What's behind Ely Lilly's plan to cut insulin prices by 70%?

Eli Lilly announced a reduction in insulin prices. The discount will affect three products and goes as high as 70%. The pharma giant announced the decision after months of political pressure and facing potential new products about to reach the market.

In a statement, the company said that the new prices would help Americans that need the hormone to navigate a "complex healthcare system" and make their products more accessible.

The company's most affordable insulin will decrease from over 80 dollars to 25 from May 1. Their most commonly prescribed product, Humalog, will go from around $500, for a five-pack, to $160. It will change by the last quarter of 2023.

There are only three manufacturers of insulin in the US: Ely Lilly, Sanofi, and Novo Nordisk. For now, the other two have not officially announced any reductions.

Lilly also announced that it would launch a product to compete with Sanofi. It is called Rezvoglar, and the company claims it will cost 78% less than its competitors.

Insulin is a natural hormone that controls blood sugar levels and transforms food into energy. The pancreas secretes it.

Usually, people that need external doses of insulin have diabetes. People with type l diabetes need it daily because their body doesn't produce it naturally. People with type ll diabetes use it occasionally to help control their blood sugar levels.

The team of scientists who discovered insulin sold the patent to the University of Toronto in 1921. It cost only 3 dollars, as the researchers hoped to make it accessible for everyone. The university promised one year of distribution monopoly to Eli Lilly in exchange for its mass production of the new drug.

However, prices have risen significantly since. Companies have issued new patents, and the market has changed. According to a study published in the medical journal The Lancet and collected by The Washington Post, insulin price has grown 200% between 2007 and 2018.

Elly Lilly decided to lower its insulin prices amid an intense political climate pressuring pharmaceutical companies. However, Larry Levitt, the executive vice president for health policy at KFF, formerly known as the Kaiser Family Foundation, told NBC that it also faces the threat of competition from outside the industry.

NBC cites the case of Civica Rx, a nonprofit company in Utah that announced last year it would launch affordable insulin at no more than $30 a dose or $55 for a pack of five insulin pens.

Aside from industry pressure, Lilly also had to battle with President Biden's pressure to reduce the price of their insulin. The democrat declared insulin prices one of his priorities since the 2020 campaign.

Congress democrats issued a $35 monthly price cap for insulin. Initially, the program would affect Medicare and privately insured patients. Still, the Republican party blocked the measure for the second group.

So the pressure continued. During the State of the Union address in January, President Biden pressured Congress to issue a price cap for every patient, including privately insured ones.

According to the American Diabetes Association, around 8.4 million Americans need insulin monthly. So the price reduction will benefit a significant number of patients.

The price cap will also reduce the disease's fatal effects in the US. A study published in the Annals of Internal Medicine, and collected by The Washington Post, found that 16.5% of Americans that need insulin rationed use in 2021.

The price reduction will significantly improve the lives of those who rely on insulin and their families. According to a 2022 Yale study, they spend around 40% of their left income, after housing and food, on it.