Eli Lilly said it is slashing the prices of commonly prescribed insulin by 70 percent while capping related out-of-pocket costs at $35 a month, a sweeping move meant to help lower prices after years of growing public outrage about the high cost of diabetes care.
Last year’s Inflation Reduction Act capped insulin costs for seniors with Medicare beginning in January. In a statement, President Biden lauded Eli Lilly’s announcement and called on other pharmaceutical companies to follow suit to reduce the burden on younger Americans.
“Last year, I signed a law to cap insulin at $35 for seniors and I called on pharma companies to bring prices down for everyone on their own. Today, Eli Lilly did that,” Biden said in a statement. “It’s a big deal, and it’s time for other manufacturers to follow.”
The two other major insulin producers, Novo Nordisk and Sanofi, have not indicated plans to follow Lilly’s lead.
Adam Gaffney, a pulmonary specialist at Harvard Medical School, called Eli Lilly’s decision “meaningful.” He is the lead author of a paper last year that found more than 1 million American adults with diabetes have rationed their use of insulin in the preceding year. He credited activists with compelling Lilly’s shift, and said it proved that prices were artificially high.
“This shows that the price of insulin can be lower, and corporations could have lowered it many years ago,” he said.
Lilly’s action could cascade through the health-care system and bring down costs more broadly, experts say. “To have a significant reduction in list prices for certain insulins is going to benefit people who use them, and everyone else who pays for the high price of insurance premiums,” said Peter Maybarduk, who heads Public Citizen’s access to medicines program.
Lilly has come under intense public pressure to lower its insulin prices and activists claimed victory with its announcement Wednesday. “We’re enjoying this victory but there’s still work to do,” said Sa’Ra Skipper, an insulin-for-all advocate in Indianapolis who has Type 1 diabetes. “We need to double and triple check to make sure that this insulin stays stocked in drugstores,” she added.
David Ricks, Lilly’s chief executive, acknowledged in an interview that the company could have taken this action sooner. He noted Lilly hadn’t raised insulin prices since he became CEO in 2017. The company has called on its competitors to reduce its prices as well.
“I see today as more of a continuation of a seven-year journey we’ve been on to improve insulin affordability and access,” he said. “When products are older, they should get cheaper.”
The passage of last year’s Inflation Reduction Act shifted industry norms in a way that Lilly had lobbied for, he said.
“It made it a little easier to cause these price reductions to happen without sacrificing the good access that many people have through regular insurance,” Ricks said.
The company’s nonbranded insulin, Insulin Lispro Injection, will drop from $82.41 to $25 per vial, making it the lowest-priced mealtime insulin available, according to the company. Humalog, its most commonly prescribed insulin, will drop 70 percent from its price of $530.40 for a five-pack of insulin pens to roughly $160. Lilly is also launching a new insulin product it calls Rezvoglar, which it says is interchangeable with medication by competitor Sanofi but costs 78 percent less.
Lilly’s announcement marked a shift for the company in both policy and tone on insulin pricing. At an investor conference in May 2021, Michael Mason, head of the company’s diabetes division, said anyone could get Lilly’s insulin for no more than $35 a month and most people paid less.
“Despite what you may hear on the news, the actual out-of-pocket cost for people on insulin is rather low,” he said, according to a recording of the call archived by S&P Capital IQ.
Ricks said Wednesday that those comments referred to a rebate program the company offered that allowed certain people with commercial insurance to get a coupon. Now, he said, the prices will be automatically adjusted by pharmacies participating in the company’s program — some 45,000 outlets, he said — and will apply to Lilly’s insulin regardless of whether it is a given insurance company’s preferred product.
Insulin is an important hormone, made by the pancreas, that helps glucose enter red blood cells, where it is used for energy. People with diabetes have a chronic insulin deficiency and typically take regular injections to stay healthy. About 37 million Americans live with diabetes, according to the latest data from the U.S. Centers for Disease Control and Prevention, though some use other methods to control their blood sugar.
People with Type 2 diabetes take insulin to regulate their blood sugar, while those with Type 1 diabetes need it to stay alive.
The cost of some insulin medications more than doubled between 2007 and 2018, according to the medical journal Lancet, with some people paying more than $1,000 when higher doses are required.
In recent years the Big Three insulin-makers have introduced programs to reduce the financial burden on patients. In 2020, Novo Nordisk rolled out a $99 cash card program along with 50 price reductions on some of its branded products. Sanofi aligned itself with the Medicare Part D plan in 2021, giving seniors on that plan a $35-per-month cap.
“We appreciate the importance of affordability and access for patients,” Novo Nordisk said in a statement, adding it will assess “emerging patient needs and focus on sustainable solutions.”
“Sanofi believes that no one should struggle to pay for their insulin,” the company said in a statement, referring to various programs to help people cover the costs of their prescriptions.
A Yale University study published in July 2022 found that 14 percent of those insulin users are spending at least 40 percent of their income after food and housing costs on the medicine. A 2021 study found rationing behaviors to be common among a sample of 982 people with diabetes, with 16.5 percent reporting that they often skipped doses, took less insulin than required, or delayed purchases to save money.
Biden has singled out insulin as a cost that needs to be brought under control. In his State of the Union address last month, he called on Congress to pass a provision that would cap the cost of insulin at $35 per month in the private insurance market.
Congressional Democrats and the administration tried to pass such a measure last year, but the final version applies only to people on Medicare, the health insurance program for seniors. This year, the $35-per-month cap began applying to all patients on Medicare Part D, according to the federal Centers for Medicare and Medicaid Services.
Rachel Lerman contributed to this report.