Drug maker Eli Lilly & Co. will offer a half-price version of its blockbuster insulin, becoming one of the first companies to effectively cut the price of a top-selling drug amid the ongoing U.S. debate over pharmaceutical costs.
Although it will continue selling its brand-name version, Humalog, at its existing price, Indianapolis-based Lilly will also sell a half-price “authorized generic” called Insulin Lispro for $137.35 a vial, or $265.20 for a five-pack of injectable pens. (A company spokeswoman said the average person uses about two vials a month, and the pack of pens can last a month or more.) That will give a better deal to customers who pay cash or who are in insurance plans that make them pay a percentage of a drug’s list price.
Insurers and pharmacy benefit managers don’t typically pay the listed prices for drugs, instead negotiating discounts and rebates that can help lower premiums as a whole. But that can result in large out-of-pocket costs for some people who need expensive medicine or who have chronic conditions that require them to take treatments year-round.
“The significant rebates we pay on insulins do not directly benefit all patients. This needs to change,” Lilly Chief Executive David Ricks said in a statement announcing the move. “We hope our announcement is a catalyst for positive change across the U.S. healthcare system.”
Lilly’s move is one of the first by a major drug maker to offer a cut-price version of a major product, and it could put pressure on other pharmaceutical companies to do the same. Mylan faced a similar outcry over the price of its EpiPen allergy shot, and in 2016 it announced a lower-cost authorized generic. But such moves have been rare, even as drug CEOs have been called before Congress and faced frequent criticism from both political parties.
There are millions of people with diabetes in the United States, and insulin has become a particular flashpoint for the debate over the cost of drugs. Last month, a Senate committee sent letters to Lilly, Novo Nordisk — the world’s biggest maker of insulin — and Sanofi asking the companies how they set insulin prices, and Sanofi CEO Olivier Brandicourt was among the pharma bosses who headed to Washington last month to testify on drug costs.
Lilly, Novo and Sanofi all heavily discount the price of many of their diabetes medications, and there is typically a wide difference in the list and net prices.
Sanofi’s CEO said in his testimony that the average net price of Lantus, his company’s most prescribed insulin, has fallen more than 30% since 2012, yet out-of-pocket costs for patients with commercial insurance and Medicare have increased about 60%. In an emailed statement, Sanofi said it has a competing “biosimilar” version of Lilly’s Humalog that it sells under the name Admelog. The company said it also offers a variety of discount programs for patients.