Eli Lilly CEO vows not to raise insulin prices again, while Novo Nordisk and Sanofi hedge
Sen. Bernie Sanders, the committee’s chair, asked Ricks and the CEOs of Novo Nordisk and Sanofi to commit to “never increase the price of any insulin drug again.” The three companies control over 90% of the global insulin market.
Ricks was the only executive who outright agreed to Sanders’ demand – at least for Eli Lilly’s existing insulin products.
“We’ll leave our prices as they are for the insulins on the market today,” Ricks told the Vermont senator. “In fact, we’ve been cutting them.”
Meanwhile, Novo Nordisk CEO Lars Fruergaard Jørgensen said the Danish company is committed to limiting price increases to “single digits.”
Sanofi CEO Paul Hudson responded that the company has a “responsible pricing policy.”
He also noted that net prices for Sanofi’s insulin products are actually falling. Net price refers to the amount insurers pay for an insulin drug after discounts and rebates. It is typically lower than the price a product is listed for.
All three companies have faced years of political pressure to make insulin more affordable for people with diabetes.
In March, they each announced that they will slash the prices of their most widely used insulin products.
Lilly said it would price its Lispro injection at $25 a vial, effective May 1, and slash the price of its Humalog and Humulin injections by 70% starting in the fourth quarter.
The company also said it would cap out-of-pocket costs for people with private insurance at $35 per month at participating retail pharmacies.
Novo Nordisk said it would cut the list price of its NovoLog insulin by 75% and lower the prices for Levemir and Novolin by 65% starting next year.
Sanofi said it plans to cut the price of its most popular insulin drug, Lantus, by 78% and reduce the list price of its short-acting insulin, Apidra, by 70%.
At the hearing, Sanders called those actions “good news” and a result of public pressure.
But the senator said the committee intends to hold a hearing next year to ensure those price cuts are “in fact happening.”
“We just don’t want words. We want actions,” Sanders said in his opening remarks.
“We must make sure price reductions go into effect in a way that every American with diabetes gets insulin they need at an affordable price,” Sanders added.
CVS, Express Scripts, Optum Rx
The hearing also gathered other major players in the insulin industry: top executives from three of the biggest pharmacy benefit managers.
Those executives were David Joyner, president of CVS Health pharmacy services; Adam Kautzner, president of Express Scripts; and Heather Cianfrocco, CEO of Optum Rx.
PBMs are the middlemen which negotiate drug prices with manufacturers on behalf of health insurance plans. They are often criticized for allegedly inflating drug prices and not passing on all the discounts and rebates they negotiate to consumers.
Joyner stressed that CVS Health passes on more than 98% of all rebates back to clients.
“We have always prioritized being really transparent offerings to the marketplace,” he said during the hearing.
But Sen. Roger Marshall, R-Kan., stressed that 84 cents on every dollar goes to the PBMs.
Sen. Susan Collins, R-Maine, also highlighted a colossal gap between the list and net prices of insulin from 2012 and 2021.
Collins asked Ricks to explain “who gets that money” because, “I can tell you that it is not going to the consumer at the pharmacy counter.”
Ricks told her to ask the PBMs “how that money gets redistributed.”
Roughly 37 million people in the U.S. have diabetes, according to the Centers for Disease Control and Prevention. Approximately 8.4 million diabetes patients rely on insulin.
High prices have forced many Americans to ration insulin or reduce their use of the drug. A 2021 study in the Annals of Internal Medicine found that nearly 1 in 5 U.S. adults either skipped, delayed or used less insulin to save money.
The Inflation Reduction Act, the Democratic plan that Biden signed last year, capped monthly insulin costs for Medicare beneficiaries at a $35 monthly prescription, but it fell short of providing protection to diabetes patients who are covered by private insurance.
More than 2 million patients with diabetes who take insulin are privately insured, according to the Department of Health and Human Services. Another 150,000 or so patients who take insulin do not have insurance, HHS says.
Last month, Sens. Jeanne Shaheen, D-N.H., and Collins introduced bipartisan legislation that would require private health insurance to cap prices at $35 per month for one of each insulin type and dosage form.
Those insulin types include rapid, short, intermediate and long acting, as well as pre-mixed. Dosage forms include vials, pens and inhalers.