The co-payment for insulin is now capped at $35 for those on Medicare and even many private insurance plans.
Of course, the co-pay is not the actual cost, but part of it. However, drug companies have also lowered the retail price of insulin.
Why would these companies voluntary lose money? Surely you jest.
According to research cited by Reuters, companies like Pfizer, Sanofi and Takeda will raise prices on more than 500 drugs in early January. Pfizer is leading the way, accounting for about 25% of all drug price hikes.
Responding to pressure – and new rules: The drugmakers are cutting insulin prices due to the new rules laid out in the Inflation Reduction Act, as well as increased pressure from the Biden administration and consumer advocates. Another factor is the 2021 American Rescue Plan, which requires drugmakers starting in 2024 to pay higher rebates on medications that have seen price increases in excess of the inflation rate.
The price cuts are expected to actually save the companies money overall as they avoid what could have been massive rebate payments under the new rules. Spencer Perlman of the consulting firm Veda Partners told CNN that the savings will total hundreds of millions of dollars. Eli Lilly, for example, is expected to avoid paying $430 million in Medicaid rebates this year thanks to its timely price cuts on its insulin drugs.
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Any consequences? CBO estimates additional federal spending of $5.1 billion ($4.8 billion for Medicare Part D and $0.3 billion for Medicare Part B) over 10 years (2022-2031) associated with the insulin cost-sharing limits in the Inflation Reduction Act. In addition Medicaid will lose hundreds of millions in rebates from drug manufacturers.
QUINNSCOMMENTARY 
Biden, like Bush II, knows how to buy your votes. That’s how we got Medicare Part D and $35/month for insulin makes about as much sense as the 10% of MAGI established as the “affordable” limit for employer sponsored health care coverage under Health Reform.
No corporate benefits professional is (should be) surprised by all the cost shifting. It is not like this extensive level of cost shifting and price adjustment activity is something new, it is only new in that it applies to Rx.
For comparison, see: https://www.rand.org/news/press/2022/05/17.html “… Prices paid to hospitals during 2020 by employers and private insurers for both inpatient and outpatient services averaged 224 percent of what Medicare would have paid, with wide variation in prices among states, according to a new RAND Corporation report. …”
And, keep in mind that Medicaid reimbursement rates average only about 72% of Medicare rates, so, in other words, private payor reimbursement rates are about 300% higher than Medicaid rates.
Keep in mind, we’ve seen the number covered under Medicare increase substantially as Baby Boomers age in and Health Reform exploded the number covered under Medicaid. In fact, there are almost as many Americans covered under health plans where the government sets the prices (Medicare, Medicaid, VA) as are covered under employer-sponsored plans.
So, government price fixing is a significant component of the cost of YOUR employer’s health plan.
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Does anyone know how they decided on the price of $35?
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No, but is about as logical as why contraceptives were mandated, politics. Why not focus on other more expensive and life sustaining drugs other than diabetes? It all boils down to lobbying groups.
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Nearly 25% of 65+ have been diagnosed with diabetes. I consider that significant. Just wish the medical insurance folks & drug companies quick playing games with their pricing. In 2022 insulin was $1000/month for uninsured and now down to $35/m. I understand that the insulin cost drop is just shifting profit to other drugs.
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But about 31% require insulin. How many rely on heart Rx
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