Study shows significant drop in insulin costs after Colorado price caps

Diabetes affects millions of Americans, with 1.4 million new cases diagnosed each year. This chronic condition is one of the leading causes of death in the United States and accounts for more than $320 billion in annual health care costs.

In addition, insulin has become more expensive, with the cost of some formulations increasing by nearly 600 percent in recent years. Increasing costs creates a financial burden and may even induce patients to ration insulin, which can have negative health effects. To address this, Colorado passed a law in 2019 capping monthly out-of-pocket costs at $100 for state-regulated health insurance plans. Colorado was the first state to pass such a law, and other states and the US federal government have since enacted insulin price caps.

Until now, however, little research has been conducted on the effects of this law. In a new article at Health mattersDr. Benjamin Ukert, assistant professor in the Department of Health Policy and Management at Texas A&M University School of Public Health, and colleagues analyzed insulin prescription data from the Colorado All Payer Claims Database to determine the effects of insulin cost containment of state law.

Ukert and colleagues used data on pharmacy claims for insulin prescriptions from 40 commercial insurance companies, Medicare, Medicare Advantage and the state Medicaid program, Health First Colorado, from January 2018 to December 2021. This gave the researchers two-year periods before and after Colorado’s insulin restriction law went into effect. The researchers calculated adjusted out-of-pocket costs per 30-day supply of insulin and created a variable indicating whether the 30-day cost was greater than $100 or not. Ukert and colleagues also used demographic data such as age, gender, and rural residence in their analyses.

Their analysis found that average out-of-pocket costs for insulin dropped by about 40 percent in the two years after the law was passed. Annual savings were highest for children and adults aged 18 to 34, and rural patients saw greater savings than those in non-rural areas.

We found that patients had significantly higher out-of-pocket costs earlier in the year before the law was passed, likely due to failure to meet insurance plan deductibles. This volatility has decreased since the introduction of the cap.’

Dr. Benjamin Ukert, Assistant Professor, Department of Health Policy and Management, Texas A&M University School of Public Health

The researchers also found that the number of prescriptions and days filled increased after the law was passed, indicating that some patients may have been filling insulin doses before the cap.

A multi-situation analysis is required

Although the results of this study show clear effects from the 2019 law, they are limited by the study’s single-state focus. Other states with different policies and patient demographics may have different results. However, these findings are consistent with similar research on insulin prescriptions following the passage of the $35 federal cap on insulin costs for Medicare Part D patients beginning in January 2023. The researchers also note that there could be other factors that affected insulin values. Further research investigating other factors and including multiple conditions could further elucidate the effects of insulin peaks.

“In short, we found that cost containment in insulin prescriptions can increase patients’ ability to take the full amount of the prescribed drug, which can reduce the potential for complications and the additional need for health care services,” Ukert said. .

He noted, however, that the Colorado law only applies to state-regulated insurance companies and does not target uninsured patients. Further policy work will be needed in these areas, and the findings of this study and future related research will help inform policymakers as they strive to improve health outcomes and reduce health care costs.