: Insulin costing $35 a month ‘should be the new standard in America,’ Eli Lilly CEO says. But could this happen?

The $35 price tag is the same monthly limit that Medicare beneficiaries now pay on a month’s supply of insulin, after rule changes from last year’s wide-ranging tax, climate and healthcare law, known as the Inflation Reduction Act.

But the question remains: will $35 become the new going rate on out-of-pocket insulin costs for the more than 37 million Americans with diabetes?

“With the change last year in the Medicare Part D benefit, the senior benefit, to $35, we think that should be the new standard in America,” David Ricks, Lilly’s chair and CEO, said Wednesday during an appearance on CNN.

Also Wednesday, President Biden tweeted: “We passed the Inflation Reduction Act to cap the cost of insulin at $35 a month for seniors on Medicare, but there was more work to do. I called on Congress and manufacturers to lower insulin prices for everyone, and Eli Lilly is taking action.”

Almost 2.6 million Americans use Lilly insulin, according to a company spokesperson. More than one-third of those recipients get it via Medicare Part D while almost 43% of Lilly insulin users access it through commercial insurance, third-party assistance or pay cash, the spokesperson said. The price cap will be available at 85% through local and national retail pharmacies, the spokesperson noted.

For people on Medicare who get their insulin delivered through a pump, the cost will be capped at $35 beginning in July.

But data on insulin costs and affordability suggests there may be a way to go before $35 is the consistent going rate, even with state-level price caps and insulin access programs from drugmakers.

In 2019, the average out-of-pocket cost for one insulin fill was $58, usually for a 30-day supply, researchers inside the U.S. Department of Health and Human Services said earlier this year.

People without insurance for at least a year were paying an average $123 per fill, according to the January report. If the cost-sharing caps were in effect during 2020, researchers projected 1.5 million Medicare beneficiaries could have saved around $500 annually.

“It’s entirely likely” that $35 caps on out-of-pocket costs can become a consistent price for all insulin users, said Cynthia Cox, vice president at KFF, a foundation focused on national health-care issues.

As Congress eyes ways to lower prescription costs, the chance of a widely prevalent $35 out-of-pocket cost “just depends on how much more political pressure there is.”

Another reason the $35 price tag is possible? At least three quarters of insulin users with coverage through a job or the Affordable Care Act already pay less than $35 out of pocket, KFF research shows.

But insulin users likely also have other medical costs competing for their money and out-of-pocket costs are just one part of a person’s healthcare costs, Cox said. “The $35 dollar threshold is somewhat arbitrary…It’s not necessarily the magic number that equates to affordability.”

Lilly’s announcement comes while inflation keeps squeezing consumers’ wallets.

It’s something many insulin users know all too well, according to one recent study. Reviewing data on medical expenditures from 2017 to 2018, Yale School of Medicine researchers found that 14% of insulin users were paying for it at “catastrophic” levels.

That meant roughly 1.2 million people were using at least 40% of their money left over after paying for food and housing on their insulin, according to the July article in Health Affairs.

“As a clinician, I am happy to see these price reductions. I do think that they will help some of my patients with diabetes who struggle to afford insulin,” said Dr. Kasia Lipska, an associate professor of medicine at the Yale School of Medicine, who was the study’s senior author.

“Reducing the price of insulin will directly help patients who pay for insulin entirely out of pocket, those who have high deductible plans, and those who pay substantial co-insurance,” Lipska told MarketWatch.

But the announcement is not a cure all, she said, noting “the price reductions do not apply to insulin prefilled pens and not to all types of insulin.”

Besides, Lipska added, there may still be some patients who cannot afford the lower prices — “particularly if they use a lot of insulin and if they have limited income available to pay for this.”

“We applaud Eli Lilly for taking the important step to limit cost-sharing for its insulin, and we encourage other insulin manufacturers to do the same,” Charles Henderson, the American Diabetes Association CEO, said in a statement.

Though there’s been “significant progress on the issue of insulin affordability, including Medicare’s new out-of-pocket cost cap on insulin, state copay caps, and patient assistance developments from insulin manufacturers, we know that our work is not done,” Henderson said.

Beyond the Medicare’s rules, there are other price-cap rules in effect. In the state-regulated health plans of 22 states and the District of Columbia, copayments are capped for insulin, devices and supplies, according to the American Diabetes Association.

The time spans and money limits vary, but caps can range from a $25 limit in Connecticut on a 30-day supply of insulin or other diabetes medication to a $225 cap on a 90-day supply in Oregon.

Sanofi SNY, +1.30% and Novo Nordisk NVO, +0.52%, two drug makers with insulin offerings, pointed to their own price-reduction programs.

“Sanofi believes that no one should struggle to pay for their insulin, regardless of their insurance status or income level, which is why we have a suite of innovative and patient-centric savings programs to help people reduce their prescription-medicine costs,” the company said in a statement. For example, everyone with commercial insurance coverage is eligible for Sanofi’s copay assistance programs that curb out of expenses for most participants at $15.

Novo Nordisk said approximately 63,000 people received free insulin from the company last year and nearly 1.5 million people used Novo Nordisk programs to defray costs. Around 90% of American patients with commercial or government health plan coverage paid $1.50 daily for the company’s insulin, it said.

“We appreciate the importance of affordability and access for patients, and recognize that not all patient situations are the same. Importantly, Novo Nordisk will continue to listen and assess to help us understand emerging patient needs and focus on sustainable solutions in an evolving healthcare system.”

Eli Lilly and Co. LLY, +0.28% shares are up more than 1% Wednesday but down more than 13% year to date. The Dow Jones Industrial Average DJIA, +1.05% is down more than 1% year to date, while the S&P 500 SPX, +0.76% is up more than 2%.