Eli Lilly's move to cap out-of-pocket costs on insulin at $35 a month is cutting into potential profits for pharmaceutical benefit managers, the Wall Street Journal reported March 8.
When the list cost of drugs is reduced, PBMs have less value to capture in rebates. If PBMs accept Eli Lilly's lowered prices, Novo Nordisk and Sanofi, the other two major insulin manufacturers, could do the same, according to the WSJ.
Though PBMs could lose out on profits if drugmakers reduce insulin prices, one industry insider said the drug industry may make up these profits on other drug prices.
Eli Lilly's move comes as PBMs are under scrutiny from the federal government. The House Committee on Oversight and Accountability opened an investigation March 1 focused on CVS Caremark, OptumRx and Express Scripts.
Lance Wilkes, an analyst at Sanford Bernstein, told the WSJ PBMs are likely to be ongoing targets for regulatory and legislative action.
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