While the West Virginia Legislature debated making insulin more affordable, one pharmaceutical company surprisingly stepped up.
On March 1, Eli Lilly announced it would limit monthly patient out-of-pocket costs to $35 or less for its most common insulins: its non-branded insulin starting in May; and brand-names Humalog (insulin lispro injection) and Humulin (insulin human injection) by the end of 2023. According to Lilly’s website, the $35 copay is in effect for certain pharmacies and people with private insurance.
But Lilly admits “7 out of 10 Americans don’t use Lilly insulin” — which means there are still a lot of insulin-dependent people out there who won’t benefit unless the government steps up or other pharmaceutical companies decide to follow suit.
There are those who believe life-saving medicine shouldn’t cost anything and those who believe it is wrong to force companies to lower prices for ideological reasons. But there is a sweet spot where ethics and capitalism intersect — where affordability for the customer meets healthy (not exorbitant) profit for the manufacturer. That’s where Lilly currently sits with its voluntary copay cap, and it’s where many states have been trying to get through legislation.
Here’s the thing: According to a 2018 study, it costs $2.28-$3.37 per 1,000 unit vial of human insulin, and — allowing for a 30% profit margin — it should cost less than $71 a year for someone who uses 40 units a day. Insulin analogues are more expensive, but even then it should only cost $133 a year.
Even accounting for inflation, the cost of human insulin is less than $85 per year and most analogues less than $160 per year — less than $8 and $15 a month, respectively, at 2023 prices. At $35 per month, there’s still at least a $20 profit margin.
For those who skipped all the math: Capping out-of-pocket insulin costs at $35 still leaves a sizeable profit margin for companies.
A drug someone requires to stay alive shouldn’t cost a fortune; it should be priced reasonably enough that the vast majority of people can afford it. People who rely on insulin should not have to ration it, or choose between it and food or shelter.
Pharmaceutical companies that make and sell drugs should be allowed to make profit. Many invest in research and development, which in turn allows them to invent new drugs or refine older ones. This is important, too.
However, it seems extreme to allow companies to make hundreds of dollars on something that took less than $20 to make. And it would behoove pharmaceutical companies to remember that a lifelong customer who can afford your product is more profitable than one who can’t — and a live costumer is more profitable than a dead one.
Eli Lilly is right to move toward making insulin more affordable — both in a moral and business sense. Other pharmaceutical companies should voluntarily follow suit. If they don’t, federal and state governments should give them a nudge in the right direction.