Insulin Prices Capped by Eli Lilly

After a six year legal battle, drug maker Eli Lilly has agreed to a settlement valued at up to $500 million.  Relatively recently, Congress has taken a keen interest in some of the practices of both manufacturers of prescription drugs, and so called pharmacy benefit managers (PBMs).  Eli Lilly is one of the nation’s oldest manufacturers of prescription drugs, and is largely identified by its introduction of Prozac to market in 1988.  Here are the details of the settlement, which benefits virtually anyone who was prescribed insulin made by Eli Lilly from January 1, 2009 to the date of the settlements final approval –

The amount of the settlement consists of two separate aspects:

1. A four-year period of time whereby Eli Lilly will place a price cap of $35 on certain brands of insulin.  It is estimated that this price cap will save American consumers up to $500 million over the four-year period.  (Note: Eli Lilly currently manufactures several different branded insulin products.   The settlement specifically addresses the brands Humalog, Humulin, and Basaglar.)
2. A $13.5 million fund accessible by people no longer using the affected insulin products, and/or those enrolled in Medicare or Medicaid programs.  (Note: This fund will also be used to pay for related administrative and legal fees associated with the settlement.)

Importantly, the Inflation Reduction Act passed in 2022 caps certain insulin brands at $35 per month for patients on Medicare.  In addition, Eli Lilly voluntarily agreed to cap the price of insulin at $35 or less per month, back in early March, 2023 for its non-branded insulin, Humulin, and Humalog.

Drug makers Novo Nordisk (makers of NovoLog and Levemir insulin) and Sanofi (makers of Apidra and Lantus insulin) were included in the litigation, but neither has agreed to any settlement as of the time of this blog post.  Interestingly, both have voluntarily agreed to cap the price of certain insulin brands that they manufacture.  Together, Novo Nordisk, Sanofi, and Eli Lilly control nearly 90% of the entire insulin market.

In a 2022 study conducted by the Annals of Internal Medicine, it was estimated that 1.3 million Americans ration their intake of insulin, solely due to the cost of the drug.  And according to the American Diabetes Association, the price of insulin tripled between 2002 – 2013.  Some of the more shocking testimony that came out of the litigation brought to light that some patients resorted to intentionally starving themselves in an attempt to control blood sugar levels.  Still others would intentionally allow their bodies to slip into Ketoacidosis, a severe complication associated with diabetes, in order to gain access to emergency room care.

While the agreement between Eli Lilly and the litigants is technically not yet finalized, it is expected that the U.S. District Court for the District of New Jersey will do so soon.  In addition, it is anticipated that more manufacturers will follow suit and voluntarily reduce the price of their insulin.  And congress has already passed a bill to compel manufacturers to cap insulin prices and if the senate follows suit, we’ll likely see a federal law regulating insulin pricing.

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