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A Catalyst for More Affordable Medicines

Today’s guest blog comes from Dave Ricks, Lilly Chairman and CEO.

Patients, doctors and policymakers are demanding lower list prices for medicines and lower patient costs at the pharmacy counter. You might be surprised to hear that we agree – it’s time for change in our system and for consumer prices to come down.

That’s why Lilly announced today we will soon launch a half-price version of our Humalog insulin, called Insulin Lispro. It’s an authorized generic – identical to Humalog but without the brand name. Its list price will be 50 percent less than Humalog’s – immediately providing a more affordable option for certain Americans in high-deductible health insurance plans, the uninsured and seniors that hit the coverage gap in their Medicare Part D plans.

Lilly’s Insulin Lispro, along with other options available at the Lilly Diabetes Solution Center, can help remove cost as a barrier for patients who take insulin. We don’t want anyone to ration or skip doses of insulin due to affordability. And no one should pay the full Humalog retail price.

Insulin affordability is a great example of the breakdown in the U.S. health care system and why patients need a fairer pricing system.

In the current system, pharmaceutical companies like Lilly set a list price for our medicines. To enable patient access, Lilly pays rebates and other discounts to health insurance plans or their pharmacy benefit managers (PBMs). Higher rebate payments are needed to be placed on a health plan’s drug list, called a formulary – meaning patients on those health plans pay less for our medicines.

However, recent changes in insurance design mean more people are exposed to medicines’ full retail price at the pharmacy. Today nearly half of Americans with private insurance are in high-deductible health plans, according to the CDC, a dramatic increase from just a few years ago. These health plans typically require patients to pay several thousand dollars for their medicines, until they reach their deductible.

When patients pay for prescriptions at the pharmacy, these plans typically don’t directly pass on to patients the rebates they receive from pharmaceutical companies. Health plans instead use rebates to reduce premiums for all members of their plan or fund other priorities. The result is that people with chronic diseases like diabetes subsidize insurance for everyone else. This has to change.

Lilly’s Insulin Lispro can serve as a bridge that addresses gaps in the current system until we have a more sustainable model. Those not well served by the current system will have a more affordable option – which can also count toward their deductible. And Humalog will remain available for people who want to continue accessing it through their current insurance plans. 

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. One important change, which we support, is the rebate reform recently proposed by the U.S. Department of Health & Human Services. It would allow rebates in public health plans only if they are shared with patients, cutting their costs.

When Lilly’s Insulin Lispro becomes available soon, we hope it’s a catalyst for positive change across the U.S. health care system – to make medicines more affordable and accessible to patients.