Eli Lilly plans to cap the cost for many people with diabetes

The Price of Insulin and Other Diabetes Drugs Has Rise Over the Last 10 Years Despite Lilly’s Promise to Cut Its List Price

Lilly will trim the list price of Humalog and another diabetes drug, Humulin, by 70% during the fourth quarter. The prices would be announced by the drugmaker.

RICKS: There was a change in the US health care market around the time of the 2012 London Olympics. And what that does is it – rather than have a co-pay that’s fixed in your insurance, your out-of-pocket cost is linked to the list price of medications or services you use. Unlike services, though – where when your insurance company negotiates a discount, you benefit – that does not happen in the pharmacy side of the business. The problem grew and grew because people were exposed to the full pricing of insulin without the benefit of the health care system’s discounts, but not individual patients.

The American Diabetes Association says the average price of the drug almost tripled. GoodRx has found that the average retail price of insulin has risen by over 50% in the last four years.

More than 37.3 million people have diabetes in the US alone, and the number of people with it has doubled over the past 20 years. Another 96 million Americans – 38% of the population – have prediabetes, a condition in which blood sugar levels are higher than normal but not high enough for a diagnosis of type 2 diabetes. This can eventually lead to diabetes.

People with diabetes rely on insulin because their bodies have stopped producing enough of this hormone or aren’t using it efficiently to convert food into energy.

The price of generic drugs similar to the original version has fallen because the FDA has approved them, according to GoodRx.

Ricks and Walmart: Small Business Solutions to the Affordable Problems of Diabetia in Low-Intensity Public Health Care

“We call on everyone to meet us at this point and take this issue away from a disease that’s stressful and difficult to manage already – to take away the affordability challenges,” Ricks told CNN’s Don Lemon.

Also that year, Novo Nordisk collaborated with Walmart to sell private-label analog insulin at a deep discount. Walmart said its ReliOn NovoLog vials and FlexPens save customers 58% to 75% off the cash price for branded insulin.

LUPKIN: Oh, for people without insurance, this is huge. She had to give up her dog due to losing insurance in her 20s. She had to fork out over a thousand dollars a month for her diabetes care. For people who have insurance, the co-pay at the pharmacy counter can be affected by the list price. So there could also be some lower co-pays.

Stacie Dusetzina said that Lilly’s planned cuts could provide some substantial rice relief.

Eli Lilly and Co. Reduced the Cost of Insulin: a Story about Alec Raeshawn Smith, a Young Man who died of Diabetes

In January, the federal government started applying a cap to patients with Medicare coverage for people over the age of 65.

American Diabetes Association CEO Chuck Henderson said in a statement he applauded the steps Lilly was taking and called for other insulin makers to also cap patient costs.

People with type 1 diabetes must use the drug every single day. More than 8 million Americans use insulin, according to the American Diabetes Association.

Drugmakers may be realizing that high prices can’t persist forever, said Larry Levitt, an executive vice president with the Kaiser Family Foundation.

Eli Lilly and Co became the first company to market the product after the University of Toronto scientists discovered it in 1923. The drugmaker’s reputation was built around its ability to produceinsulin, even as it branched into cancer treatments and other drugs.

Lilly brought in over $3 billion in revenue from Humalog and its authorized generic last year. They rang up more than $3.5 billion the year before that.

CHANG: …Because you say that full-fledged efforts began around 2016, but this is something people have been calling for for years – reducing the price of insulin – well before 2016. What took so long to address this chronic problem of high insulin prices?

When it comes to society’s contract with it’s people, they should be protected from the costs of expensive things. And when they become cheap, everybody wins for reasons that are difficult to explain. That does not happen with insulin. So we’re taking these actions independent of those external effects.

CHANG. I want to end now by asking you a question about some personal stories that we have heard for quite some time. Alec Raeshawn Smith was a young man who died of diabetes after his mother’s insurance company denied him coverage. His family believes that he was rationing his insulin because it was just too expensive. What do you say to families like his right now?

RICKS: Yeah. I am sorry that something like that would have happened. It shouldn’t have happened. And there were ways to prevent it that weren’t enacted, and we could talk about those. Now those cases should be fewer. Our goal is to get rid of that situation. It has always been, but sometimes health care’s complicated and inconvenient. You know, with today’s announcement, automatic discounts should occur even without insurance. You know, what I would say is we’re taking steps, we’re learning, we’re improving, and no one should have to ration their insulin.

What does the Inflation Reduction Act tell about drug companies and how to push it out? An NPR interview with LUPKIN

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LUPKIN: …With the insulin co-pay caps for Medicare that are part of the Inflation Reduction Act. The expansion of that to people with commercial insurance is being pushed by the Biden administration.

CHANG: No. Usually companies don’t make decisions that will hurt their bottom lines. I wonder if the decision could cost Eli Lilly money.

RICHARD EVANS: Rather than putting the product in there, you know, for a dollar and then having it knock around and at the end of the day, after rebates and concessions and all that, you’re making 15 to 30 cents, depending on the product, why not just sell it for that 15 or 30 and not bother with the rebates at all?

There is a catch. All drugs are not treated the same by the PBM. It might favor drugs from companies that pay a higher rebate and make them more attractive to patients by keeping the co-pay lower. It can also tilt the field against some drugs by making people jump through hoops for them, raising the co-pays, not covering them at all. So without…