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Eli Lilly Insulin Price Cap: What Other Companies Are Doing

  By - Stephen   On 2023-03-02T23:03:09

Facing pressure to curb diabetes-treatment costs, Eli Lilly & Co. announced on March 1 that it is slashing insulin prices and immediately capping the out-of-pocket cost of all of its insulins at $35 a month. President Joe Biden, who made insulin costs a focus of his State of the Union speech last month, praised the move by Lilly and called on other drugmakers to also lower insulin prices.

The price cuts by the Indianapolis-based Lilly, one of the world’s top three insulin producers, are expected to provide critical relief to the millions of Americans who rely on the medicine to control their blood sugar levels. So far, none of the other major insulin manufacturers have announced new price caps in light of Lilly’s announcement, but health policy experts say its competitors are now facing increasing pressure to respond.

“These are hard issues to ignore when the President and advocacy groups are constantly talking about it,” says Nick Fabrizio, professor of health policy at Cornell University. “There’s a lot of pressure on trying to come up with a pricing strategy that appears more responsive to people’s economic struggles.”

Aside from Eli Lilly, other top insulin makers include French drugmaker Sanofi and Danish pharmaceutical company Novo Nordisk. The three companies control about 90% of the U.S. insulin market. Representatives for Sanofi, which makes Apidra and Lantus insulin, and Novo Nordisk, which makes NovoLog and Levemir insulin, each told TIME that they offer programs that limit costs for people with and without coverage, but would not say whether they plan to follow Lilly’s move.

Lilly’s changes come at a time of mounting pressure on private drug companies to rein in their prices, which have skyrocketed in recent years and placed a heavy burden on lower- and middle-income people, who may ration or skip doses of their medication to save costs. For some patients, out-of-pocket payments for insulin on high-deductible insurance plans can exceed $1,000 a month, though most patients pay much less. A 2018 estimate from the Rand Corporation, a public policy think tank, found that the average list price for one vial of insulin in the U.S. was $98.70.

Read More: Why Insulin Is So Expensive in the U.S.—And What the Inflation Reduction Act Does About It

The cost to manufacture insulin has not increased, according to Amitabh Chandra, a professor of public policy and business administration at Harvard. The average net cost of the most commonly used insulins is 20% lower today than in 2007, according to a study commissioned by the Pharmaceutical Research and Manufacturers of America, or PhRMA. Health policy experts often cite “evergreening” as the reason why insulin is so expensive, in which manufacturers slightly change the formulation or the delivery method of a drug in order to extend their patents and discourage generic drugs from being developed.

How Eli Lilly’s price cap works

Under Lilly’s new pricing plan, its most commonly prescribed insulins—Humalog and Humulin—will cost 70% less in the fourth quarter, which starts in October. The current list price for a 10-milliliter vial of the fast-acting, mealtime insulin Humalog is currently $274.70 and will fall to $66.40, while the same amount of Humulin will drop from $148.70 to $44.61. Lilly also announced that it will cut the price of its authorized generic version of Humalog to $25 a vial, down from $82 a vial, starting in May.

“Patients should have a consistent and lower cost experience at the pharmacy counter,” David Ricks, Eli Lilly’s CEO, said on a press call Wednesday. He added that the decision came as a result of conversations between the company and members of Congress about the cost of the medication. But while the moves were celebrated by many, others felt the announcement came too late, and noted that there’s nothing stopping Lilly from raising prices again in the future.

More than 30 million Americans have diabetes, and more than eight million of them rely on insulin to control blood sugar levels, according to the American Diabetes Association. Without it, patients can die or face serious health consequences, including amputation and kidney failure.

What other insulin makers are doing

A Sanofi spokesperson said that the company has a savings program to help people reduce their diabetes-drug prescription costs, limiting costs for most patients who are commercially insured to $15 or less a month. Those without insurance can also get Sanofi insulin at reduced prices or for free, the spokesperson said.

A Novo Nordisk spokesperson said that the company sells a version of its insulin for $25 a vial at Walmart, and provides one-time, 30-day supplies to people at risk of rationing their insulin. “Novo Nordisk will continue to listen and assess to help us understand emerging patient needs and focus on sustainable solutions in an evolving healthcare system,” the spokesperson said.

In addition to the mounting political pressure to lower insulin prices further, drugmakers also face the threat of competition from outside the industry. Mark Cuban Cost Plus Drug Co., for example, sells low-cost drugs online, and Civica Rx, a nonprofit company in Lehi, Utah, has said that it plans to make and sell generic versions of insulin to consumers at no more than $30 a vial and no more than $55 for a box of five pen cartridges. The state of California also plans to make low-cost insulin.

Fabrazio says executives at Sanofi and Novo Nordisk are likely meeting this week to discuss whether they can afford to implement price changes similar to Lilly. “They’re going to try to identify the drugs where they can still maintain a good profit while showing the nation that they are being responsible and responsive,” he says. “Another company is going to make a move, and then another one. No one wants to be the last.”

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Author: Stephen

Stephen is an internationally acclaimed business news journalist with 20 years of experience in the industry. Having worked for some of the most prestigious newspapers, magazines and news organizations, Stephen has become a respected leader in international business news. His writing has been featured in publications such as The Wall Street Journal, The Financial Times, The New York Times, and Bloomberg. Stephen has also appeared as a commentator on several radio and television programs, including CNN, CNBC, and Bloomberg TV. He is a sought after public speaker, appearing regularly at conferences and industry events to discuss the latest business news. With his wealth of experience, Stephen is an invaluable resource for anyone looking to stay up to date on the latest international business news.

Top Liked Comments:

Rubi Fleishman

2022-06-01 06:12

Thanks for the valuable advice!

Joan Buresh

2022-09-06 17:00

Thanks for the useful information!

Georgianna Roberie

2022-12-28 08:12

This was so interesting to read!

Samatha Ramage

2022-01-30 02:36

This was a great post, thanks!

Lyndia Wrona

2022-01-26 20:50

I'm so glad I read this article!

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