is zero reason the price should go up. In fact, the markets over time would see prices go down naturally due to more efficient processes and better technology.

        My initial comment centered more around healthcare in general. Like doctors charging Medicare patients one price and charging privately insured patients many times (as much as 10x or more) that price for the exact same service. That is 100% illegal under existing anti trust laws.

        • Submitted by RB Holbrook on 02/06/2020 - 02:09 pm.

          “Any attempt to price fix or restrain trade (whether successful or not) falls under anti trust.”

          A seller is free to set their own prices. “Fixing,” as it is used in the antitrust laws, refers to an agreement to set prices at a particular level. Discriminatory pricing at the consumer level will rarely, if ever, be an antitrust violation.

          Restraint of trade is an entirely different matter. I recommend you crack open that Gilbert’s antitrust outline.

    • Submitted by BK Anderson on 02/08/2020 - 11:54 am.

      Well, let’s see. Ellison was declared by MN conservatives to be a progressive activist who would institute baseless political lawsuits and harm the “business climate”. While Ellison himself said he was running to protect consumers from corporate abuses.

      And now it’s your considered position that his office possesses an open-and-shut case of “discriminatory pricing” against drug manufacturers[!] on an issue roiling MN politics for a year (while threatening the lives of many), but that he is willfully and incompetently declining to bring it for no good reason? Seriously?

      I wish “conservatives” could get their stories straight!

  3. Submitted by Eric House on 02/05/2020 - 12:39 pm.

    Its amazing that the Rs pushing back on these mystery ‘costs’ that the pharma companies are complaining about? Please- there’s no R&D, and production has been figured out for decades.

    So why exactly can’t the pharma companies return their insulin costs back to rational levels?

  4. Submitted by David Markle on 02/05/2020 - 03:44 pm.

    I haven’t seen a clear-cut explanation of why the price has increased so radically since the days when horses were used to make insulin.

    • Submitted by James Hamilton on 02/06/2020 - 09:58 am.

      There have been advances since those days. However, any R&D costs have long since been recovered. Retail costs are what they are because of avarice and the way the pricing game is played. Prices are set artificially high because producers know large health insurers and distributers will demand discounts. Those discounts are granted to the few, subject to tight confidentiality agreements which prevent others from knowing what going rates actually are. Those without medical insurance are asked to pay the sticker price unless they can enroll in a manufacturer’s discount program that offers some small reduction in the sticker price but still requires a higher payment than the going rate.

      Advertising, commissions, and lobbying costs, among other things, contribute to it all.

  5. Submitted by Tom Anderson on 02/05/2020 - 09:42 pm.

    Part of the problem is that had Alec been granted an emergency 30 day supply of insulin, he would have needed another one 30 days later, and 30 days later. He would not have been alone. Perhaps the answer is to allow children to remain on their parent’s insurance until the parents no longer have insurance at which point they might be on Medicaid. It might also be a good idea for physicians to state that rationing insulin is not a viable treatment. And then there is the “what about other necessary drugs?’ argument.

  6. Submitted by Ron Gotzman on 02/06/2020 - 08:31 am.

    I thought Obamacare solved these problems?

    • Submitted by James Hamilton on 02/06/2020 - 10:02 am.

      Pardon my yawn. The ACA was intended as a beginning, not a complete solution. We’ll never know where it might have taken us absent GOP efforts to undermine the attempt.

      It’s more than a bit ironic that the GOP has finally come on board the effort to control drug prices at the same time it seeks a court determination invalidating the ACA. Why, some GOP legislators have actually called for the use of (gasp!) state funds!

    • Submitted by RB Holbrook on 02/06/2020 - 10:41 am.

      Is that why Republicans want to repeal it?

  7. Submitted by James Hamilton on 02/06/2020 - 09:49 am.

    Just get it done and then move on to address the wider issue of prescription drug profiteering.

  8. Submitted by BK Anderson on 02/08/2020 - 10:10 am.

    Just another great benefit of “divided government”!

    The market failed or was manipulated by the CEOs and thus the (admittedly) heavy hand of government was required to step in and rebuke the market, despite its cries and objections–especially when people’s lives were at stake.

    But “conservatism” will not permit government to function. Put another way, its primary mission is to ensure government failure. As an ideology, conservatism exists not for people, but for business interests, to glorify and lionize the “market” and plutocrats. Voting for conservatives means voting for a paralyzed government. That’s the lapel pin of every conservative candidate.

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