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Biden Freezes Rule on Insulin at Community Health Centers

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Biden Freezes Rule on Insulin at Community Health Centers

The cost of insulin has steadily risen in the United States in recent years and decades — even the cost of varieties of insulin that have been on the market for a while. In the last couple of years, some U.S. states and private businesses — including the insulin manufacturers themselves — have taken some steps to address the insulin cost crisis, but these measures haven’t fully addressed the situation. So far, the federal government hasn’t taken many steps to try to lower the cost of insulin. But one exception was a rule, published in December 2020 and set to take effect on January 22, that would have required federally-funded community health centers to make insulin available to low-income patients at the same price that they pay for insulin.

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But that rule was immediately put on hold by the administration of President Joe Biden upon his taking office on January 20. Here’s why the new administration froze the new rule, and what this means for community health center patients with diabetes.

Potential for centers to lose money

As noted in a Healio article on the pausing of the new rule, it wasn’t actually singled out for freezing. Instead, it was part of a sweeping action the Biden administration took to pause the implementation of federal rules for 60 days, so that agencies under the new administration could review them. But since January 20, representatives of community health centers have spoken out about why they view the now-paused rule as misguided and possibly damaging.

The rule would have required federally funded community health centers that receive insulin and injectable epinephrine through the federal 340B drug pricing program — which gives these health centers a discount — to charge low-income patients the same price paid by the health centers. This sounds good in theory, of course — but practically, health center representatives say, it would have created a huge administrative burden by making these centers calculate the cost they paid for every single insulin prescription, and charging patients that same cost. And, of course, they would have to pay the cost of this administrative burden themselves — so they would lose money with each insulin prescription.

“We are deeply grateful the Biden Administration put the brakes on such a harmful rule within hours of taking office,” wrote Tom Van Coverden, President and CEO of the National Association of Community Health Centers, in a press release. “Certainly, the high cost of prescriptions remains a national crisis — but health centers are already part of the solution to this problem, and the regulation would have burdened them with excessive red tape without doing anything to lower how much drug companies charge for drugs.”

Van Coverden noted that health centers are using the discounts provided by the 340B program as Congress intended when it created the program — to cover the cost of processing and filling prescriptions, serving low-income people and others without insurance who rely on these centers. Community health centers already provide discounts to patients who earn less than 200% of the federal poverty line, adjusting fees on a sliding scale. All federally funded community health centers are nonprofit.

Other ways to lower insulin costs

The pausing of the rule affecting community health centers indicates that the Biden administration may be shifting its focus to other ways to reduce insulin costs for a larger share of the population, rather than just the mostly low-income and uninsured people who get care through these centers.

But many actions that the federal government could take would require action by Congress, since the president has only limited powers to adjust existing federal programs. Possible steps that Congress could take include directly limiting how much pharmaceutical companies can raise the price of insulin each year, limiting the use of rebates offered to pharmacy benefit managers (PBMs) that result in price increases to offset “discounts,” and letting the federal government negotiate drug prices directly with pharmaceutical companies.

While any of these policies could have a major impact on insulin prices, any action by Congress would likely depend on sustained pressure from the diabetes community — and the wider general public — as Congress considers legislation to reform the healthcare system in the coming months and years.

Want to learn more about saving money on insulin? Read “Insulin Prices: Four Ways to Pay Less” and “Cheaper Insulin: Older Insulins May Be Answers to High Prices.”

Quinn Phillips

Quinn Phillips

Quinn Phillips on social media

A freelance health writer and editor based in Wisconsin, Phillips has a degree from Harvard University. He is a former Editorial Assistant for Diabetes Self-Management and has years of experience covering diabetes and related health conditions. Phillips writes on a variety of topics, but is especially interested in the intersection of health and public policy.

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