Insulin Access and Affordability
Changes in the U.S. health care system have led to greater consumer cost-sharing and a growing number of patients exposed to a medicine’s full retail price. This has left some Americans struggling to pay for their medicine.
Lilly is actively working with other key stakeholders to seek long-term policy solutions to address the gaps in our current health care system. We remain committed to finding solutions – both legislative and non-legislative – that will help people with chronic diseases have affordable access to their medicine. Find more information below.
Insurance design is changing and patients are responsible for more cost sharing. More and more, Americans do not pay for their medicines with a co-pay. Now, nearly half of adults with commercial insurance have a high-deductible health plan (HDHP), meaning people might pay thousands of dollars out-of-pocket before coverage kicks in. This is a big contributor to the insulin affordability issue.
Lilly, like other manufacturers, sets a list price for our medicines. To enable patient access, Lilly pays rebates and other discounts to payers and other supply chain entities. The final amount that Lilly ultimately realizes after paying these rebates and discounts is sometimes called the "net price." Across our U.S. product portfolio, Lilly’s average net price after rebates and discounts – the final amount we receive – has fallen from 59 percent of list price in 2014 to 46 percent in 2018. The amount of Lilly's rebates and discounts continues to increase through a combination of factors – including increased market competition, pharmacy benefit managers' (PBMs') increased negotiation leverage and rising mandatory government discounts. For insulins, rebates to the government, in certain programs, result in net prices among the lowest in the world, and lower than developed markets with single-payer, direct-purchase models.
These rebates continue to widen the gap between list and net prices, the amount that is ultimately realized by Lilly. Because of these growing rebates and discounts, the average U.S. net price of Lilly medicines – the final amount we receive from selling our products – declined 0.5% last year.
Factors that create this gap also contribute to the rising costs consumers pay at the pharmacy. The trends toward high-deductible health plans and greater consumer cost-sharing have exposed some people to medicines' full retail prices. Under this type of insurance design, many consumers are not benefitting from the rebates Lilly provides and might pay the full retail price until they meet their deductible and a percentage of the retail price thereafter.
We continue to advocate for insurers to pass through our negotiated rebates directly to consumers at the pharmacy counter.
The current rebate system needs to be reformed. Insurers should pass through the negotiated discounts and rebates directly to consumers. Doing so could save commercially insured patients with high deductibles and coinsurance more than $800 annually and would increase premiums by 1 percent or less.
A rebate pass-through would lower patients’ out-of-pocket costs at the pharmacy counter, with the greatest benefit realized by patients taking more highly rebated products, such as insulin.
First Dollar Coverage
Lilly is supportive of efforts to exempt health care services for chronic conditions – including medicines such as insulins – from a health insurance plan’s deductible (“first dollar coverage”).
The Department of Treasury/Internal Revenue Service recently released guidance confirming that HDHPs may provide coverage of insulin and other listed chronic disease medicines without first satisfying the minimum deductible otherwise required for HDHPs.
Medicare Part D OOP Caps
Lilly supports legislative action to cap out-of-pocket costs for patients in Medicare Part D. We believe a cap would provide a critical financial safeguard for patients, leading to better treatment adherence and improvements in overall health status.
Absent legislation around rebate pass-through and first dollar coverage, employers can play a key role in patient access and affordability by offering benefits that help reduce their own employees' medical costs. As an employer, Lilly provides the following benefits in our employee health plans:
- Prescription drug rebates are passed through to the consumer at the pharmacy counter to help our employees, retirees, and their families with their OOP medicine costs. In 2018, more than 11,000 Lilly employees, retirees and their families benefited – and their costs were reduced by more than $2 million.
- Preventive and chronic disease medications, such as insulin, are exempted from the deductible of our employees’ health plans to ensure there are no barriers for accessing medicines critical to their overall health and well-being. Beginning in 2020, Lilly will reduce co-insurance to zero for insulins, meaning our plan participants will pay nothing at all.
- Contributions are made to employees’ and their families’ Health Savings or Health Reimbursement accounts at the beginning of the year, with funds available immediately.
- Eligible employees and their family members with diabetes are provided a free connected glucose meter and related supplies, along with real-time support from trained diabetes educators.