$35 insulin price cap: Will it affect you if you have Medicare? What about private insurance?

News from pharmaceutical company Eli Lilly of plans to cut prices of insulin look set to change the market in the US. With prices brought down to levels that are the most they can be paid for by new Medicare plans is ample evidence of what everyone already knew; companies have been taking Americans for a ride when it comes to the cost of medicine.

Prices brought down by one company are likely to force others to follow suit or be priced out of the market.

“Last year, we capped insulin prices for seniors on Medicare, but there was more work to do,” President Joe Biden said in a statement. “Today, Eli Lilly is heeding my call. Others should follow.”

The pharmaceutical sector is well known for its excessive prices that have put millions of Americans under financial strain. According to Forbes, the United States represents around 15 percent of diabetes patients globally, but over 50 percent of the revenue seen by pharmaceutical companies.

A 2020 Rand study found that the average price per vial of insulin in the US was more than $98 in 2018, compared with $12 in Canada and less than $8 in the UK.

How does the new insulin prices affect Medicare users?

The proposal included in the Build Back Better bill caps the amount people with diabetes spend on insulin at $35 a month if they receive healthcare through the government or a private insurance company. This means the new insulin prices will have no affect for Medicare as they are the same. Should prices increase again in future then this Medicare limit will once again come into force.

However, people under private insurance are not affected by the $35 cap and are still at the mercy of the companies. This amendment to include private cover was voted down by Republican senators. Before the cost adjustment comes into place in May patients will be paying between $175 and $300 for a vial of insulin, of which most need at least three a month.