Amid consumer angst and political pressure over the cost of lifesaving insulin, Sanofi announced on Thursday that it would cut the price of its most prescribed insulin, Lantus.
Sanofi was the last holdout among three companies that produce 90% of the global insulin market by value. Earlier this week, Novo Nordisk followed Eli Lilly Co.’s plans to cut US prices by up to 75% and 70%, respectively.
Sanofi said it would cut the price of Lantus by 78% and short-acting Apidra by 70% starting January 1, 2024.
The prices these companies set for insulin are coming under increasing scrutiny from analysts, politicians and patient advocates. In recent years, federal and state laws, Medicare and Medicaid policies, and changing market dynamics for these older insulin medications have influenced price declines.
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But more needs to be done, said Elizabeth Pfiester, founder and executive director of T1International, an advocacy organization for people with type 1 diabetes.
This vital medicine is needed by millions of people. A 2020 survey by his organization found that one in four people with type 1 diabetes rationed insulin due to cost. Patients also struggled to afford the costs of other necessary supplies such as insulin pumps, test strips and continuous glucose monitors.
His organization is pushing for a federal policy that would cap the cost of insulin.
“It’s great that they chose to lower the price,” Pfiester said of the insulin makers. “But they can choose to raise the price again.”
Sanofi lowers list price of Lantus
Sanofi’s list price is $292 per bottle of Lantus, the amount billed before discount programs or discounted prices negotiated by health insurers. When Sanofi lowers the price starting Jan. 1, Lantus will cost around $64 per bottle.
The company also announced a price cap that ensures no patient will pay more than $35 for a monthly supply of Lantus.
The Paris-based drug company said earlier that most people with private insurance are already paying $15 or less because of a co-pay assistance program. The drugmaker’s program for the uninsured also offers a 30-day supply for $35.
“The list prices of our insulins do not reflect the actual net prices paid to Sanofi after various discounts and rebates,” Sanofi said in a statement. “Despite the rhetoric about skyrocketing insulin prices, the net price of insulin has fallen for eight consecutive years, making our insulins significantly cheaper for insurance plans.”
Sanofi pledged to continue to listen to patients, advocates, caregivers and others to “better understand additional actions we could take to address access or affordability challenges.”
Why is insulin so expensive?
Insulin prices charged by the three major drug makers have skyrocketed over the past two decades. From 2002 to 2013, the average price of insulin nearly tripled, according to the American Diabetes Association.
A 2021 Senate Finance Committee investigation found drug price increases coincided with lucrative rebate demands from insurers and drug benefit managers, which are drug pricing intermediaries that offer deep discounts in exchange for favorable placement on private insurance plan drug formularies.
Over the past decade, these pharmacy managers have begun to pit manufacturers against each other by excluding them from large blocks of patients through formulary exclusions, the Senate Finance Committee reported.
Why insulin prices are starting to drop now
Last year’s sweeping climate and health bill, called the Inflation Reduction Act, caps insulin costs at $35 per month for those enrolled in Medicare. And last month, Biden urged Congress to extend that cap to young Americans who have private health insurance.
Washington, DC, and 22 states have adopted cost-sharing limits for consumers who purchase insulin, according to the American Diabetes Association.
Drugmakers are also bracing for a change in drug prices under Medicaid, the federal health care program for low-income families. Medicaid required drug companies to pay rebates when they dramatically increase prices over time. But the amount drug companies paid into Medicaid was capped in previous years.
The new provision, part of the American Rescue Plan Act passed in 2021, eliminates the reimbursement cap starting next year. In other words, drug companies could face significant financial penalties starting next year, said Antonio Ciaccia, CEO of 46brooklyn Research, a nonprofit that studies drug prices.
Eliminating this Medicaid reimbursement cap, in particular, could influence drugmakers’ decisions to significantly reduce insulin list prices, Ciaccia said.
“It’s one thing for a drugmaker to give something away for free,” Ciaccia said. “It’s another thing to literally pay for the privilege of doing it.”
Market dynamics mean insulin will continue to be cheaper
Drugmakers also face changing market dynamics.
Cost Plus Drugs, a venture by tech entrepreneur Mark Cuban, aims to eliminate drug benefit managers and provide low-cost drugs to consumers. The company has launched a testing program for insulin.
Meanwhile, CivicaRX plans to manufacture and market discounted biologics that are interchangeable with Lantus, Humalog, and Novolog.
The nonprofit, which is building a manufacturing facility in Virginia, plans to seek Food and Drug Administration clearance for its insulin products starting next year, a spokesperson said. word.
Ciaccia, of 46brooklyn, said these older insulin drugs also face competition from newer insulin products, as well as weight-loss drugs such as Ozempic.
“The writing is on the wall from a market perspective,” Ciaccia said.
How much does insulin cost?
Before companies announced price cuts, insulin cost nearly $300 a bottle.
Eli Lilly, the first to announce insulin price cuts this month, will cut the drugmaker’s most commonly prescribed Humalog insulin to $66.40 per vial from $274.70. It will implement price reductions in the last three months of this year.
Novo Nordisk, a Danish drugmaker, will cut the price of its top-selling NovoLog to $72.34 per vial from $289.36. Novo’s discounts will take effect on January 1.
The pressure is rising
This week, Chairman Joe Biden said he was glad Novo followed Lilly’s price cuts and urged “others to follow”.
US Senator Bernie Sanders said earlier this week on social media that “popular pressure” led to the price cuts of Lilly and Novo, adding: “Sanofi must follow”. Last week, he and US Representative Cori Bush introduced a bill that would limit the list price of insulin to $20 per vial.
Ken Alltucker is on Twitter at @kalltucker, or can be emailed at firstname.lastname@example.org