How capping insulin at $35 per month would help

Pharmaceutical giant Eli Lilly, one of three drug companies that dominate the U.S. insulin market, announced Wednesday an expansion of a program that caps out-of-pocket spending on its insulin products to $35 a month for people on commercial insurance plans.

The move follows a similar cap set by a new federal law, the Inflation Reduction Act, which took effect in January and imposed a $35 monthly out-of-pocket spending cap on insulin for people on Medicare, the federal government’s insurance plan for seniors.

It also follows a lawsuit filed by California Attorney General Rob Bonta against Lilly and two other drug makers for allegedly jacking up the price of insulin in recent years.

About 2.6 million Americans with diabetes use Lilly insulin products, the company said, roughly a third of the 7.2 million Americans that use insulin.

Here’s what the changes mean for consumers, when they take effect, and how to access the savings:

People with commercial health insurance

Most Americans — about 219 million people, or two-thirds of the U.S. population — get their health insurance from commercial plans, also known as private health insurance coverage, mostly through their work.

This is the group that stands to benefit from Lilly’s newly expanded outof-pocket cap. The company estimates about 1.1 million Americans on commercial plans use a Lilly insulin product — including the widely prescribed Humalog — and now stand to benefit from the price cap.

A Lilly spokeswoman said the cap can apply to people with Kaiser, one of the largest insurers and providers in the Bay Area, but that they would have to get the insulin at a retail pharmacy that participates in the Lilly program.

Lilly said effective immediately, the $35 monthly cap will apply automatically to people on commercial plans at participating retail pharmacies. The company said “the majority of retail pharmacies” participate in Lilly’s program but did not specify which pharmacies those include. And it did not elaborate on how pharmacies would implement this — for example, whether a consumer who already spent $35 on Lilly insulin that month and needed more would have that additional cost waived, or whether they’d have to pay for it upfront and later seek reimbursement from Lilly or their insurance company.

Spokespeople for CVS, Walgreens, Target and Walmart did not immediately respond to questions Thursday about whether their pharmacies are participating in the Lilly program.

Medicare

About 62 million Americans, mostly people 65 and older, get health insurance through Medicare. People enrolled in Medicare’s prescription drug program Medicare Part D — which covers outpatient prescription drugs, and is the way most Medicare beneficiaries get insulin covered — already have their monthly out-of-pocket costs capped at $35 for all insulin products, not just Lilly’s. This began under the new federal law that took effect in January.

This cap will also apply to Medicare beneficiaries who get their prescription drugs covered by Medicare Part B — which covers injectable prescription drugs usually given in a health care setting — starting July 1, under the same law.

Medicaid (and Medi-Cal in California)

Neither the Lilly price cap nor the new federal law are expected to affect Medicaid beneficiaries, who generally do not pay any — or very low — outof-pocket costs for prescription drugs.

About 85 million Americans are on Medicaid, including 13 million in California, according to federal figures.

Uninsured

People without health insurance can download a “savings card” from Lilly’s website InsulinAffordability.com and present it to the pharmacy.

About 28 million people, roughly 10% of the U.S. population, don’t have health insurance, according to Kaiser Family Foundation. It was not immediately clear how many uninsured people use Lilly insulin and would benefit from the spending cap.