Eli Lilly & Co.’s announcement that it is slashing prices for its major insulin products could make life easier for some diabetes patients while easing pressure on Big Pharma.
It also casts light on the profiteering methods of the drug industry’s price mediators — the pharmacy benefit managers, or PBMs — at a time when Congress has shifted its focus to them.
Insulin has come to embody the perversity of the U.S. health care system as list prices for the century-old drug, which 8.4 million Americans depend on for survival, quintupled over two decades to more than $300 for a single vial. Just because Lilly — which sells about a third of the insulin in the United States — lowers its price doesn’t mean all patients will pay less, even in the long run.
Lilly capped the out-of-pocket costs of its most popular insulins at $35 effective immediately, and said that later this year the list price of its “authorized generic” Lispro — which is identical to Humalog, its bestselling brand-name insulin — would fall to $25 a vial. This followed President Joe Biden’s State of the Union address, and speeches since, in which he has blamed “Big Pharma” and its “record profits” for the incredible expense of insulin.
David Ricks, Lilly CEO, in interviews March 1 called for other manufacturers to join his company in “taking away the affordability challenges” of diabetes.
Even as Lilly promotes its altruism, this move may actually save it money, said health care analyst Sean Dickson. A federal rule taking effect next year penalizes companies that charge Medicaid high prices, especially for older, branded drugs. Lowering the list price of Humalog would allow Lilly to pay significantly less in rebates to government Medicaid programs that buy t …