U.S. Access & Affordability

Management Approach

Throughout our nearly 150-year history, Lilly has worked to address some of the most pressing health challenges facing humanity, including infections, diabetes, depression, cancer and obesity. Today, more than 55 million people are estimated to use Lilly medicines.

But we know that our commitment to patients and society goes beyond the medicines we make.

We are committed to equitable and affordable access to our medicines so that our breakthroughs can transform more people’s lives. This includes our approach to pricing in the U.S. described in this section.

We’re also committed to expanding our impact on society by addressing complex U.S and global health challenges, with a focus on people living in communities with limited resources. Learn more about these efforts in Global Access & Health.

Pricing in the U.S.

Pricing medicines to achieve the optimal balance between patient access and sustained investment in innovative treatments is complex. At Lilly, we know that pricing our medicines is one of the most important decisions we make as a company. We use a value-based approach to pricing, taking into account the following:

Customer perspective – The unmet needs that medicines can fulfill for patients and caregivers and how people can affordably access the treatment.

Company considerations – The costs of research, development, manufacturing, distribution and support services for customers; business trends and other economic factors; and the medicine’s potential market size and patent life.

Competitive landscape – The benefits of our medicine compared to alternative medicines and where our medicine is appropriate for treating conditions.

Contributing factors – Such as health system changes and policy guidelines.

Lilly also makes price adjustments over a product’s lifecycle that are based on the factors above as well as post-approval clinical data.

We are committed to educating stakeholders about the value of our medicines and ensuring transparency about our prices. List prices for many of our medicines, as well as average out-of-pocket costs and financial assistance information, are published online.

List Price vs. Net Price

A list price for each of our medicines is set using the considerations noted above.

We pay rebates and other discounts and fees to payers, pharmacy benefit managers (PBMs), the U.S. government and other supply chain entities such as wholesalers and distributors. After paying these rebates, discounts and channel costs, the final dollar amount that Lilly ultimately receives is called the net price.

These rebates and discounts have continued to grow over the years for Lilly’s U.S. portfolio while net prices for many of our medicines have continued to decrease.

Lilly U.S. Affordability Solutions

We’re a medicine company turning science into healing to make life better for as many people as possible. We work to improve access to our treatments and increase equity throughout the health care system. We actively advocate for and participate in the process of driving systemic positive changes.

We support the realignment of financial incentives for the entire pharmaceutical supply chain so that patients directly benefit from the net pricing we provide. We are also taking important steps within our own control to increase access to Lilly medicines today.

Lilly offers a variety of affordability solutions through patient support programs and copay assistance across the major products in our portfolio. For many of our migraine, immunology, diabetes and obesity medicines, we have copay assistance programs to bring eligible patients’ monthly out-of-pocket costs to as little as $25 or lower. For cancer, the Lilly Oncology Support Center assists eligible patients in identifying affordability options related to their Lilly treatment. The Lilly Diabetes Solution Center is a resource for patients to learn about our different insulin affordability solutions, which are outlined below.

Under the Inflation Reduction Act (IRA), more than 3 million Medicare beneficiaries who take insulin will pay $35 per month or less on their insulin. Lilly was a strong supporter of this provision as it aligns with the affordability solutions we’ve had in-place years before the IRA became law.

See related graphic for an overview of the recent actions Lilly has taken to make insulins more affordable in the U.S.

All of these initiatives have made a real impact, helping 100,000 people save $20 million each month. Importantly, despite rising insurance deductibles, the average monthly out-of-pocket cost for Lilly insulin has continued to drop for the past six years from $38.64 to $17.16 – a decrease of 56%.

Lilly has either reduced list prices for our insulins or held them steady over the past six years while net prices continue to decline.

^*Terms and conditions apply.

Information about all of our insulin affordability solutions is available on insulinaffordability.com and through the Lilly Diabetes Solution Center at (833) 808-1234. The Solution Center is a call center staffed with experts who can help guide individuals to the affordability solution that best matches their needs, including connecting people with diabetes to charitable organizations that provide free Lilly insulin. Additionally, we are a financial supporter of getinsulin.org, a tool launched in 2020 by the patient advocacy group, Beyond Type 1, that helps people easily find the most affordable insulin options in their area – regardless of brand or manufacturer. Both web- and app-based, getinsulin.org is a convenient one-stop shop for people who use insulin and is available in both English and Spanish.

Lilly is actively working with other stakeholders throughout the U.S. health care system, including Congress, to seek policy solutions to address systemic gaps in patient affordability. Some of these include:

Lower Out-of-Pocket Costs – We support basing patient out-of-pocket costs for medicines on the lower net price that health plans and pharmacy benefits managers (PBMs) pay after subtracting rebates and discounts they receive from manufacturers. Payer negotiated discounts are typically passed fully to patients for other health care services, but not for medicines. Lilly believes any rebate it pays should be passed through to people at the pharmacy counter to offset the cost of their medicines.

Delinking – We support basing PBM fees on the value of the services they provide rather than a medicine’s price. Fees, rebates and other payments in the health care system are often calculated as a percentage of list price. By delinking PBM fees from list price, the incentive for high prices would be removed and could lower costs for patients.

First-Dollar Coverage – We support exempting more health care items and services for chronic conditions – such as insulin – from patients’ deductibles. This would improve patients’ access to necessary treatment and provide consistent costs every month.

Insulin Out-of-Pocket Caps – We support expanding the monthly $35 copay cap on insulin in Medicare to the commercial market, a federal solution that would make permanent for all insulin users what Lilly has already done on its own.

Transparency – We support additional transparency in the system. We commend legislation like the Pharmacy Benefit Manager Transparency Act of 2023, which encourages fair and transparent practices that benefit local pharmacies and consumers.

We believe these necessary long-term reforms could provide lasting relief to patients struggling to access and afford their medicines regardless of manufacturer, moving the U.S. health care system from a series of patchwork solutions toward systemic change. In the meantime, Lilly intends to continue providing affordability solutions to people who need them.

When a patient seeks medical care, the health care system’s top goal should be to improve their health. Medical interventions, including medicines, should be evaluated based on how well the patient’s health may improve. This seems obvious, but it’s not how our current payment system works.

Under the existing fee-for-service model that is common in the U.S., payments are based on the number of treatments or services provided, not whether a patient sees improvements in their health. However, as health care costs and rates of chronic disease continue to rise, there has been increased urgency to deliver care that brings greater value to both the patient and the health care system.

We believe that innovative value-based arrangements (VBAs) are an important part of the solution. VBAs allow Lilly to stand behind the health outcomes we expect our medicines to deliver when the medicines are used appropriately. Such arrangements are designed to link the cost of our medicine more directly to patient outcomes.

A VBA includes predefined patient health outcomes and/or associated performance metrics based on the observed impact of a particular medicine on the person taking it. Such metrics can include favorable test results, improved medication adherence, reduced re-hospitalization rates or reduction in overall disease management costs. This approach can transform the health care system to one that is about delivering value versus one about the volume of services provided or medicines purchased.

Lilly has been committed to increasing the use of VBAs in the U.S. since 2014. In addition, we have alternative access contracts in other global markets, many of which are value-based. We use each VBA as an opportunity to learn more about the real-world data we need to gather to make these arrangements more effective.

In many cases, VBAs improve access to a medicine for eligible patients and many patients may also get more personalized care, given medicines in these arrangements are generally made available based on how well they work in specific subpopulations. For payers, VBAs can help them better maintain affordability in novel ways and pay for medicines that deliver outcomes. For companies like Lilly, these arrangements can increase access to their medicines and reinforce data from clinical studies with real-world evidence. And over the long term, the results from these arrangements may help inform and improve future research and development efforts.

We believe VBAs have the potential to improve patient outcomes while lowering costs for the entire health care system, but to be successful they require increased collaboration between payers, health systems, employers, patients and industry. At Lilly, we continue to advocate for legislative and regulatory changes that support this transition. We believe this is one of the most important long-term changes we can make as an industry.

Employers are spending more than ever to provide health benefits to their workers in the U.S. Yet many people, especially those with chronic illnesses, struggle with affordability and access to the care they need. If more employers reduce cost-sharing for high-value therapies – especially large employers – they could change the insurance market in ways that could improve health and productivity while constraining costs.

Like all employers, Lilly works every year to reduce the rising costs of health care for our organization. For more than a decade, we’ve offered exclusively high-deductible plans to our employees. But we take certain steps to make sure our high deductibles don’t lead our people to skip the care they need. We have implemented solutions in our own company consistent with the systemic changes for which we advocate.

We fund our employees’ health savings accounts all at once at the beginning of the year. It shouldn’t matter if someone gets sick around New Year’s Day or Thanksgiving Day – we believe they should have money to help cover their health care costs. We provide first-dollar coverage for preventive and chronic disease medications by exempting them from our health plan deductibles. This means Lilly employees, retirees and their families pay only 10% to 20% of these medicines’ prices instead of the full retail price.

For all medicines, Lilly’s health plan has lowered costs by passing through rebates to patients at the point of sale. Sharing these rebates helped approximately 9,650 of our health plan members save $475 on average in 2023 – or about $4.6 million collectively. We provide all insulins to our eligible employees, retirees and family members at zero cost. This helps our health plan members stay fully adherent to their therapy. Employees and their eligible family members with diabetes can also receive a free connected glucose meter and related supplies, along with real-time support from trained diabetes educators.

We believe corporate leaders across the U.S. can make longer-term decisions and trade-offs to more effectively manage health benefits. Working together, employers can advance good ideas and help provide a better way to make U.S. health care and health insurance work for all Americans.