Who Will Benefit from Eli Lilly's Insulin Price Cuts?

• Eli Lilly announced it will cut the cost of its most popular insulin products by 70%.

• The company will also cap the out-of-pocket cost for its other insulin products at $35 per month.

• The move to make insulin more affordable comes as political pressure mounts to hold pharmaceutical companies accountable for the high cost of diabetes care.

Drugmaker Eli Lilly said it will cut the cost of some of its old and most popular insulin products by 70%. The company also highlighted an existing policy that caps out-of-pocket costs for insulin at $35 per month.

The announcement comes amidst ongoing criticism against the corporate price gouging of insulin, a lifesaving drug that helps people with diabetes to regulate their blood sugar.

The cost of some insulin products more than doubled between 2007 and 2018. Lilly in particular has raised the price of Humalog (insulin lispro injection), the company's most commonly prescribed insulin, by more than 1,000% between 1999 and 2019.

According to the company, the Humalog list price will be reduced to roughly $160 for a five-pack of insulin pens, down from $530.40. Its non-branded Insulin Lispro Injection will also drop from $82.41 to $25 per vial, making it the lowest-priced mealtime insulin on the market.

The price reduction for Humalog will take effect by the end of the year, while the cut for non-branded insulin will take place on May 1.

In April, Lilly will launch a new product, called Rezvoglar (insulin glargine-aglr). The basal insulin is a biosimilar copycat to Sanofi’s Lantus (insulin glargine). Lilly set its list price at $92 for a five-pack—78% less than Sanofi’s version.

Related:What Does Insulin Cost and What's Behind the Skyrocketing Prices?

People with Private Insurance and the Uninsured Could Benefit the Most

Under the Inflation Reduction Act that was passed in August 2022, people covered by Medicare part D plans need not pay more than $35 per month out of pocket for insulin. But those who are covered by commercial insurance or who are uninsured may still pay hundreds for their monthly doses.

With Lilly's price cuts, people with private insurance are the most likely to benefit from the out-of-pocket payment caps.

However, not everyone's out-of-pocket costs will go down—those with comprehensive commercial insurance plans may already spend less than $35 per prescription on their insulin. People with high deductible health plans are more likely to see a reduction in their insulin cost burden before they hit their deductible.

Related:California Plans to Lower Insulin Prices by Making Its Own

People with diabetes who are uninsured can receive insulin for $35 per month through Lilly’s existing savings program. But that benefit is a drop in the bucket for the overall cost of diabetes care for uninsured people, said Anna Sinaiko, PhD, assistant professor of health economics and policy at the Harvard School of Public Health.

“There are a lot of barriers to getting care when you're uninsured,” Sinaiko told Verywell. “When you first have diabetes, you need to be seen by a physician and have related health care services, and then you would get a prescription. This isn't going to get rid of those cost barriers related to getting initial care for your diabetes.”

People without diabetes may indirectly benefit from insulin price cuts, too. In general, lowering drug prices will reduce spending by health insurers on those medications. That may lead to lower overall spending by the health plan, which could benefit everyone if it leads to a smaller increase in health insurance premiums the next year, Sinaiko said.

Notably, Lilly's changes cover only older insulin products so far. People who opt for more recent medications may not see the benefits of price cuts, according to Mark Pauly, PhD, a professor of economics and health care management at the University of Pennsylvania.

“If Lilly came out with a version of insulin that was much more convenient to use… they probably would not introduce that at a bargain basement price,” Pauly told Verywell.

Related:Walmart Is Offering a More Affordable Brand of Insulin

A Bow to Political and Competitive Pressure

Higher insulin costs can cause a substantial financial burden, especially for the estimated 27 million uninsured Americans. According to a 2021 study, more than 16% of people with diabetes said they took less insulin, skipped insulin doses, or delayed buying the drug to save money. Uninsured people were the most likely to ration insulin, followed by those with private insurance.

Lilly said its price cut announcement “builds on years of efforts by Lilly to close the gaps in the U.S. healthcare system that keep some people with diabetes from accessing affordable insulin.”

But Pauly said the move was a “response to political pressure,” given the Biden administration’s ongoing efforts to further bring down the cost of insulin nationwide.

The so-called “big three” insulin-makers—Eli Lilly, Novo Nordisk, and Sanofi—make up some 90% of the U.S. insulin market. Sanofi followed the Medicare part D plan in 2021, capping a month’s supply of insulin at $35, down from $99. In 2020, Novo Nordisk offered a $99 cash card program and 50% price reductions on some branded products. 

Related:Best Prescription Discount Cards

While Lilly is “taking the lead” among major drugmakers in cutting costs rather than further raising them, Pauly said the move is also probably a way to get ahead of the competition brought by low-cost biosimilars, like Semglee.

“Maybe it wasn't totally out of the goodness of their heart that Lilly cut the price,” Pauly said.  “They were going to have to cut it anyway to meet competition, we assume, and this is a way for them to get a gold star for being competitive.”

While Lilly’s price cut is a step in the right direction, Sinaiko said, making diabetes care affordable will take more work.

“This $35 cap is a start to making diabetes care more affordable. But people with diabetes often take other medications or have other diabetes-related supplies that they need to buy that are also expensive,” Sinaiko said. “We need policy to address those costs as well.”

Read Next:Type 1 vs. Type 2 Diabetes: What Are the Differences?

If you use insulin products from Eli Lilly, talk with your health insurance provider for information about how the change in drug prices may impact you.