By ED SILVERMAN @Pharmalot

MARCH 4, 2019

As drug makers come under increasing pressure to lower prices, Eli Lilly (LLY) is trying to thread a needle by introducing a new version of insulin at half the list price.

Specifically, the product is a so-called authorized generic version of the Humalog insulin, which means the medicine is identical to the brand-name treatment and will be made at the same plant, but carries a different label. Known as Lispro, the medication will sell for $137.35 a vial, while the list price of a five-pack of KwikPens will be $265.20.

The move reflects growing anger at the pharmaceutical industry, although insulin has been a particular focal point among patients and, subsequently, lawmakers. The average list price for insulin nearly tripled between 2002 and 2013, according to the American Diabetes Association. More than 30 million Americans have some form of diabetes.

Fifteen years ago, for instance, a patient with diabetes might have paid $175.57 for a 20-milliliter vial of the long-acting insulin Humulin R U-500, another Lilly treatment. Today, that medicine would cost $1,487. However, a recent study estimated the cost to produce a vial of human insulin is between $2.28 and $3.42, while the cost to produce a vial of most analog insulins is between $3.69 and $6.16.

In response, some families have protested outside offices of the big insulin makers — the others are Sanofi (SNY) and Novo Nordisk (NVO). Some brought ashes of their children who died after rationing their insulin. Late last month, the Senate Finance Committee launched an investigation and last fall, a bipartisan group of more than 290 lawmakers released a package of proposals to lower insulin costs.Related: ‘Everyone is at fault’: With insulin prices skyrocketing, there’s plenty of blame to go around

By selling an authorized generic, Lilly is making a Solomon-like move. Payers and employers can continue purchasing Humalog if they want to continue receiving large rebates that Lilly pays these companies in order to win placement on formularies, which are the lists of medicines that are reimbursed through insurance.

At the same time, the authorized generic will be more affordable to the uninsured or those with high-deductible insurance plans, whose copays are, typically, tied to list prices. In this way, Lilly hopes to defuse some of the anger over the cost of insulin. Moreover, Medicare beneficiaries should benefit since they are not able to use a discount program Lilly offers patients covered by private insurance.

“The significant rebates we pay on insulins do not directly benefit all patients. This needs to change,” Lilly chief executive David Ricks said in a statement. “There are numerous ideas, including the rebate reform proposal from the [Trump administration] For people with diabetes, a lower-priced insulin can serve as a bridge that addresses gaps in the system until a more sustainable model is achieved.”

Whether the move will appease patients, however, remains to be seen. The authorized generic was seen as a welcome move by one patient advocacy group, but also criticized as being insufficient.

“We are pleased to see that non-pharma funded patient advocacy to ensure list price of insulin goes down is working. While half-price is an improvement, it’s still unaffordable for many, considering most people need at least two vials each month,” Elizabeth Pfiester, who heads T1International, an advocacy group for people with type 1 diabetes, wrote us.

“The price of Humalog increased 585 percent between 2001 and 2015, so there’s no guarantee that ‘half-price’ won’t double again over the next few years. All insulin manufacturers can and should be offering truly affordable prices to every patient who needs insulin to survive.”Related: Powerful Senate committee launches bipartisan probe into insulin pricing

And Nicole Smith-Holt, an insulin affordability advocate whose son, Alec Smith, died in 2017 after rationing his insulin, had this to say: “I think it is a baby step in the right direction. They still have a ways to go before I will be satisfied. I think they are doing this to try to avoid legislation. I think they are trying to silence the advocates.

“It is still priced far too high, at the price they are suggesting a person would still be paying more than $6,000 a year just for the insulin, not to mention all the other expenses for supplies. Even at this 50 percent reduced price, the people in the U.S. are still paying 60 percent to 70 percent more than people everywhere else in the world. I believe the hard work of the strong advocates have gotten us this far and we will not stop until the product is actually affordable and accessible for all.”

This is not the first time, by that way, a large drug maker has taken such a step to appease critics. In the wake of the ruckus nearly three years ago over the high cost of the EpiPen allergy-relief device, Mylan (MYL) began selling an authorized generic version at a reduced price. And last fall, Gilead Sciences (GILD) took a similar step for two of its hepatitis C treatments.

Megan Thielking contributed reporting.