One of the big stories making the rounds and raising emotions in the Diabetes Community right now is Eli Lilly's announcement that it's launching a new, so-called "authorized generic" version of its Humalog insulin that is 50% off the very high list price of that life-sustaining medication.

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The pharma giant announced the new lower-priced Insulin Lispro on March 4, sparking many questions and fueling speculation as to why this didn't happen years earlier -- as insulin prices skyrocketed and people have been dying as a result of rationing and lack of access.

We've covered the insulin pricing crisis at length, so there's no need to rehash how big of a systematic issue this is or all that's been done (or hasn't been done) on this front. We phoned in to a Lilly press briefing this week, and based on that and our additional reporting, today we bring you answers to a set of pertinent questions on Lilly's new move:

 

What's an "authorized generic" insulin? This is a specific FDA-regulated category. When it comes to insulin types, there's a lot of confusing language -- "analogues," "animal insulin," "biosimilars," "follow-on biologics," "generic," and "Wal-Mart insulin." Forget about all of that, and just think of it this way: Humalog was the first laboratory grown (analogue insulin) released in 1996, and while there's another version known as Admelog that Sanofi launched last year, the new Lispro product is the first "authorized generic" for Humalog -- meaning it's identical to the original Humalog and didn't need any additional FDA approval; Lilly says it can "just slap on a new label" and let the federal agency know it's done that. For detail on the regulatory side of this, here's the official FDA page on "authorized generic" medication.

Is it really the same insulin? Yes, it is. That's part of what goes into the above-mentioned definition of an "authorized generic." Think of it like water coming out of the same tap, but going into two bottles with different labels. Instead of being called Humalog, it'll simply be labeled as Insulin Lispro. Lilly says everything else about the medication itself is the same, from dosage to quality aspects. Except one version will carry a list price of 50% less than Humalog, which has been hovering at $274 a vial since May 2017.

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Why not just lower list prices for Humalog? Blame the rebate system, Lilly says. That is, Lilly (and other insulin makers) cite the systematic issues surrounding how insurers and PBMs (Pharmacy Benefit Managers) currently require rebates in exchange for including a particular product on an insurance formulary to allow access; they claim this is the reason for their inflated list prices (note: not everyone agrees). Basically, they say PBMs are forcing their hands and as a result, Lilly says that tampering with the current list price of Humalog would disrupt access to a huge number of people who currently get it through insurance or Medicare at an affordable rate and aren't exposed to the list prices. Introducing this new low-cost Lispro version is "a less disruptive approach to reducing list prices and still provides an answer for people who need help," Lilly says. Also worth noting: Those traditional discount programs or savings cards that Pharma rolls out aren't at play here, because those don't apply to Medicare and this new Insulin Lispro product is a specific way allowing for Medicare Part D folk to have access to this lower list price.

Why 50% off the list price? Why not more? Straight from the Lilly spokes-folk: "We are balancing the importance of affordability with awareness of potential disruption to the entire system. The 50% discount provides significant relief for people who need help, along with many other solutions available through our Lilly Diabetes Solution Center."

Remember, Lilly announced that Solution Center and helpline in Summer 2018 as a resource to help people find out their options for better access and affordability on Lilly-branded insulins. To date, the company says they get 10,000 calls per month to their call center and they're able to assist people with diabetes as it relates to insulin.

Does this mean Insulin Lispro will be "on formulary" and covered by insurance now? Maybe, but not necessarily. Lilly hopes that insurers and PBMs will consider including this lower-priced Insulin Lispro on formularies for coverage. Although, if that does't occur, Lilly notes that Humalog will remain available for those accessing it through insurance plans as they have been (because payers getting rebates may opt to continue on that route). The company says it would like to see insurers make this new product apply to deductibles, but it's up to the payers to decide that. At this time, though, Lilly recognizes that those in the D-Community who will likely benefit from this the most are those without insurance or exposed to high deductibles and have to pay a cash price for their insulin.

On the market pressure point, this quote from Lilly says a lot: "We hope our colleagues in the payer community -- insurers, pharmacy-benefit managers and employers -- embrace this new way of operating and reward lower list prices."

Why did Lilly do this now and not years ago? Good question. Especially since the Humalog patent expired in 2014. And no matter what the insulin company says, clearly they could've made this move a long time ago had they wanted to. Only now, as public pressure is increasing, state legislators are taking action and Congress is putting Pharma in the hot seat on drug and insulin pricing, does Lilly unveil this.

Still, Lilly Diabetes execs tell us that they've been working on this specific pathway for an authorized generic going back to 2017 and that last year was a key year in learning that they could, in fact, do this without endangering access to Humalog for folks on private and Medicare beneficiaries. "Cumbersome government regulations" may sound to some like a lame excuse to keep status quo, but there is some undeniable truth there -- in addition to protecting its own bottom line.

Here's what Lilly officially says about the timing: "We’ve had in-depth conversations internally and with CMS for a long time, and many of the mechanics – such as manufacturing, and plans for distribution and stocking – started last year. We’re now at a place where we can move forward."

Does this mean Lilly is going to discontinue Humalog? No. Lilly says they have no plans to do that. The company also emphasizes that it will continue working on R&D to innovate better insulins. You can take that at face value or not, but the point as of now is there doesn't appear to be a path to discontinuing Humalog.

Fine, it's 50% off now, but what stops Lilly from raising the list price on Lispro going forward? "We understand the needs of people in the diabetes community and are committed to finding solutions for them, which is why we are bringing additional solutions forward. While we cannot comment or speculate on future prices, our last price increase on Humalog was in May 2017. We are working toward a more sustainable healthcare model and we hope this decision is a catalyst for positive change across the U.S. healthcare system." Short answer: They're talking the talk, but there's no guarantee.

When will Insulin Lispro be available? Lilly had already been mass-producing it by the time of the initial announcement in March. It was finally launched in late May 2019. It's available in vials and pens at a discounted list price rate of $137.35 a vial and $265.20 for a five-pack of KwikPens. Pharmacies will be key to awareness, so Lilly will be working with pharmacists nationwide to let them know about this option for their insulin-using customers. The vision is that any Humalog user who walks into a pharmacy can get cost-comparison information, and from there their doctor can write an Rx accordingly.

Not All Insurance/PBMs are Covering It: Even with this being half the cost of Humalog, not all insurance plans or the Pharmacy Benefit Managers (PBMs) that write the formularies are opting to cover this half-priced Insulin Lispro. In April, Express Scripts (owned by Cigna) was the first to announce that it wouldn't cover this authorized generic, but would instead choose Humalog -- which means ES which is now owned by Cigna will receive the rebates and profit associated with Humalog.

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Wait, insulin is still too expensive and this isn't enough...! Clearly. 100% agreed. No one denies that, including Lilly. But we're trying to move the needle forward here, People. Being mad about outrageous price hikes for more than a decade and now being dismissive when some movement is finally being made is unproductive. Let's take this as a sign of progress and keep pushing for better affordability and access. Said another way: Don't let perfection be the enemy of good.

Should we be thanking Lilly here? Opinions vary. In fact, that's the divisive nature of this whole announcement. While we see this as a good step forward by Lilly, it can also be seen as too little, awfully late. And let's be honest, the pharma giant isn't just being a good Samaritan here. They're responding to market and public pressures by trying to "soften their image" and be seen as a good guy.

In the name of moving the needle forward, we're glad they made this move no matter what the motivations were behind it. We choose to express our thanks to the passionate people who have been advocating on this front for years, from the grassroots #insulin4all advocates to organizations like ADA, JDRF, Diabetes Patient Advocacy Coalition (DPAC) and others who've been working to improve access and affordability. It's a team effort and many in our D-Community are a part of increasing the public pressure to effectuate change on this insulin pricing crisis.

Let's continue to focus on making things better, for real.