Eli Lilly Offers Discount for Insulin as Prices Soar -- Update

By Peter Loftus and Joshua Jamerson

Eli Lilly & Co. said Tuesday it would discount the list prices of its insulin brands by as much as 40% for uninsured patients and others paying for the drugs largely out-of-pocket, following an outcry over soaring prices of diabetes treatments sold by Lilly and its competitors.

The price concession, intended for patients who currently pay the highest of out-of-pocket costs, is the latest sign that some drugmakers are bowing to public pressure to rein in prices.

The discounts start Jan. 1 and are available through mobile and web applications from Blink Health, a New York startup that promises consumers lower prices for prescription drugs. Using the apps, patients can obtain the discounts of up to 40% when paying full price at the pharmacy counter, Lilly said. The company will offer the discounts for Humalog, Humulin and Basaglar.

The program is targeting individuals without health insurance or who are in the deductible-paying phase of high-deductible insurance plans. The new discount isn't intended for people who have lower out-of-pocket costs via their standard health-insurance plans, Lilly said, though their insurers may have negotiated separate discounts.

"We did this to make sure people have more affordable access to insulin, " Michael Mason, vice president of Lilly's U.S. diabetes business, said in an interview.

Lilly noted that while some high-deductible plans exempt insulin from the deductible phase, others do require people to pay most or all of the retail price until the deductible is met. Spending by patients who use the new Lilly discount, however, may not count toward their health plan's deductible, Lilly said.

Express Scripts Holding Co., a pharmacy-benefit manager, negotiated the discount on behalf of Blink Health, an Express Scripts spokesman said.

Last week, Novo Nordisk A/S pledged to limit U.S. price increases for its insulin to no more than single-digit percentages annually. Allergan PLC recently pledged to limit price increases for its drugs.

Shares of many drugmakers and industry middlemen have fallen over recent signs that the pace of price hikes is slowing, and that the incoming Trump administration might take action on prices.

List prices for many brand-name versions of insulin have risen sharply in recent years, a problem that has particularly hit patients who pay much of the expense out of pocket.

Since 2011, Lilly has more than doubled the price of Humalog to about $255 per vial.

Former presidential candidate Sen. Bernie Sanders has asked the Justice Department and the Federal Trade Commission to investigate price increases for insulin, and has solicited stories from patients about the impact. Last month, the American Diabetes Association launched a petition drive to call on the drug industry and middlemen to ensure no one is denied affordable access to insulin, and to improve pricing transparency.

Lilly and other insulin makers say they pay sizable rebates to industry middlemen known as pharmacy-benefit managers, which reduce the net cost of their products for many patients. Drugmakers say the PBM-rebate system encourages high list prices and steep behind-the-scenes discounts.

Uninsured patients or those with high-deductible health-insurance plans pay the full list price or a relatively high percentage of the cost.

Lilly said it crafted the discount program after meeting with "leaders in the diabetes community" as well as people who have diabetes, to discuss the rising price of insulin. Lilly also said it started working with Express Scripts earlier this fall on potential options to help people paying full price for insulin.

Write to Peter Loftus at peter.loftus@wsj.com and Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

December 13, 2016 13:55 ET (18:55 GMT)

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