Following public backlash due to the outrageously costly insulin is in the United States, insulin-makers are slashing their prices, a decision that will even save pharmaceutical companies a lot of money.
Novo Nordisk, America’s second largest insulin-maker, has decided to slash by up to 75% certain products. For example, a 10 mL vial of NovoLog will go from $289.36 to $72.34, and a NovoLog Mix 70/30 FlexPen will see its price drop from $558.83 to $139.71.
Due to public outrage, lawmakers have worked hard to force drugmakers to lower their prices. To that effect, the Inflation Reduction Act of 2022 was enforced to limit out-of-pocket insulin costs to a monthly $35 for Medicare Part D beneficiaries. By adjusting their prices to the maximum price imposed by the Inflation Reduction Act of 2022, pharmaceutical companies Eli Lilly and Novo Nordisk won’t have to make extra payments to Medicaid according to the rebate cap imposed to ensure that the health insurance program pays the lowest and best possible price for prescription drugs. According to the rebate agreement, Medicaid covers and purchases the drug put out by pharmaceutical companies as long as they pay back a rebate ensuring that the costs would remain low. For example, if a product’s average price is $100 – paid by Medicaid – and the best price is $70, the basic rebate would be $30 – paid back by drug makers to Medicaid. Big Pharma could avoid paying $3 billion in rebates because of the rebate cap. It is expected that Sanofi, the country’s third top insulin maker, will also follow in Eli Lilly’s footsteps.