Over the past couple of weeks, a lot has happened within the insulin drug class. It started on March 1, when Eli Lilly announced price reductions of 70% on its commonly prescribed insulins and an expansion of its Insulin Value Program that caps out-of-pocket costs at $35 per month. Then, last week, Novo Nordisk and Sanofi followed suit by announcing price reductions on their insulins of at least 70% effective January 1, 2024.
Below is a summary of the announced price changes.
*Price reduction effective date ranges from May 1, 2023, to January 1, 2024 depending on manufacturer and product.
The price reductions announced will be much needed for many patients, especially those without insurance or those covered under a commercial insurance plan. This is an important step by the manufacturers in converting the discounts and rebates collected by PBMs and plans into savings that are more transparent to the patient at the point of sale; Eli Lilly, Novo Nordisk, and Sanofi should be highly commended for this.
Now that these manufacturers have made this announcement, attention turns to PBMs and Payers on what impact these changes will have. As alluded to above, the insulin drug class is highly rebated and the role of these rebates in driving strategy may change in favor of lower upfront costs. Abarca’s transparent model which passes all rebates through is particularly well positioned for the rapidly changing environment and the impact of the loss of these insulin rebates. On the other hand, those PBMs basing revenue heavily on rebates will likely be hit hard by this news and adjustments will be needed. For health plans and employer groups, unless these rebate dollars are used to drive profit, the decrease in rebates should be offset with lower drug spend. One thing is for certain, it will be very important for payers and plans to monitor this class closely and be able to adjust their strategies to ensure the most cost-effective products are available to their patients.
- IPD Analytics. (2023, March 14). IPD Analytics Payer and Provider Update: Novo Nordisk Announces Insulin Price Reductions. https://www.ipdanalytics.com
- Novo Nordisk. (2023, March 14). US Press Release: Novo Nordisk to lower U.S. prices of several pre-filled insulin pens and vials up to 75% for people living with diabetes in January 2024. https://www.novonordisk.com/news-and-media/latest-news/lowering-us-list-prices-of-several-products-.html.
- (2023, March 16). Press Release: Sanofi cuts U.S. list price of Lantus®, its most-prescribed insulin, by 78% and caps out-of-pocket Lantus costs at $35 for all patients with commercial insurance. https://www.sanofi.com/en/media-room/press-releases/2023/2023-03-16-20-06-43-2629188
*This blog was written by Brock Bizzell PharmD, MBA, BCPS, and David Baker PharmD at Abarca Health.