Refill relief… Eli Lilly is lowering the price of its best-selling insulin drugs, which could ease the financial burden for millions of people with diabetes. Yesterday, Eli Lilly said it would cut prices of its name-brand Humalog and Humulin insulins by 70% this fall. The company added that it would cut its generic-insulin prices by a third.
- It’s a big deal because Eli Lilly and rivals Novo Nordisk and Sanofi supply 90% of the world’s insulin — and 100% of the US’s (#three-opoly).
- Big Pharma companies can charge as much as $200/dose of insulin, though it typically costs less than 10 bucks to produce. Last year Eli Lilly earned $3B+ in insulin sales.
The discount push… Of the 37M Americans who have diabetes, nearly a quarter use insulin. But lofty prices have led many to ration or skip doses. While insured folks typically pay less than $35/month for insulin, those without coverage face an average of $900/month. Now retailers and governments are scrambling to fill the affordability gap:
- Governments: Dozens of states have already implemented out-of-pocket caps on insulin spend, and President Biden wants $35/month to become the national norm.
- Companies: In 2021 Walmart started selling a lower-priced version of analog insulin for people without insurance. In December, Mark Cuban’s discounted Cost Plus biz said it would consider testing a three-month supply of insulin for $170.
The first mover can move the rest… especially in a three-opoly like the insulin market. If Eli Lilly’s market share soars thanks to its price cuts, rivals may follow suit to keep customers. Biden and the American Diabetes Association applauded Eli Lilly’s move to cut costs, saying other drugmakers should do the same. Competitive prices, coupled with public pressure, could lead to more affordable medications for those in need.