Lilly’s Zepbound price cut could help customers and boost profits

Eli Lilly drew praise Tuesday for launching discounted versions of its blockbuster obesity drug Zepbound. Previously, the treatment was sold only in injectable pens for a list price of $1,060 per month, but now Lilly will also sell initial doses in vials that can cost up to $549 per month, “expanding supply and access,” the company said.

In Lilly’s press releaseone patient group called it “an innovative solution that brings us closer to achieving fair healthcare.” And even President Biden agreed with Xin which he credits his administration’s work in pressuring drug makers to lower prices.

But a deeper look at the announcement suggests that the new offering may not expand access as much as the company indicates.

Doctors noted that the price of the vials will still be out of reach for many patients, and that only the starting doses will be offered in the vials, and not the higher doses that many patients need to achieve significant weight loss. Additionally, not all patients will be able to pick up vials; they will only be available to patients who pay for their own medications without insurance and who order exclusively through Lilly’s online portal.

On the same day Lilly launched the vials, it also quietly increased costs for other patients. Previously, people who have commercial insurance but don’t have Zepbound coverage could apply for a savings bond to get the pens, in any dose, for $550 a month, but on Tuesday Lilly increased that price to $650 a month — a move that was not mentioned in the press release.

Lilly also appeared to have made a similar change to the savings bond for its sister diabetes drug Mounjaro, based on changes to its web page.

Experts say that while the price of the new bottles is a good move, Lilly’s actions together signal that its primary interest is growing its market share and reaching patients it previously couldn’t. In this case, the company is specifically aiming to attract patients on Medicare, who must pay for Zepbound themselves, since Medicare does not cover weight loss treatments and does not allow beneficiaries to use drug coupons.

“When drug companies make these kinds of announcements, you should be skeptical that they are doing so in the best interest of patients and prescribers,” said Benjamin Rome, an assistant professor of medicine at Harvard University who studies drug pricing. Like all other for-profit companies, “they’re doing it in their own best interest, to maximize their revenue and profits, and that’s what they’re incentivized to do.”

Lilly did not immediately respond to a request for comment. On Tuesday, the company said patients who have already had a savings bond can continue to access the drugs for $550 per month for the rest of this year, but new patients will have to pay $650 per month.

The company said this will help maintain the sustainability of another Lilly savings program, which allows people with Zepbound commercial coverage to get the drug for $25 a month.

Savings voucher changes

Commercial health insurance companies have been reluctant to cover Zepbound due to concerns that its high price, combined with the large number of people eligible for the treatment, would create too much financial pressure. That is why Lilly has offered a savings voucher to the many patients with a subscription that does not include Zepbound.

But when Lilly on Tuesday increased the price of the Zepbound pens offered through the coupon, the change was not announced along with news of the bottles. Instead, it changed the fine print on the web pages for the coupons.

Eagle-eyed patients mentioned the new price online, and Senate Health Committee Chairman Bernie Sanders mentioned it in a statement on Tuesday: “The good news is that Eli Lilly has lowered the list price for the starting dose of Zepbound… The bad news is that Eli Lilly has increased the cost Americans paid for Zepbound under its patient assistance program from $550 to $650.”

Christopher Scannell, a health care researcher at the USC Schaeffer Center, said: “It would have been more above board and in good faith if they had announced both [the vial news and coupon change] at the same time. I think it is important that the general public and the patients specifically taking these medications have full transparency about the cost of the medications.

Bottles are still out of reach for many

Lilly’s decision to price the new bottles lower than the pens is “a step in the right direction,” Scannell said. But he noted that the price tag of about $550 per month for vials can still be a major burden for patients.

That’s equal to an average monthly amount for a used carand may be out of reach for some patients, especially the Medicare population targeted by the vials, as many beneficiaries are retired and do not have a stream of disposable income. (For Lilly, the lower price of the bottles likely won’t have a major financial impact on the company, as it appears to be in line with the net price of the pens, which is the actual revenue Lilly gets from the pens after discounts. according to Evercore analyst Umer Raffat.)

It’s also not clear how many patients will actually remain on the vials, which only go up to a 5 mg dose. Lilly claims that patients can still lose a significant amount of weight at that dose, but Reshma Ramachandran, an assistant professor of medicine at Yale University, said that in her practice, most patients on Zepbound move on to the higher doses that now only come in the form of medications are offered. the pens.

If patients need to move up to those higher doses, they will either have to use the coupons if they have commercial insurance or pay the full list price if they have Medicare insurance.

Rome said Lilly’s actions suggest that “they are not doing this as some kind of good faith effort to lower the price of their product. They are doing this to expand their market share to a group of patients who want access to the drug, are willing to pay $500 a month and have no insurance coverage.”

Access to bottles only via LillyDirect

Lilly only offers the bottles through its direct-to-consumer platform, LillyDirect. Patients can get a prescription on the label from any doctor, but they must place an order on the portal, and the order will be fulfilled by a pharmacy that Lilly partners with, such as Truepill or Amazon Pharmacy.

Ramachandran said it is in Lilly’s best interest to bring more patients to its platform, which will also expose them to resources for other Lilly medicines, such as treatments for migraines and diabetes. This approach also allows Lilly to gather more information about patients, which can help the company with targeted marketing, she says. “It’s a great marketing strategy.”

Rome argued that if Lilly’s primary concern was access, it could have made the vials accessible through many channels, not just its own platform. For example, Lilly could have offered the cheaper bottles to commercial payers so that plans could expand Zepbound’s coverage to their beneficiaries.

“They could have lowered the price of pens. They could have made the bottles available to everyone, including insured patients,” Rome said. “There are a number of steps they could have taken that would have indicated they really want to reduce costs.”