By Geoffrey Smith
Investing.com -- Eli Lilly (NYSE:LLY) said it will cut the price of its most commonly prescribed diabetes drugs by 70% and cap out-of-pocket costs for patients at $35 a month, bowing to pressure from the public and from politicians.
The price cuts will only be introduced in stages, and won't apply to its branded Humalog drug – the one most commonly prescribed for diabetes sufferers - until the fourth quarter.
Lilly will start by cutting the price of its non-branded insulin, Lispro Injection to $25 a vial from May 1st. Lilly, which has a 30% market share in the U.S. for insulin drugs, said this will make it the lowest list price mealtime insulin on the market.
As of October, it will cut the list price of Humalog and Humulin by 70%.
"While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone and that needs to change," said Lilly's chairman and CEO David Ricks.
He added that "Because these price cuts will take time for the insurance and pharmacy system to implement, we are taking the additional step to immediately cap out-of-pocket costs for patients who use Lilly insulin and are not covered by the recent Medicare Part D cap."
The new limit on out-of-pocket costs is in line with the cap outlined by U.S. President Joe Biden on Tuesday, who accused the pharma industry of profiteering with regard to a disease that affects 10% of Americans.
"Look at the profit margins of these companies," Biden said. "They're hundreds of billions of dollars. It's not — it's not like they're getting hurt."
Eli Lilly stock fell 0.3% in premarket trading in response. The shares have been under pressure from political campaigning against its pricing policies for several months already.