EIi Lilly Slashes Insulin Price Under Pressure from Feds

Drugmaker also to limit costs to $35 per month for many customers

By
Nathan Reiff
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Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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Published March 01, 2023
Eli Lilly

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Key Takeaways

  • Eli Lilly will reduce prices of some of its insulin products by 70%.
  • The drugmaker will also expand its Insulin Value Program to limit out-of-pocket costs for patients to $35 per month.
  • The Inflation Reduction Act of 2022 set a $35 per month price cap for insulin users receiving Medicare benefits, and President Biden has called on Congress for a blanket $35 per month cap.
  • The cost of Lilly's Humalog insulin product has climbed by 1,000% or more in the last 30 years.

Eli Lilly & Co. (LLY) said it will slash prices on insulin products by 70% starting in the fourth quarter amid rising federal pressure to reduce the cost of the diabetes drug.

The company will also expand its Insulin Value Program, capping out-of-pocket costs for patients at no more than $35 per month at participating retail pharmacies for customers with private insurance. Lilly's non-branded insulin, Lispro, will be reduced to $25 a vial.

Lowering insulin costs has been a priority of President Joe Biden's administration. The Inflation Reduction Act of 2022 capped the price of insulin for Medicare beneficiaries at $35 per month but didn't stipulate a limit for individuals with private insurance.

More recently, in his State of the Union speech, the president called on Congress to set a $35 per month limit for all insulin users, regardless of insurance. Lilly said at that time that it supported a broad price cap.

Still, Lilly has historically been a driver of skyrocketing insulin prices. The cost of its Humalog has increased by more than 1,000% in about three decades.

Lilly's price reduction applies only to its older insulin products. Many of the 30 million diabetic Americans use drugs produced by companies such as Sanofi and Novo Nordisk, neither of which has yet to announce a price cut.

Lilly stock is up about 1.4% for the day as of 3 p.m. EST on March 1.

Article Sources
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  1. Eli Lilly & Co. "Lilly Cuts Insulin Prices by 70% and Caps Patient Insulin Out-of-Pocket Costs at $35 Per Month."

  2. CNBC. "Lilly To Cut Insulin Prices by 70%, Cap Costs at $35 Per Month for People with Private Insurance."

  3. New York Times. "Eli Lilly Says It Will Cut the Price of Insulin."

  4. Yahoo! Finance. "Eli Lilly and Company (LLY)."

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