On Thursday, Eli Lilly (NYSE:LLY) saw a drop in shares as Optum Rx, a part of UnitedHealth (NYSE:UNH), announced plans to elevate eight insulin products from Eli Lilly, Novo Nordisk (NYSE:NVO), and Sanofi (NASDAQ:SNY) to tier one status on formularies starting January 1. Alongside this move, a commitment was made to cap out-of-pocket costs for these insulin products at $35 or less from the same date, potentially reshaping the market dynamics for these pharmaceutical companies.
In response to the news, LLY shares experienced a 3.7% decline, while NVO stock dipped by 1.7%.
Dr. Patrick Conway, the CEO of Optum Rx, expressed concern about the high prices of insulin and other vital medications, noting their impact on patients who may limit or skip doses due to cost constraints. The shift in the formulary, as explained by Conway, aims to lower costs and enhance access to life-saving medication. The ultimate goal is to make essential medicines more affordable.
As of now, more than 70% of Optum Rx users pay less than $35 monthly for insulin. Following the recent actions taken by Optum Rx, it is anticipated that 98% of all Optum Rx consumers will gain access to insulin at a cost of $35 or less per month.