Measuring the Impact of Price Ceiling Controls: A Case Study of Insulin Out-of-Pocket Caps

PROJECT SUMMARY Over 30 million Americans have type 1 diabetes (T1D) or type 2 diabetes (T2D), a disease with significant effects on morbidity and mortality1 that disproportionately affects non-White adults and low-income populations.2,3 For diabetes patients, tight glycemic control can reduce the risk of micro- and macrovascular

complications, ultimately reducing lifetime health care costs and improving longevity and quality of life.4 To achieve tight glycemic control, patients rely on various medications and different formulations of insulin.5 List prices for insulin more than tripled from 2007 to 2018.6 The list price is often used to determine cost sharing

amounts for patients. In 2017, an estimated one-quarter of insulin-using individuals with diabetes reported insulin-underuse due to out-of-pocket costs.7,8 Furthermore, insulin-underuse is more common among Black and Hispanic populations,9 a fact that raises equity concerns regarding health care access and outcomes.

State policymakers have responded to insulin affordability issues by capping insulin out-of-pocket costs. Colorado was the first state to do so on January 1, 2020.10 Following Colorado, an additional 24 states plus Washington, DC have passed such caps.11 These caps standardize the price patients pay for insulin and may

enable T1D and T2D patients to switch to clinically preferred products that were previously unaffordable. Yet, capping out-of-pocket costs for insulin and not other medications to manage T2D may induce patients with T2D to use insulin rather than more expensive medications with better cardiorenal protective effects. We

explore the market effects of insulin out-of-pocket caps through 3 aims: • Aim 1. Measure the effect of state-level caps on insulin out-of-pocket costs on changes in the use of clinically preferred insulin products to treat diabetes. • Aim 2. Measure the effect of state-level caps on insulin out-of-pocket costs on changes in the use of

clinically preferred non-insulin products to treat type 2 diabetes. • Aim 3. Identify key patient considerations regarding choice of treatments for managing T2D given a state- level cap on insulin out-of-pocket costs. We will accomplish Aims 1 and 2 with difference-in-differences analyses using a 25% sample of claims and

enrollment data from IQVIA PharMetrics Plus for the time period of 2018-2022. We will accomplish Aim 3 using qualitative focus groups. Aim 3 will inform interpretation of the findings from Aim 2 by, for example, providing preliminary evidence for whether patient preferences for T2D treatment diverge from clinical recommendations

due to affordability considerations. In addition to providing specific findings in the context of an insulin out-of- pocket cap and diabetes care, the output from this grant will provide a methodology we can apply to measure the effects of other price ceiling policies, such as Medicare's annual out-of-pocket cap for Part D drugs.