Drugmakers cave on insulin prices. Why now?

Decisions by two of the world’s biggest insulin producers to offer bigger discounts on drugs used by millions of diabetics are raising questions from Congress about whether the companies could have done so sooner.

On Wednesday, French drugmaker Sanofi said it would increase discounts on insulin for some patients. The move follows recent efforts by Cigna Corp., which runs a major drug plan, and Eli Lilly & Co., another major insulin producer, to lower patients’ out-of-pocket costs for the drugs.

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The actions by the companies, which have come in the middle of a series of hearings in the House and Senate on drug costs, have raised questions from lawmakers about why it took a drumbeat of public pressure before the companies altered their programs.

“It shouldn’t take months of bad press, persistent public outcry and increasing congressional scrutiny to get a company to charge a fair price,” Senator Chuck Grassley, the Iowa Republican who is leading hearings in the Senate, said of Sanofi’s announcement. “That’s not how a functioning marketplace works.”

Sanofi is expanding its “Valyou” discount program. Under the enhanced discounts, some patients would pay $99 a month for what should amount to a month’s supply of Sanofi’s Lantus, Toujeo and Admelog insulins. It’s an improvement from the existing program, which charged patients more for less insulin.

In March, Lilly said it would begin selling a lower-priced version of its top-selling insulin, Humalog, and Cigna this month agreed to cap patient’s out-of-pocket costs for the drugs.

House hearing

At a House Energy and Commerce subcommittee hearing Wednesday, Representative Joseph Kennedy III, a Massachusetts Democrat, referenced the Eli Lilly price reduction, expressing frustration.

“It took 15 years and global outcry on this to do it,” Kennedy said.

Representative Diana DeGette, a Colorado Democrat, said the discount offerings weren’t a permanent solution. “It’s just a temporary Band-Aid,” DeGette said.

Representatives from insulin manufacturers blamed a system that requires them to pay higher and higher rebates to pharmacy-benefit managers to gain access to the patients whose prescriptions the PBMs manage.

“There’s a significant demand for rebates,” said Doug Langa, executive vice president of North American operations at Novo Nordisk A/S.

Lawmakers were frustrated by the finger-pointing that continued throughout the hearing, which featured the three biggest insulin makers and the three PBMs that dominate the market.

“The PBMs blame the companies, the companies blame the PBMs and our constituents say, ‘They’re all no good. Just get rid of the system,”’ said House Energy and Commerce Committee Chairman Frank Pallone, a New Jersey Democrat.

For Sanofi’s expanded program, only cash-paying patients or people who have private insurance are eligible. Medicare and Medicaid bar patients from using drugmaker-funded discount programs, which can be a way for companies to steer patients toward expensive drugs by covering their out-of-pocket costs.

Grassley questioned the lack of a discount for patients in government health programs, saying, “If Sanofi can reduce the price to patients for insulin while still making a profit, I can’t imagine a legitimate reason taxpayers shouldn’t be charged the same price.”

Sanofi said program was designed initially to help patients when their insurance lapsed. The company said that about 10 percent of its insulin patients pay in cash. Drugs like Lantus, a popular long-acting insulin, have a list price of $290 for five pens, according to GoodRx, which tracks drug prices.

Read more: 

• Is killing drug rebates really the answer to high drug prices?
• Probes target insulin drugmakers and pharma middlemen
• Pharma execs in the hot seat on drug prices

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