Did the administration consider the value of innovative diabetes medicines in price setting process?

Throughout this first round of the price setting process under the Inflation Reduction Act, one concern keeps rising to the top: Is the administration factoring in feedback from patients and physicians when making pricing decisions? As we begin to see the very real impacts of this flawed and politicized process unfolds, we’re taking a closer look at how biopharmaceutical innovators bring enormous value across the therapeutic areas recklessly targeted for government price setting this year.

Up first, we examine the continued transformation and advancement in medicines for patients living with diabetes. Several of the first 10 medicines subject to government price-setting are diabetes medicines.

The impact: Nearly 40 million Americans live with diabetes, and more than 1 million Americans are diagnosed with the disease annually.

• Americans over the age of 65 make up almost half (16.5 million) of all individuals with the disease.
• Diabetes is the eighth leading cause of death in the United States.
• The total cost of the disease reached nearly $413 billion in 2022, including $306.6 billion in direct medical costs.

How far the industry has come: Decades of investments by biopharmaceutical companies to advance new treatments are helping diabetes patients better manage this debilitating and costly chronic illness.

• Early insulins were derived from cows and pigs and lasted only a few hours. Today, advanced insulins more closely resemble insulin as it is naturally released by the body, allowing for more effective blood glucose control for patients and more convenient dosing options to support better adherence and treatment outcomes.
• Advancements to rapid-acting insulins have enabled dosing with meals or even after meals, rather than in anticipation of them, helping patients better manage their diabetes and avoid serious complications.
• Nearly 4 million Medicare beneficiaries rely on Sodium-glucose Cotransporter-2 (SGLT2) inhibitors, which help reduce the risk of cardiovascular death and kidney disease.
• Dipeptidyl Peptidase 4 (DPP-4) inhibitors are an important treatment option for diabetics who have kidney disease or are on dialysis.

Access to diabetes treatments makes a difference: Improved adherence to diabetes treatment(s) can help patients avoid ER visits and hospitalizations, reduce Medicare spending and lower spending on other health care services. In short, treatments improve patient outcomes and save costs across the health care system.

IRA threatens the progress on the horizon: More than 60 potential new diabetes treatments are in the R&D pipeline, but the IRA’s price setting provisions will have a long-term impact on drug development. Vital Transformations looked at the next 10 years, and conservatively estimates as many as 139 medicines are at risk of not being developed because of the IRA. That could mean fewer advancements in diabetes treatments.

The bottom line: Government price setting puts at risk this progress and the ability for chronic disease medicines to drive savings in our health care system.

Diabetes patients are living longer and with greater control of their disease thanks to new and better treatments. All these enhanced treatments were possible because of a policy environment that encourages risk-taking and recognizes the value these innovative treatments provide. The price setting provisions of the IRA, however, discourage R&D and threaten future advancements.

Learn more about how price setting can undercut the immense value new medicines provide.