Insulin, a drug commonly used to treat diabetes, is one of the most widely used medications in the US. But millions struggle to afford it.
Fortunately, it looks like those who rely on insulin will finally get some financial relief. The nation’s largest insulin manufacturers have all committed to lowering the cost of the drug.
• Eli Lilly (LLY), set to cap the price of insulin at $35 for both insured and uninsured users.
• Novo Nordisk (NVO), who will charge $48.20 for its cheapest version of the drug.
• Sanofi (SNY), capping its most popular insulin’s price at $35 for people with private insurance.
This move is not only in patients’ best interest, but in the drugmakers’ as well.
The laws influencing these drugmakers’ decisions date back to 1990, with the passing of the Medicaid Drug Rebate Program.
This program was designed to ensure Medicaid paid the lowest cost possible for prescription drugs. The bill required any drugmakers wishing to supply drugs to Medicaid to pay a rebate to the government, set on the market price of the drug.
Last year, the Inflation Reduction Act reduced the monthly costs of insulin for Medicare beneficiaries to $35. Since the market price of insulin at the time was set much higher, it meant drug companies would have had to pay the government a rebate worth more than the drug itself.
By capping the price of insulin, drugmakers are saving themselves from paying hundreds of millions in rebates to federal insurance programs. Experts estimate that Novo Nordisk and Eli Lilly would have had to pay around $350 million and $430 million, respectively. By dropping the price, these companies are tending to both their customers and their own bottom lines.
But for those who rely on insulin for their health, the reasoning likely won’t matter as much as the relief. You can now expect insulin to be capped somewhere between $35 and $50, depending on the brand and insurance, starting January 1, 2024.
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