Over the past two decades, skyrocketing list prices for insulin have threatened medication adherence for the estimated 7.4 million American diabetics who rely on insulin to manage their disease.
With the passing of the 2022 Inflation Reduction Act, Congress addressed the financial strain on nearly three million diabetics by capping insulin prices at $35 a month for Medicare beneficiaries. Eli Lilly, Novo Nordisk, and Sanofi—which together produce 90% of insulins on the market—subsequently reduced the costs of their products for all patients, including those who are uninsured or covered by commercial plans.
While this is a huge step forward for patient access, what will these insulin price caps mean for health plans? To learn more, the MMIT Index team fielded one of its monthly Rapid Event Primers to survey payers on the implications.
We found that payers are cautiously optimistic about the impact of price caps. With insulin now more affordable for more patients, the need to skip or ration doses is expected to decrease. Our respondents anticipate that improved treatment adherence will ultimately lead to fewer ER visits and hospital admissions, better comorbidity management, reduced medical and pharmacy costs, and improved quality of life for patients with diabetes.
However, payers are also concerned about the financial impact of the price caps, as the reduction in insulin rebate revenue could have a detrimental effect on their margins. These losses could potentially be offset by the market entrance of glucagon-like peptide 1 (GLP-1) drugs, such as Ozempic and Mounjaro. Among payers, there is a growing interest in covering GLP-1s approved for weight loss, especially by employer groups. The popularity of these drugs might enable manufacturers to maintain their earnings, despite lowering the cost of their insulin products.