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Eli Lilly announces price cuts for some insulins later this year

STEVE INSKEEP, HOST:

Insulin to treat diabetes should soon cost less at the drugstore. Eli Lilly, the giant company headquartered in my home state of Indiana, says it is cutting the price and expanding a program that would limit out-of-pocket costs to $35 per month. Some people have been paying a lot more than that. Stacie Dusetzina is a professor of health policy at Vanderbilt University Medical Center and has been following this development. Good morning.

STACIE DUSETZINA: Good morning.

INSKEEP: OK. So somebody gave me this figure that won't surprise you, but it makes my eyes pop out of my head - 7 million Americans rely on insulin. How desperately do they need it? How much has it been costing them?

DUSETZINA: Well, as you probably have heard, if you've paid any attention to drug pricing hearings that have happened in Congress over the years, there's always someone who has been affected by the price of insulin, including things like having family members ration insulin and dying as a result of that activity. So it is a very serious problem for people to not be able to access insulin and to ration insulin, not use it as prescribed. So this is a pretty big deal for people who have struggled to afford to pay for insulin and take it as they need.

INSKEEP: Yeah, and we should be clear, this is, for many people, something that is a lifetime - you have to take it for the rest of your life. It's not a one-time thing.

DUSETZINA: Absolutely.

INSKEEP: Which makes it really significant that over the past 20 years, manufacturers have boosted insulin prices by more than 600%. Was there some real reason that they needed to do that?

DUSETZINA: So I think this gets to a complication between what type of price we think about when we think about the price of insulin. So the price that has gone up is the list price, and that's the price that Lilly has just announced that they're cutting. When we think about what our health plans and our pharmacy benefits managers pay, they negotiate that price down. So the price hasn't gone up as much for health plans. The problem is - a key problem is that a lot of patients pay based on that list price. So if you're uninsured, you pay that high price. And if you have to pay deductibles or a percentage of your drug's price, you'll pay based on that high list price. So changing the list price is really key here in why this announcement is something that people have really focused on the last...

INSKEEP: OK, this is really helpful. So this is not maybe 7 million people who are suddenly going to pay a lower price. People who had a good health plan were probably not paying all that much to begin with. But people who have lesser insurance coverage or no insurance coverage are the people who can really benefit here.

DUSETZINA: That's absolutely right. Many people with commercial health plans have insurance that covers insulin more generously than what's being proposed. So they pay less than $35 a month for their insulin. But uninsured people absolutely will benefit from this once these lower list prices are available for products in pharmacies.

INSKEEP: It's easy to say that Eli Lilly then is doing the right thing. But tell me, then, were they doing the wrong thing over the past 20 years as they let the price go up and up and up for the most vulnerable people?

DUSETZINA: I think that that's probably fair. You know, this is a move that they're making, lowering the list price of older insulin products. And it's - these are really products where, because of fierce price negotiation between products and with biosimilar options available, they're really not losing much to be able to change the prices now for these products. So while I think they deserve some credit for making this change, I think that they're really gaining a lot from a reputation standpoint, and they're not losing a lot from a revenue standpoint to make the change now.

INSKEEP: Oh, because - I understand. I understand. But very briefly, could this lead to the reduction in price for other drugs?

DUSETZINA: It's possible. And in fact, for some of the other insulin products, I have seen that there are calls from senators to lower those prices as well. But I don't think I would assume this would lead to lower prices for other brand-name drugs that aren't older products and aren't in this same competitive situation.

INSKEEP: Stacie Dusetzina with Vanderbilt University Medical Center, thanks for this clarity, appreciate it.

DUSETZINA: Thank you so much. Transcript provided by NPR, Copyright NPR.