US drug maker to slash some insulin prices, expand cost cap
President Joe Biden hails move by Eli Lilly as a ‘big deal’, calling on other manufacturers to also reduce prices.
United States President Joe Biden has welcomed a move by a major drug manufacturer to significantly cut the price of insulin, a life-saving medication for people suffering from diabetes.
Eli Lilly had said on Wednesday that it will slash prices for some older insulin products later this year and immediately give more patients access to a cap on costs to fill prescriptions.
Biden called the move a “big deal”, calling on other manufacturers to follow it.
“Eli Lilly, the largest manufacturer of insulin in the United States, announced that they are lowering their prices, capping what patients pay out of pocket for the drug maker’s insulin products at $35,” the US president said in a statement.
“For far too long, American families have been crushed by drug costs many times higher than what people in other countries are charged for the same prescriptions. Insulin costs less than $10 to make, but Americans are sometimes forced to pay over $300 for it. It’s flat wrong.”
Lilly said it will cut the list price for its most commonly prescribed insulin, Humalog, and for another insulin, Humulin, by 70 percent in the fourth quarter, which starts in October.
List prices are what a drugmaker initially sets for a product. People who have no insurance or healthcare plans with high deductibles are sometimes stuck paying those prices.
Last year, we capped insulin prices for seniors on Medicare, but there was more work to do.
I called on Congress – and manufacturers – to lower insulin prices for everyone else.
Today, Eli Lilly is heeding my call. Others should follow. https://t.co/Kv57KFATe9
— President Biden (@POTUS) March 1, 2023
Lilly CEO David Ricks said on Wednesday that his company was making the changes to address issues that affect the price patients ultimately pay for its insulins.
He noted that the discounts Lilly offered from its list prices often did not reach patients through insurers or pharmacy benefit managers. High-deductible coverage can lead to big bills at the pharmacy counter, particularly at the start of the year when the deductibles renew.
“We know the current US healthcare system has gaps,” he said. “This makes a tough disease like diabetes even harder to manage.”
During his State of the Union address last month, Biden called for capping the price of insulin at $35 for all Americans, after a law came into effect that limited the cost for seniors on Medicare, a healthcare programme mostly for elderly Americans.
“Let’s finish the job this time. Let’s cap the cost … for everybody at $35. Big Pharma is still going to do very well, I promise you,” Biden said.
Ricks said that it will take time for insurers and the pharmacy system to implement its price cuts, so the drugmaker will immediately cap monthly out-of-pocket costs at $35 for people who are not covered by Medicare’s prescription drug programme.
Insulin is made by the pancreas and used by the body to convert food into energy. People who have diabetes don’t produce enough insulin.
People with Type 1 diabetes must take insulin every day to survive. More than eight million Americans use insulin, according to the American Diabetes Association.
Research has shown that insulin prices have more than tripled in the last two decades, and pressure is growing on drugmakers to help patients.
The state of California has said it plans to explore making its own cheaper insulin. Drugmakers also may face competition from companies like the nonprofit Civica, which plans to produce three insulins at a recommended price of no more than $30 a vial, a spokeswoman said.
Drugmakers may be seeing “the writing on the wall that high prices can’t persist forever”, said Larry Levitt, an executive vice president with the nonprofit Kaiser Family Foundation, which studies healthcare.
“Lilly is trying to get out ahead of the issue and look to the public like the good guy,” Levitt told the Associated Press news agency.
Ricks said that Lilly made the changes announced on Wednesday “because it’s time and it’s the right thing to do”.