Drug giant Eli Lilly said Wednesday that it will slash the price of its most commonly prescribed insulin products by 70% and expand a program capping diabetic patients’ out-of-pocket insulin costs at $35 a month.
The company, a leading manufacturer of insulin, has been under fire for its pricing of the drug, which is crucial for millions of diabetics. Years of repeated price hikes had left the drug unaffordable for many patients and forced many to ration their doses.
“It’s a big deal, and it’s time for other manufacturers to follow,” President Joe Biden said.
Insulin costs about $10 a vial to manufacture. Lilly said it would cut the list price of its generic insulin to $25 a vial as of May and drop the list price of its Humalog-branded insulin by 70% as of the fourth quarter of the year, lowering it from about $275 a vial to $66.40. “That will still be more than triple the list price when Humalog was introduced in 1996,” Rebecca Robbins of The New York Times notes.
Lilly said its $35 monthly price cap would take effect immediately. That cap matches one for seniors on Medicare enacted by Democrats as part of last year’s Inflation Reduction Act. That cap went into effect this year, but congressional Republicans blocked a measure that would have extended the cap to people covered by private insurance.
“The aggressive price cuts we're announcing today should make a real difference for Americans with diabetes,” David A. Ricks, Lilly's chairman and CEO, said in a statement. "We are driving for change in repricing older insulins, but we know that 7 out of 10 Americans don't use Lilly insulin. We are calling on policymakers, employers and others to join us in making insulin more affordable.”
Sen. Bernie Sanders (I-VT), chair of the Senate’s Health, Education, Labor, and Pensions Committee, applauded the public pressure campaigns that he said forced Eli Lilly to cut its prices after raising them by 1,200% since 1996. He joined Biden in calling on other major insulin makers to also cut their prices.
“This is what fighting back accomplishes,” Sanders said. “At a time when Eli Lilly made over $7 billion in profits last year, public pressure forced them to reduce the price of insulin by 70 percent. Now is the time for Sanofi and Novo Nordisk to do the same. Now is the time to end the greed of the pharmaceutical industry and substantially lower the outrageous cost of prescription drugs in America.”
Sanders said that he plans to introduce legislation to cap the price of insulin at $20 a vial.
Why it matters: The Times’s Robbins writes that Lilly’s move “marks at least a partial retreat for a company that has been a primary contributor to soaring prices for an injection that millions of Americans rely on to keep their blood sugar levels in check. It comes at a time of mounting political pressure on drug companies to rein in what lawmakers and other critics view as the industry’s pattern of abusive profiteering.”
But Lilly’s moves will have limited impact, according to some experts, and the price cuts don’t apply to the company’s newer insulin products. Also, a price of $25 per vial, which Lilly said would be the lowest list-priced mealtime insulin available and less than the price of a Humalogvial in 1999, would still be higher than recent insulin prices in other comparable countries.
