It is difficult to overstate insulin’s impact on human health. Since its discovery in 1921, insulin has helped generations of people living with diabetes live longer, healthier, and happier lives. For many patients, their continued access to the drug is a matter of life and death, and rising prices have forced many to put themselves at risk by rationing their supplies.
However, the insulin status quo was upended by the recent announcement by Eli Lilly, one of the industry’s largest insulin producers, that they would be lowering the price of the most used forms of its insulin by 70% and capping costs at $35 per month, for patients with private insurance and who use participating pharmacies. In addition, Novo Nordisk and Sanofi recently announced similar price cut and cap plans for their products which will be effective starting in January of 2024. This is life-changing news for those patients, but what does it mean for employers? And where do we go from here?
Eli Lilly’s and Novo Nordisk’s planned changes come not long after failed attempts by Congress to pass national legislation limiting all patient out-of-pocket costs to $35. That plan would have shifted costs back to employers, who would have been responsible for the balance of the insulin cost. There may still be costs shifted back to the employer, depending on their plan’s copays, but likely far less than they would have seen under the proposed federal legislation.
It is important to remember that the $35 price cap only applies to the patient’s responsibility, it does not wipe away the balance of the insulin’s price. In addition, Eli Lilly and Novo Nordisk are still offering discounts through their patient assistance programs, which may also help alleviate employer costs. As with any change in drug pricing or policy, we recommend employers consult with their benefits administrators for deeper insights into the financial aspect of this decision.
Treating the effects of insulin rationing can be an expensive, unpleasant experience for both patients and employers. Promoting proper utilization of insulin, and other treatments, is a much easier undertaking. Proactive health programs, such as our in-house healthcare management and our care and advocacy team help empower members to make better, healthier decisions for themselves while managing chronic conditions like diabetes. We also work with the team at Livongo to help patients manage their diabetes more effectively. Investing in these solutions can also help control the rising cost of diabetes treatments and improve the outcomes for patients.
It will also be increasingly important for pharmacy benefits administrators (PBMs) to look more closely at the drugs they’re negotiating over to make sure they’re delivering the best deal possible, on the best drugs available for their clients. PBM negotiations are always complicated, and employers are relying on their PBMs for guidance.
As prices change, laws pass, and new drugs are developed, we will be here to help our clients navigate each new turn to make sure they and their members are getting the best value possible for their healthcare dollars. To find out more about these developments, or to hear how we can help your clients, connect with us today.
However, the insulin status quo was upended by the recent announcement by Eli Lilly, one of the industry’s largest insulin producers, that they would be lowering the price of the most used forms of its insulin by 70% and capping costs at $35 per month, for patients with private insurance and who use participating pharmacies. In addition, Novo Nordisk and Sanofi recently announced similar price cut and cap plans for their products which will be effective starting in January of 2024. This is life-changing news for those patients, but what does it mean for employers? And where do we go from here?
Beneath the Headlines
People who rely on insulin likely have great cause to celebrate this news. As the mother and daughter of type I diabetics, I understand what a huge deal this is. And as a professional in the health benefits field, I also recognize that there is more to this story. It is important to keep in mind that Eli Lilly and Novo Nordisk are not reducing the list price for all of their insulin products, only some of them. Patients with newer or more specialized insulins may not see any change in their lives due to these announcements.Eli Lilly’s and Novo Nordisk’s planned changes come not long after failed attempts by Congress to pass national legislation limiting all patient out-of-pocket costs to $35. That plan would have shifted costs back to employers, who would have been responsible for the balance of the insulin cost. There may still be costs shifted back to the employer, depending on their plan’s copays, but likely far less than they would have seen under the proposed federal legislation.
It is important to remember that the $35 price cap only applies to the patient’s responsibility, it does not wipe away the balance of the insulin’s price. In addition, Eli Lilly and Novo Nordisk are still offering discounts through their patient assistance programs, which may also help alleviate employer costs. As with any change in drug pricing or policy, we recommend employers consult with their benefits administrators for deeper insights into the financial aspect of this decision.
Good News, Good Business
Overall, this announcement indicates that more people will have more access to the insulin they need, and that is very good news for all of us. A study published in the Annals of Internal Medicine in October 2022 found that each year, more than one million Americans with diabetes are rationing insulin because of price. Those delays can have terrible consequences. For patients with type 2 diabetes, insulin rationing can lead to hyperglycemia, increase the risk of diabetic ketoacidosis, or even blindness and kidney failure. Those with type 1 diabetes who ration or skip doses may go into a diabetic coma, or die, according to Drug Watch.Treating the effects of insulin rationing can be an expensive, unpleasant experience for both patients and employers. Promoting proper utilization of insulin, and other treatments, is a much easier undertaking. Proactive health programs, such as our in-house healthcare management and our care and advocacy team help empower members to make better, healthier decisions for themselves while managing chronic conditions like diabetes. We also work with the team at Livongo to help patients manage their diabetes more effectively. Investing in these solutions can also help control the rising cost of diabetes treatments and improve the outcomes for patients.
It will also be increasingly important for pharmacy benefits administrators (PBMs) to look more closely at the drugs they’re negotiating over to make sure they’re delivering the best deal possible, on the best drugs available for their clients. PBM negotiations are always complicated, and employers are relying on their PBMs for guidance.
As prices change, laws pass, and new drugs are developed, we will be here to help our clients navigate each new turn to make sure they and their members are getting the best value possible for their healthcare dollars. To find out more about these developments, or to hear how we can help your clients, connect with us today.