Eli Lilly announced it would cut the price of its most commonly prescribed insulin products by 70 per cent in response to mounting political pressure over the high cost of the diabetes medication.
The US drugmaker said on Wednesday it would also take other steps to make its products more affordable for patients, including expanding an existing value programme that caps patients’ out-of-pocket costs to $35 or less a month to people on commercial insurance policies. This price cap change would take effect immediately.
The changes to insulin pricing by Eli Lilly follow fierce political pressure over the high cost of a drug, which was invented in the 1920s but can still cost diabetes sufferers thousands of dollars a year to buy in the US.
The Biden administration introduced a legislated price cap of $35 a month on insulin products for patients on the government-funded health system for seniors on January 1. In his State of the Union address last month President Joe Biden called on Congress to pass new legislation to impose the same price cap for younger patients who purchase their own insurance policies or get insurance coverage through an employer.
Biden welcomed Lilly’s move and called on rival manufacturers, such as Novo Nordisk and Sanofi, to follow suit.
“I called on Congress — and manufacturers — to lower insulin prices for everyone else. Today, Eli Lilly is heeding my call. Others should follow,” he wrote on Twitter.
The 70 per cent price cuts on older injectable versions of the drug Humalog and Humulin will be implemented in the fourth quarter while the prices of one of the company’s non-branded insulin products will take effect on May 1.
Lilly chief executive Dave Ricks said the price changes on insulin products would not have an impact on the company’s sales and earnings guidance for 2023.
“We have been planning this for a long time. When we gave our December financial guidance [we] included these actions,” he said.
Ricks said the aggressive price cuts should make a real difference for Americans with diabetes and followed numerous conversations between the company and Congress.
“Because these price cuts will take time for the insurance and pharmacy system to implement, we are taking the additional step to immediately cap out-of-pocket costs for patients who use Lilly insulin and are not covered by the recent Medicare Part D cap,” he said.
Stacie Dusetzina, professor of health policy at Vanderbilt University School of Medicine, said the company was reacting to political pressure, as well as increasing competition in the insulin market.
“I do think these changes are going to help some patients who have difficulty affording their medications, but I also think that the company is reacting to a tremendous amount of existing and upcoming competition for these drugs,” she said.
Dusetzina said lowering the list price of the insulin products rather than just capping out-of-pocket costs is helpful for patients who are uninsured or underinsured.
Competition in the insulin market has increased owing to the launch of copycat versions of branded drugs that are sold at big discounts. Sales of Lilly’s Humalog declined 16 per cent to $2.06bn in 2022 compared to a year earlier. Sales of Humulin — a type of insulin used to control blood sugar for many hours during a day — fell 16 per cent to $1.01bn in 2022.
About 8.4mn people use insulin products in the US, according to the American Diabetes Association.
The group welcomed Lilly’s price cuts, saying they marked “an important step to limit cost-sharing for its insulin”. It called on other manufacturers to do the same.