Eli Lilly Slashes Price of Insulin

(Photo Credit: Melissa Johnson/Flickr)
(Photo Credit: Melissa Johnson/Flickr)

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

It’s not a prank this time.

Eli Lilly announced Wednesday it’s cutting the price of its most-prescribed insulin drugs by 70% and introducing a price cap of $35 per month. This comes with the US in the throes of an insulin crisis and four months after a blue-check Twitter account masquerading as the company’s official account declared insulin was now free.

A Spoonful of Political Pressure…

In April 2022, Human Rights Watch published a report on the unaffordability of the drug, fingering a lack of government regulation. Per HRW, insulin in the US was over eight times more expensive on average compared to a study of 32 other countries. A single vial can cost upwards of $300, meaning a monthly cost of $1,000.

Eli Lilly’s press statement said it’s slashing prices to make insulin more accessible, and then flipped the onus onto other entities. “We are calling on policymakers, employers and others to join us in making insulin more affordable,” CEO David Ricks said in a statement — casually omitting the fact insulin makers have been under pressure from lawmakers to lower prices:

  • The Inflation Reduction Act introduced a $35 out-of-pocket monthly cap for people on Medicare, but the vast majority of Americans are on private healthcare.
  • In April, the House of Representatives passed a bill that would implement the same cap for privately insured patients, but it was blocked by Senate Republicans in August. There has been some bipartisan collaboration since then to get the bill off the ground, but it’s been an uphill battle.

Eli Lilly’s announcement was heavy on the ethics of insulin access, but it’s also not averse to stealing customers from a rival. It announced it will be launching a new drug called Rezvoglar, which it said will be interchangeable with Lantus, made by rival pharmaceutical giant Sanofi. It said Rezvolgar will cost 75% less than Lantus. Shots fired.

Who Watches The Middlemen: With Eli Lilly taking the high road out of a political hot zone, lawmakers are now turning their gaze to healthcare companies a few steps down the supply chain. A House Committee announced a new investigation into pharmacy benefit management companies (PBMs), firms that are supposed to handle rebates for insurers and employers. The investigation follows an inter-industry blame game in which pharmaceutical companies claim PBMs inflate costs by haggling for discounts, while PBMs blame manufacturers for gaming the patent system to side-step competition, per The Wall Street Journal. A nice, friendly congressional probe should help the two sides clear the air.

– Isobel Asher Hamilton