Three drugmakers, which account for roughly 90% of the insulin in the U.S. market, in March 2023 announced that they will cap the cost of insulin for people with private insurance plans.
That includes those on employer-sponsored group health plans and plans purchased on a government-run exchange. The changes mean some or many of your employees will see significant reductions in their pharmaceutical outlays, particularly if they have high copays or deductibles.
The moves come after the Inflation Reduction Act, signed into law in 2022, capped out-of-pocket insulin costs for seniors on Medicare at $35 per month. However, the law does not apply to people younger than 65 who also need insulin.
According to the Centers for Disease Control and Prevention, an estimated 28.7 million people — or 28.5% of the population — were living with diagnosed diabetes in 2022, and chances are high that most employers have workers with the condition. Out of that population, 8.4 million use insulin, according to the American Diabetes Association.
Eli Lilly was the first company to announce, on March 1, that it would cap the cost of all its insulin products at $35 per month, with immediate effect.
On March 14, Denmark-based Novo Nordisk announced that it would lower the U.S. list price of some of its insulin products by up to 75%, putting the fast-acting insulins NovoLog and NovoLog Mix 70/30 at $72.34 for a single vial and $139.71 for a pen. The new pricing will take effect Jan. 1, 2024.
Finally, Sanofi two days later announced that it would cap the out-of-pocket cost of its most popular insulin, Lantus, at $35 per month for people with private insurance. This change also takes effect Jan. 1, 2024.
These changes will bring relief to millions of Americans, particularly after years of insulin makers jacking up their prices. A report on National Public Radio in 2022 noted that the cost of insulin had increased 600% in the past 20 years.
Another report found that some people with high-deductible health plans were paying $350 to $600 a month, for a medicine that costs $6 to make.
There are moves afoot to force the industry to cap the price at $35 a month. Legislation has been introduced in Congress that would force drugmakers to cap their insulin price at that level.
You may want to circulate this news with your employees, so they are aware of the new pricing. A 2022 analysis by the Kaiser Family Foundation found that most people on private health insurance would benefit:
- In the individual market, the median cost health plan enrollees pay for insulin is $62 per month. One-quarter of them pay $105 a month.
- In the small group market, the median cost health plan enrollees pay is $54 per month, while one-quarter pay $83.
- In the large group market, the median cost health plan enrollees pay is $54 per month, and one-quarter pay $77.