Net Effects: Price Reductions
Collectively, these policy changes serve to combat the growing bubble that has expanded between insulin list prices and net prices, driven by the rebates and discounts privately negotiated between insulin manufacturers and the health insurance/PBM industry.
Manufacturers are behooved to enact price reductions to avoid triggering monumental rebates, such as the Medicaid rebates that could outweigh net sales for insulins sold to Medicaid beneficiaries in 2024.
Current and Anticipated Insulin Price Reductions
Eli Lilly
Novo Nordisk
Sanofi
The rationale driving these insulin price cuts is likely multifactorial – a combination of the aforementioned reasons of appeasing the masses, garnering public goodwill, complying with IRA stipulations, and avoiding potentially disastrously high Medicaid rebates per the 2024 policy update removing rebate caps.