Pharmaceutical giant Eli Lilly pulled the curtain back on the confidential pricing structure for one of its blockbuster drugs Monday, disclosing for the first time what it charges wholesalers versus what many patients typically pay.
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The company’s list prices for its popular insulin injection Humalog, versus what most patients are charged after insurance company rebates and other discounts, highlight the disparity in prices between uninsured and insured patients. The move is also a pre-emptive one as the Trump administration and Congress pressure drugmakers for more transparency and to lower drug costs.
The “net price” patients actually pay for Eli Lilly’s insulin fell by 8.1 percent to $135 a patient per month in 2018 from $147 in 2014, the company said in a shareholder report released Monday. The net price is the total paid after factoring in rebates and discounts. The insulin’s average list price before the discounts rose 51.9 percent to $594 per patient each month.
“We believe that the additional information disclosed … will provide greater transparency into the significant rebates and discounts we provide to payers and other supply chain entities for this important medicine,” the company said in a statement to CNBC.
The report comes after the Senate Finance Committee, led by Chairman Sen. Chuck Grassley, R-Iowa., launched an investigation into rising insulin prices, writing to Eli Lilly, Novo Nordisk and Sanofi, asking them why the cost of the nearly 100-year-old medication had rapidly risen.
High drug costs have become a rare bipartisan issue with lawmakers on both sides of the aisle demanding something be done. President Donald Trump has made lowering prices one of the key issues of his administration. Democrats are jockeying to prove they can lead reform.
The Centers for Disease Control and Prevention estimates more than 30 million Americans have diabetes. The annual cost of insulin for people with Type 1 diabetes in the U.S. nearly doubled from 2012 to 2016 to $5,700 from $2,900.
Drugmakers argue these prices are simply the price that’s advertised, not what consumers actually pay. But people without insurance may be forced to pay upfront, sometimes leaving them with a mountain of debt.
Drug companies have blamed pharmacy benefit managers, sometimes called middlemen, for the sticker shock some patients see at the counter. Drugmakers argue that PBMs should pass the rebates negotiated with manufactures along to patients.
The Trump administration earlier this year proposed a rule to end the industry-wide system of rebates, a change that Lilly and other pharmaceutical companies welcomed.
Earlier this month, Eli Lilly announced plans to sell a half-price version of Humalog. The rebranded product called Insulin Lispro would be $137.35 per vial. Humalog, which makes $3 billion in annual sales, will remain available, Eli Lilly said.
Eli Lilly, with a market cap of more than more than $132 billion, has seen its share rise 67.7 percent over a 12-month period. The stock is up more than 10 percent this year.
–Reuters contributed to this report.