US pharmaceutical giant Eli Lilly is cutting the cost of its insulin by 70% and has called on rival drug producers to follow suit as a survey by non-profit T1International shows that one in four respondents living with diabetes reported rationing their insulin because of the financial strain.
Manufacturers have ratcheted up insulin prices in recent years, hitting millions of Americans living with diabetes – and drawing sharp political criticism.
“Insulin costs less than US$10 to make, but Americans are sometimes forced to pay more than US$300 for it. It’s wrong,” President Joe Biden said last week, hailing Eli Lilly’s price cut as “huge” and saying it was time for other manufacturers to follow, reports the South China Morning Post.
Lilly announced a series of steps to rein in prices of the life-saving drug, such as capping out-of-pocket costs at US$35 per month for people with insurance, but the big news was the 70% drop in Humalog, its most commonly prescribed insulin.
Adult diabetes in the US has doubled over the past 20 years, afflicting 37.3m people, according to the US Centres for Disease Control and Prevention (CDC).
Insulin prices have soared, with the drug costing over eight times more than in 32 comparable high-income countries, a 2020 Rand Corporation study found.
But much of the profit from these prices is passed on to health insurers in the form of rebates. As a result, the financial hit from Lilly’s decision could fall hardest on insurers. The unaffordability of insulin – particularly for uninsured Americans – has become a rallying cry for critics of Big Pharma.
The cost of a five-pack of Humalog is currently US$530.40, although the out-of-pocket price to a user varies depending on one’s insurance plan. Average monthly use varies by user.
Drug pricing in the US is affected not only by the cost of producing and distributing the pharmaceutical, but also other players like insurers and pharmacy benefit management companies.
Critics like Senator Bernie Sanders have blasted the industry as emblematic of “unacceptable corporate greed”.
“At a time when Eli Lilly made more than $7bn in profits last year, public pressure forced them to reduce the price of insulin by 70%,” Sanders said on Twitter after the price-cut announcement.
“Sanofi and Novo Nordisk must do the same,” he added, referring to two other companies which along with Lilly dominate the insulin market.
Both Sanofi and Novo Nordisk released statements pointing to programmes to help make insulin more affordable, including to uninsured users. But neither company commented directly on whether they would match the Lilly plan.
The Inflation Reduction Act, signed into law last year by Biden, capped insulin prices for Medicare recipients at US$35 per month, but people with private insurance and the uninsured were left out.
Biden called on lawmakers to rein in Big Pharma and “finish the job this time” by instituting a national cap on insulin costs.
Eli Lilly chief executive David Ricks urged rival producers to join the effort.
“We know seven 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,” he said.
Last month MedicalBrief reported that six major major companies dominating the US insulin market are being sued by Californian Attorney-General Rob Bonta, who believes they are violating the law by unfairly and illegally pushing up the price of the drug.
The 47-page civil complaint accuses the three pharmaceutical companies controlling the insulin market – Eli Lilly, Sanofi and Novo Nordisk – of violating California law by inflating the drug’s cost, and also targets three distribution middlemen, known as pharmacy benefit managers: CVS Caremark, Express Scripts and OptumRx.
SCMP article – US drug maker Eli Lilly says slashing insulin prices by 70 per cent (Open access)
See more from MedicalBrief archives:
California AG sues big pharma over insulin prices
Insulin price illustrates global web of patent laws protecting Big Pharma
‘Captive’ Type-1 diabetes patients: Paying until it hurts