Insulin prices have rising — increases that mean some people are spending as much on monthly diabetes-related expenses as their mortgage payment.
As a result, the companies that make insulin have been under fire from the public and politicians including US Senator Bernie Sanders.
Now, one of those insulin-makers, Danish pharmaceutical company Novo Nordisk, says it will limit all future drug list price increases from the company to single digit percentages. Novo Nordisk made the announcement on its Website on Nov. 30, but only drew attention to it on Monday.
Novo Nordisk also pledged to keep out of pocket costs low to consumers through patient assistance programs and cheaper forms of insulin, as well as help change up the complicated drug pricing system.
“While we can debate who pays what in different scenarios, it doesn’t change the fact that many patients simply can’t afford the medicine they need,” Novo Nordisk president Jacob Riis wrote on the Website.
Riis also pointed to the difference between the list price the company sets and the net price that drugmakers get after rebates and other interactions with middle men in the supply chain.
According to data from ZS Associates a sales and marketing firm that works in the healthcare industry, Novo Nordisk’s rebate rates were 47% in 2014, and 55% in 2015. Across the industry, ZS data shows that rebates paid out to PBMs and insurers have gone up from about $40 billion four years ago to $100-$130 billion by 2016. So while list prices continue to go up, net prices to the drugmakers have stayed mostly flat.
Here’s an example of how much the list prices prices have increased for Novo’s Novolog over the past 20 years. Since 2006, the list price of Novolog has increased 280%.
Novo Nordisk is now the second company in recent months to commit to single-digit yearly price increases.
In September, Allergan also pledged to put limits on the size and frequency of drug price hikes in a social contract, limiting it to only yearly single-digit per cent increases, and it won’t happen on drugs that are about to lose patent protection.
Allergan CEO Brent Saunders praised Novo Nordisk’s move on Monday.
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