As pub­lic furor mounts, Sanofi makes deep cuts to US in­sulin prices in sav­ings pro­gram

In­sulin, the life-sav­ing hor­mone for the mil­lions of di­a­bet­ics in the Unit­ed States, is be­ing stock­piled, ra­tioned and fore­gone to dis­as­trous con­se­quences, as pa­tients strug­gle to af­ford the soar­ing costs of the drug. Pro­voked and prod­ded with bi­par­ti­san furor, stake­hold­ers in the in­sulin sup­ply chain are tak­ing steps to os­ten­si­bly im­prove ac­cess. On Wednes­day, Sanofi — one of three big glob­al in­sulin mak­ers — pledged that come June, pa­tients will be able to pay $99 to ac­cess up to 10 box­es of pens and/or 10 mL vials per month, a far cry from the cur­rent it­er­a­tion of its sav­ings pro­gram, in which the French drug­mak­er charges $99 for one 10mL vial or $149 per box of pens.

Al­though in­sulin was dis­cov­ered in 1921, ad­vances in ge­net­ic en­gi­neer­ing cat­a­pult­ed hu­man in­sulin for­mu­la­tions to pa­tients with di­a­betes in the 1980s. Rapid-act­ing and long-act­ing hu­man in­sulin analogs were in­tro­duced in the 1990s, and since then oth­er up­grades have been in­tro­duced, how­ev­er, the patents for many for­mu­la­tions in cur­rent clin­i­cal use have ex­pired. To­day, the Unit­ed States is home to more than 30 mil­lion di­a­bet­ics, and the av­er­age price of in­sulin near­ly tripled be­tween 2002 and 2013, ac­cord­ing to Amer­i­can Di­a­betes As­so­ci­a­tion (ADA) es­ti­mates.

This stag­ger­ing and some­what in­ex­plic­a­ble, jump in the price of lega­cy in­sulin prod­ucts gar­nered the at­ten­tion of law­mak­ers. The first Con­gres­sion­al hear­ing fo­cused on drug pric­ing held in Jan­u­ary cen­tered around in­sulin, with par­ents tes­ti­fy­ing that their chil­dren had died af­ter un­suc­cess­ful­ly ra­tioning their in­sulin. In Feb­ru­ary, Sen­a­tors Chuck Grass­ley and Ron Wyden sent let­ters to lead­ing in­sulin man­u­fac­tur­ers: Lil­ly $LLY, No­vo Nordisk $NVO and Sanofi $SNY seek­ing in­for­ma­tion re­gard­ing re­cent price in­creas­es of up to 500% or more for in­sulin. Mean­while, for­mer FDA com­mis­sion­er Scott Got­tlieb has un­der­scored the sig­nif­i­cance of carv­ing out a biosim­i­lar path­way and nur­tur­ing biosim­i­lar com­pe­ti­tion for in­sulin to sub­due high prices.

Sanofi’s move fol­lows Lil­ly’s pledge last month to launch a half-price gener­ic of its most pop­u­lar in­sulin, Hu­ma­log — which gen­er­at­ed near­ly $3 bil­lion in 2018 sales. The US drug­mak­er al­so is­sued a re­port break­ing down what it gets paid, on av­er­age, ver­sus the list price of its in­sulin treat­ments. Be­tween 2014 and 2018, the list price for Hu­ma­log in­creased 51.9% while the av­er­age amount that Lil­ly re­ceived — the net price — de­clined by 8.1%, as the com­pa­ny in­creased (and in some cas­es was forced to hike, it said) the mag­ni­tude of re­bates and dis­counts it of­fers.

The dis­clo­sure is a prime ex­am­ple of the fin­ger point­ing be­tween drug­mak­ers and PBMs. Drug man­u­fac­tur­ers con­tend list prices are ris­ing to com­bat the big­ger re­bates/dis­counts the all-pow­er­ful mid­dle­men ne­go­ti­ate, while PBMs ar­gue that ul­ti­mate­ly the pow­er to set list prices lies with the drug­mak­ers. The losers are the fi­nal end-users — the pa­tients whose out-of-pock­et costs are close­ly in­ter­twined with list prices.

The com­pli­cat­ed in­sulin sup­ply chain has al­so con­found­ed law­mak­ers and re­searchers alike. In a re­cent analy­sis con­duct­ed by an ADA work­ing group — which held dis­cus­sions with more than 20 stake­hold­ers in the in­sulin sup­ply chain — it is un­clear pre­cise­ly how the dol­lars flow and how much each in­ter­me­di­ary prof­its.

Last week, Cigna and Ex­press Scripts $ES­RX said their di­a­bet­ic cus­tomers will not be forced to pay more than $25/month out-of-pock­et for in­sulin, down from the av­er­age $41.50/month last year, al­though pa­tients on high-de­ductible plans were pay­ing much more. The move came ahead of a Con­gres­sion­al hear­ing on Tues­day which put phar­ma­cy ben­e­fit man­agers —in­clud­ing Ex­press Scripts — in the hot seat, as law­mak­ers tried their ut­most to di­gest the job de­scrip­tion of these mid­dle­men, and un­pack the role they play in pre­scrip­tion drug pric­ing.

Since it was launched last April, Sanofi’s sav­ings pro­gram — which caters to pa­tients re­gard­less of in­come and in­sur­ance sta­tus — has re­sult­ed in ap­prox­i­mate­ly $10 mil­lion in pa­tient sav­ings, the com­pa­ny said.

How­ev­er, drug man­u­fac­tur­ers are pro­hib­it­ed from of­fer­ing this type of pro­gram to pa­tients in­sured un­der Medicare, Med­ic­aid, or sim­i­lar fed­er­al or state pro­grams, as per reg­u­la­tions, though Sanofi sup­ports chang­ing these rules, it added.

Last year, about $2.2 bil­lion from the rough­ly $4 bil­lion in Sanofi di­a­betes drug sales came from the Unit­ed States.


Im­age: Shut­ter­stock

Pablo Legorreta, founder and CEO of Royalty Pharma AG, speaks at the annual Milken Institute Global Conference in Beverly Hills, California (Patrick T. Fallon/Bloomberg via Getty Images)

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Dan O'Day, Gilead CEO (Andrew Harnik, AP Images)

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Paul Hudson, Sanofi CEO (Getty Images)

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Roger Perlmutter, Merck R&D chief (YouTube)

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David Chang, Allogene CEO (Jeff Rumans)

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