In Bipartisan Insulin Pricing Inquiry, DeGette and Reed Explore Value-Based Contracting Options

Apr 24, 2018

Washington, DC – There are multiple barriers to reducing the surging cost of insulin; Congressional Diabetes Caucus co-chairs Diana DeGette (D-CO) and Tom Reed (R-NY) have found that value-based contracting is one avenue that is worth exploring. DeGette and Reed today released the latest insights from their outreach to stakeholders as part of their ongoing investigation of insulin costs.

“Our inquiry into insulin pricing is producing valuable insights that will inform policy proposals to lower the cost of insulin for diabetics and their families,” DeGette and Reed said. “As with any information-gathering process, we expect to hear about challenges and suggestions as to how we can make drugs more affordable. Having a better understanding of these obstacles is necessary for crafting solutions that provide much-needed relief for the millions of Americans living with diabetes.”

Last November, the legislators issued a Request for Information posing a series of questions to a variety of participants along the drug supply chain. The RFI sought views on the merits of value-based contracting (VBC), a relatively new system that sets the cost of a drug based on its efficacy, and asked stakeholders whether this model could be applied to insulin.

The information received from the respondents, though encouraging, reveals many barriers to achieving lower insulin prices.  Two stakeholders reported already having VBC programs, while most agreed that developing these contracts is challenging given the biology of diabetes and its typical care regimen.

Given the many components in a typical diabetes care plan, including diet, exercise, and medication adherence, insulin dosing is highly patient-specific, making it difficult to measure outcomes necessary for VBC arrangements.

The stakeholders also pointed to administrative and operational barriers, lack of technological infrastructure, and challenging or vague regulations as obstacles to implementing value-based contracting programs for insulin. If these contracts were to be fully utilized, many of the respondents suggested setting pricing based on metrics such as A1C levels, and adherence to one’s insulin regimen and other forms of treatments.


Read the key findings here