More Americans can get insulin for $35

(CNN) — In 2024, more Americans with diabetes will receive discounts on insulin.

Sanofi joins the country’s two other major insulin makers in offering price caps or savings programs that reduce drug costs to as much as $35 for many patients. The three drugmakers will also sharply reduce list prices for their products.

The measures were announced in the spring, but some of them only came into force on January 1.

Drug makers have been criticized for years for sharply increasing prices for insulin, which is relatively cheap to produce. Inflation-adjusted drug costs rose 24% between 2017 and 2022, and insulin costs have tripled over the past decade to $22.3 billion in 2022, according to the American Diabetes Association.

About 8.4 million Americans are dependent on insulin, according to the association, and up to 1 in 4 patients cannot pay for their medications, forcing them to take doses based on their diet, sometimes with fatal consequences.

Congress and new market players have increased pressure on insulin manufacturers to lower prices. Medicare beneficiaries now pay no more than $35 a month for each insulin prescription thanks to the Inflation Relief Act, which Democratic lawmakers pushed through Congress in 2022.

But drugmakers also face changes to the Medicaid reimbursement program, each of which likely would have cost them hundreds of millions of dollars if they had not lowered their list prices.

Price limit is $35.00.

Sanofi set a $35 monthly out-of-pocket limit for Lantus, the most commonly prescribed insulin in the United States, for all commercially insured patients starting Jan. 1. The cost is already capped at $35 for all uninsured patients.

Novo Nordisk launched the MyInsulinRx program in September, providing a 30-day supply of insulin for $35 to eligible patients, including those without insurance. The company also offers a copay savings card that allows eligible patients to purchase insulin medications for as little as $35 and as low as $99, depending on their health insurance.

In March, Eli Lilly established an automatic monthly out-of-pocket limit of $35 for those with commercial insurance who purchase insulin medications at participating retail pharmacies. Uninsured people can download a Lilly Insulin Value Program savings card that allows them to get the drug for $35 a month.

Insulin makers are now more willing to rein in their own costs because of public pressure to improve affordability and the emergence of new competitors such as Civica Rx, said Tim Lash, president of the Western Health Policy Center, an organization that focuses on cutting costs. medical care. Civica Rx manufactures and sells insulin for under $30 per vial.

The restrictions will also help the three companies strengthen their relationships with their patients.

“The amount of profit they can give up (by limiting costs) is relatively limited,” Lash said. “The goodwill they receive is very significant.”

Saving Millions in Medicaid Reimbursement

The three companies will also lower list prices on many of their insulin products, something lawmakers and patient advocates have pushed for for years.

Effective January 1, Sanofi reduced the list price of Lantus by 78% to $96 for prefilled pens and $64 for a 10-milliliter bottle. The company also reduced the list price of its short-acting insulin Apidra by 70%.

Effective January 1, Novo Nordisk has reduced the list prices of several of its insulin vials and prefilled pens, including NovoLog, Novolin and Levemir, by nearly 75%. The new list price for NovoLog is $72 per bottle and $140 per FlexPen.

Eli Lilly said it will reduce the list prices of Humalog, the most commonly prescribed insulin, and Humulin by 70% by the end of 2023. Humalog’s list price will now be $66 per bottle.

These measures were carefully calculated and will save companies hundreds of millions of dollars a year, experts say. That’s because the American Rescue Plan Act of 2021 made major changes to the rebates drug manufacturers pay annually to government Medicaid programs, a change that went into effect on January 1st.

Reimbursement is based on how much the drug’s list price has increased compared to inflation and how much it has been discounted on the commercial market. Until now, this rebate was capped at 100% of the drug’s average manufacturer price, which is a measure of its list price.

But that limit disappeared on Jan. 1, so the rebate can now exceed what the drug maker receives from Medicaid for the drug. About 15-20% of brand-name drugs have reached their limit, according to data analytics and research firm IQVIA.

By lowering the list prices of Humalog and Humulin, Eli Lilly could avoid having to pay an additional $430 million in Medicaid rebates in 2024, said Spencer Perlman, director of health care research at Veda Partners, a consulting group that provides policy analysis to institutions. investors. In addition, Eli Lilly could generate an additional $85 million in revenue from Medicaid due to the way its reimbursement formula is designed.

Novo Nordisk could have avoided about $350 million in new chargebacks and earned nearly $210 million more from NovoLog and Levemir. Meanwhile, Sanofi could avoid paying back $560 million and reap an additional $200 million in profits from Lantus.

When asked about Medicaid reimbursement, Novo Nordisk said the price changes create a number of operational requirements and affect multiple parts of the business, which is why the company implemented them on Jan. 1.

Sanofi said it is reviewing its pricing and access strategies to balance affordability for patients and allow the company to continue investing in innovation.

Eli Lilly responded that it weighed multiple factors, including market, legislative and regulatory changes, to determine the appropriate time to reduce list prices in a manner that is affordable to patients and allows the company to continue to operate its clean insulin business. which may continue to provide medications to Medicaid at low or no cost.

Drug makers would be hit hard because they all raised list prices for their insulin and offered huge discounts to pharmacy benefit managers to ensure their products were covered by insurance plans.

“Before the price reductions, these older insulin drugs were significantly more expensive in terms of pricing than they were 30 years ago when they were first released, and they were heavily discounted,” Pearlman said.