Insulin price cut is a start

Eli Lilly's decision to slash insulin list prices by 70%, and cap payments at $35 for those who are uninsured, met with intense relief from patients and caregivers and applause from public health advocates.

It was about time.

The pharmaceutical giant's decision came after years of price increases, leading to stories of patients skipping or rationing doses. In more recent years, however, competition has expanded. Between that and efforts by the federal government to get some drug prices under control, Eli Lilly, with one-third of the insulin market, finally made its move.

It was a big one. But now an enormous opportunity awaits — to expand Medicare's newfound ability to negotiate prescription drug prices and reduce costs, especially for the most in-demand, potentially lifesaving medications.

That starts with Lilly's competitors in insulin manufacturing, Sanofi and Novo Nordisk. They face pressure to follow Lilly's move. The insulin situation, however, highlights a broader industry problem — the powerful intermediaries known as pharmacy benefit managers, or PBMs.

PBMs control much of the market for a vast majority of prescription drugs and largely determine the cost to consumers. They also decide which drugs will be covered by insurance plans. Often, their choices are a key reason that prices skyrocket. Unsurprisingly, they also benefit as they pocket administrative fees and share in rebates, often at the consumer's expense. It's in a pharmacy benefit manager's interest to see list prices on drugs like insulin remain high — because when they then establish so-called "discounts," they can keep a larger share as profit, leaving little for the patient.

In 2021, Gov. Kathy Hochul signed legislation establishing some regulations on PBMs. There's more to do. The Federal Trade Commission began an investigation into PBMs last year. The FTC should work quickly; its findings could and should spur larger reforms. Additionally, President Joe Biden's initial 2024 budget proposal includes an effort to allow Medicare to negotiate more drug prices more quickly. Though we await the details, it's the right approach. Only with a larger spotlight, pressure on drugmakers, and the stronger teeth of federal regulation will drug prices fall further. 

An Economist/YouGov poll this month found that more than a third of Americans haven't filled a prescription due to its cost. A majority of Americans say they would support government limits on the price of insulin, cancer medications, blood thinners, and antidepressants. 

No one should have to choose between filling a prescription or paying for rent and food, especially not while those up the supply chain make outrageous profits. Lilly's action shows change can come. It can't stop there.