Why Cheaper Insulin Today Risks Higher Costs Later
Lower copays reduce expenses for patients now but could also protect drug-company profits.
After years of complaints about runaway drug costs, pharmaceutical companies are finally reducing the price of insulin. On March 1, Eli Lilly & Co. slashed some versions by 70%. Two weeks later, Novo Nordisk A/S and Sanofi SA responded with similar cuts. Just as important for diabetics, who often pay hundreds of dollars monthly for the vital medication, Lilly and Sanofi instituted new policies aimed at capping copays—what patients must shell out at the pharmacy counter—to $35 per month for many versions.
While all this is undeniably great news for people with diabetes, industry watchers say that in the long run, limits on out-of-pocket payments risk propping up insulin prices, not cutting them. The changes threaten to tamp down competition from new, cheaper alternatives known as biosimilars, keeping insurance premiums high and preventing the rivals from gaining traction, according to Robin Feldman, a law professor at University of California College of the Law at San Francisco. “It looks like a gift to the patient, but the costs to the plan, not to mention the health-care system, are carefully camouflaged,” she says.