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Lilly Drops Generic Insulin to Cut Out-of-Pocket Patient Costs

The generic would be half the price of the name brand insulin, ideally cutting out-of-pocket patient costs.

drug out-of-pocket patient costs

Source: Thinkstock

By Sara Heath

- Lilly has released a generic form of its insulin drug, cutting the list price in half and ideally reducing out-of-pocket patient costs.

The drug manufacturer has created a generic form of Humalog, its insulin product. The generic form, called Insulin Lispro, will go for $137.35 per vial or $265.50 for a pack of five KwikPens.

This comes as a part of Lilly’s commitment to lowering out-of-pocket costs for patients, according to David A. Ricks, Lilly’s chairman and CEO.

“We've engaged in discussions about the price of insulin with many different stakeholders in America's health care system: people living with diabetes, caregivers, advocacy groups, health care professionals, payers, wholesalers, lawmakers, and leading health care scholars,” Ricks said in a statement. “Solutions that lower the cost of insulin at the pharmacy have been introduced in recent months, but more people need help. We're eager to bring forward a low-priced rapid-acting insulin.”

Diabetes is an incredibly expensive chronic illness, data shows. A 2019 report from the Health Care Cost Institute (HCCI) revealed that patients managing diabetes incur thousands of dollars in out-of-pocket costs each year. The cost of medication proved to be the biggest driver of high patient costs, the report revealed.

In 2016, insulin spending totaled at $5,700 per patient, the report noted. In 2012, that number was just $2,900.

Lowering the list price of insulin, not just reforming the rebate system and other payment options, will be essential for putting a cap on those rising drug costs, Ricks explained.

“The significant rebates we pay on insulins do not directly benefit all patients. This needs to change,” he said. “There are numerous ideas, including the rebate reform proposal from HHS. For people with diabetes, a lower-priced insulin can serve as a bridge that addresses gaps in the system until a more sustainable model is achieved.”

Drug pricing is a complex issue. Because cost is influenced by list price, insurance benefits, rebates, and other cost assistance programs, it is difficult to pinpoint a singular solution for rising out-of-pocket patient costs.

Additionally, there are numerous chronic illnesses – not just diabetes – where intervention is needed.

Nonetheless, Lilly executives said small steps are important.

“While this change is a step in the right direction, all of us in the health care community must do more to fix the problem of high out-of-pocket costs for Americans living with chronic conditions,” Ricks said. “We hope our announcement is a catalyst for positive change across the U.S. health care system.” 

High out-of-pocket patient costs for medications has been top-of-mind for many industry professionals and healthcare policymakers. High drug costs limit patients’ abilities to access important medications and treatments, stakeholders have been determining a path forward.

As noted above, HHS recently proposed a drug rebates overhaul. The proposal prohibits drug kickbacks or rebates that are passed from manufacturer to pharmacy benefits manager (PBM). Instead, savings generated from rebates should be passed along to patients, HHS said.

“This proposal has the potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need,” said HHS Secretary Alex Azar.

The Senate has gotten involved in the drug pricing debate, as well. The Senate Finance Committee recently held a hearing with leading drug manufacturing executives to discuss the issue of list prices.

Addressing list prices will be essential for lowering drug prices for patients, said Committee chairman Chuck Grassley (R-IA).

“For a patient taking a drug that has no competition, the list price is meaningful,” Grassley asserted. “For seniors on Part D who are paying co-insurance as a percentage of list price, the list price is meaningful. For people who have high deductible plans and pay thousands of dollars towards list price, the list price is meaningful. For pharmacy benefit managers, providing drugs with a high list price can be more attractive than providing a less expensive drug. Therefore, for taxpayers, the list price is meaningful.”

Fostering generic development is one step forward in lowering list prices and out-of-pocket patient costs. However, the path toward lower drug prices will be complicated and require a concerted effort on the part of all drug makers to cut patient costs.

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