March 1, 2023

Breaking News: Lilly Cuts Insulin Costs

 

Lilly announced today that it is cutting insulin prices by 70 percent and capping monthly out-of-pocket costs at $35 for insulin lispro and Humalog effective immediately.

This is great news for patients.

As a Lilly retiree, I’m glad Lilly is leading the way to help address the affordability of this life-saving medication. As a pharmacy benefits leader, I encourage all insulin manufacturers to follow Lilly’s lead.

While a significant list price drop is good news, it is important for business owners, HR and finance leaders and patients who have employer-provided insurance to realize that, within the murky waters of the pharmacy benefit/PBM world, we are unlikely to see such drastic reductions in cost.

Why? Because most PBMs don’t pay list price for insulin. They’ve been receiving a variety of discounts and rebates that already reduced their cost by as much as 50 percent or more. And, most PBMs have been holding onto a portion of these discounts and rebates as profit for themselves.

I suspect that right now, many PBMs are scrambling to understand if Lilly is reducing or eliminating rebates and negotiated discounts to help them afford the reduced insulin price. Once they know how the rebates and discounts are reduced, PBM leadership teams will assess how much of these savings they will choose to retain versus pass through to employers and their members.

Finally, the PBMs will also use Lilly’s change as a negotiating tactic with other insulin manufacturers to shore up any lost revenues the PBM is encountering due to Lilly’s change.

What’s the bottom line?

Any price reduction is favorable and our role as pharmacy benefit experts and business leaders is to hold each PBM accountable for passing all of these savings through to employers and their members!

As always, let’s encourage patients to shop for best prices using programs like GoodRx and others to find the lowest out-of-pocket cost. Check out Apex Benefit’s download below for more Rx price savings opportunities.

According to the Lilly’s press release, they will launch a nationwide public awareness campaign to help ensure all Lilly insulin users understand what this means for them. For more information, go to Lilly’s insulin resource page..

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Jim Harenberg

Authored By

Jim Harenberg, CPBS

Principal | Chief Operating Officer
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