Blog #149- 3/3/23
ANOTHER DRUG COMPANY HUSTLE
By Richard Davis
On the surface it looks like an amazing step forward. Eli Lilly, one of the major producers of insulin, (among the three companies that control 90% of the insulin market)1 announced that it is lowering the cost of some of its older insulin products by 70%. It was a shrewd and coldly calculated move to make the company look good in the public eye and fend off the inevitable mandates that the U.S. government is working to implement.
Recently, legislation was passed to cap the price of insulin at $35 a month for people enrolled in the Medicare D program. Democrats tried to get the bill to apply to all Americans but their efforts were stymied by the pharmaceutical lobby that owns more politicians than most other businesses.
Eli Lilly knows that it is just a matter of time before new laws are enacted to lower insulin prices across the board so they made a pre-emptive strike in the insulin wars. According to the New York Times, “Lilly trumpeted its decision as a victory for patients. In reality, though, Lilly’s moves are more limited than they initially appear. Lilly’s existing $35 cap on out-of-pocket payments will be easier for privately insured patients to take advantage of.
But the policies announced Wednesday will not have much, if any, effect on what many people are actually paying.”
The Lilly cuts only apply to people with commercial insurance and industry experts are making it clear that Lilly will suffer few, if any, financial consequences from this new price cut because they have already cut the prices of some of their products that pass through the hands of pharmaceutical industry middlemen.
The Times article goes on to explain that, “David Ricks, Lilly’s chief executive, acknowledged in an interview on Wednesday that there was no guarantee that the company’s changes would result in insurers paying less for Humalog, though he said he expected that would happen. In addition, the lower list prices, which will take effect over the course of this year, only apply to Lilly’s older insulin products. “I don’t think that these prices are quite as impressive as they look when you first see them,” said Stacie Dusetzina, a professor of health policy at Vanderbilt University School of Medicine. “It doesn’t necessarily mean that Lilly is taking a big financial hit to do this.”
The mainstream media, in their usual rush to dummy down the news, trumpeted headlines that make it look like Eli Lilly did something extraordinary and that Lilly has done what Biden, Bernie Sanders and many others have asked them to do in relation to the high price of insulin.
In fact what is really happening with this announcement is that Eli Lilly has exploited the media and the seven million diabetics in this country who need insulin to survive by using them as pawns in the early stages of a public relation war that they have begun to wage.
I am trying to imagine what took place in the meeting rooms of Lilly executives before this major announcement. They knew that the handwriting was on the wall and they most likely decided that they had do something that made them look like the good guys while still protecting their bottom line.
This whole maneuver is nothing more than bait and switch on a grand scale or perhaps a new version of using a shill to play the shell game with people’s lives. The Times article makes this clear. “Mr. Ricks said that Lilly opposes “price setting from the federal government,” saying his company and other drug makers need incentives to innovate and develop improved versions of insulin. Asked whether Lilly would rule out further price increases for Humalog and the other products for which it announced price cuts on Wednesday, Mr. Ricks declined to make a firm commitment. He said the company has not increased the list price of any of its insulin products since 2017.”
They didn’t have to make those increases because they had already increased prices 1200% from 1996 to 2017. Eli Lilly made $7 billion in profits last year. If they took a billion dollars less in profits they could give free insulin to all the diabetics who buy their products. That would be earth shattering news and a decision based on morality and ethics while respecting the history of the development of insulin.
Don’t hold your breath. Not much will change for the lives of American diabetics until the government forces real change in insulin pricing.
