Companies Respond

Companies Respond
WebMD reached out to the three companies that make insulin medications.

Susan Brooks, a spokeswoman for Sanofi, maker of Lantus and Apidra, says the net price of the two drugs “over the last 5 years has actually decreased.”

Despite the net price going down, out-of-pocket costs for some patients are going up.

The price consumers pay for insulin is part of a complicated system of price-setting for prescription drugs in the United States. Manufacturers set a base price for their drugs and then negotiate with third parties known as pharmacy benefit managers. These PBMs are hired by insurance companies.

The PBMs have great power in deciding which brand of drug an insurance company will cover for its customers. Thus, they can negotiate lower prices from manufacturers. For example, if a manufacturer lists a drug at $100 a dose, PBMs might negotiate that price for the insurance companies down to $80. But the consumer — the one in need of the drug — would still pay $100 before any insurance coverage.

Drug companies tend to blame the pharmacy benefit managers for the higher price consumers are paying. Insurance companies, meanwhile, largely blame manufacturers.

Brooks, the Sanofi spokeswoman, says the company in 2017 made a commitment to limit price increases “to no greater than medical inflation,” which is the rate at which health care costs in general rise each year.

Eli Lilly, maker of Humalog, has launched a program offering the medication at a 40% discount. And Novo Nordisk, maker of NovoLog, has pledged to limit future price increases.

“We know that the public has an impression that companies like ours realize all the profits from the ‘list price’ increases we’ve made over the last decade,” says Ken Inchausti, director of corporate communications for Novo Nordisk. “In other words, a list price increase by XX percent leads to an automatic XX percent profit for the drugmaker. We believe that is misleading, and here’s why: As the manufacturer, we do set the ‘list price’ and have full accountability for those increases.”

But, he says, after the company sets the list price, the negotiations with PBMs impact the final costs.

Pharmacy benefit managers demand greater savings, Inchausti says. As the rebates, discounts, and price concessions go up, he says, “we were losing considerable revenue — revenue we use for [research and development], sales and marketing, education, disease awareness activities, and medical information support.”