Settlement caps monthly insulin price at $35 for Minnesotans with diabetes

Minnesotans with diabetes will pay no more than $35 monthly for Eli Lilly’s brand-name insulin products, at least for the next five years, under a settlement announced Wednesday by state Attorney General Keith Ellison.

The state in 2018 was the first in the country to sue insulin manufacturers over price-gouging allegations — driven by stories such as the death of Alec Smith, the 26-year-old with Type 1 diabetes who had been rationing medication that he couldn’t afford. His mother, Nicole Smith-Holt, joined Ellison at the State Capitol to announce the deal, saying, “It’s going to save so many lives.”

“It’s been 20 years they have been taking advantage of Type 1 diabetics, Type 2 diabetics,” she said of the drug companies, “taking advantage of the fact that they have to have this product in order to live.”

Minnesota is still suing Novo Nordisk and Sanofi, two other manufacturers of synthetic insulin, but Ellison said he hopes to reach similar terms with them soon to make their versions affordable. New York had reached similar terms last year with all three manufacturers, which also announced they were slashing list prices for insulin at the start of 2024.

The settlement comes amid a continued surge in diabetes, a disease in which the body can’t produce insulin, or produces too little to regulate the body’s blood sugar levels. Minnesota’s adult diabetes rate surpassed 10% for the first time in 2022, according to federal survey data.

The chronic disease can cause heart, kidney and nerve problems, and costs Minnesota around $5 billion each year in medical expenses and lost productivity.

“This comes not a moment too soon,” said Ellison of the settlement, adding that “no one should have to choose between affording their lives and affording to live.”

Eli Lilly in a statement said the settlement “fully resolves one of the longest-running insulin pricing lawsuits and reinforces our commitment to ensuring that Minnesotans have affordable access to Lilly’s insulins. The agreement builds on our longstanding ... efforts to close gaps in the U.S. healthcare system and expand access to affordable insulin.”

Wednesday’s settlement will provide discount cards for uninsured Minnesotans and options for people paying more than $35 per month through their health plans for insulin. It also will arrange for 15 clinics across Minnesota to provide free Eli Lilly insulin supplies, and for a MNinsulin35.org website to provide information on options under the settlement.

Many Minnesota health plans have already capped monthly insulin prices at $25 per month, but only for fully insured plans on the individual market that cover a sliver of the state’s population. Minnesotans will continue with existing options if they are already paying less than $35 per month, according to the settlement.

List prices for insulin had tripled since 2002, and prices also increased dramatically for other commonplace medications in recent years, despite claims by drugmakers that discount cards and other programs actually made them more affordable.

Smith-Holt’s son died in summer 2017 after he aged out of his parents’ health insurance and couldn’t afford his own coverage as a restaurant manager. He rationed medication because he couldn’t afford a $1,300 monthly refill, and he died of diabetic ketoacidosis, or a critical shortage of insulin.

State legislation in Smith’s name in 2020 created a safety-net program, making free or low-cost insulin available to people with diabetes who needed it urgently.

A state health report last fall found that the program was particularly helpful for Minnesotans who had no insurance or Medicare coverage, but not for underinsured people whose health plans had high cost-sharing requirements and deductibles. A survey of Minnesota pharmacists still showed that 85% felt their customers were struggling to afford insulin, despite all the recent options.

Drugmakers sued in response to the legislation, and that case is pending.

Advocates said patients sometimes respond to certain insulins better than others, so it will be important for Minnesota to pursue settlements with other manufacturers. And while Lilly voluntarily capped monthly prices at $35 for all of its insulin products last year, the settlement provides a guarantee for mothers such as Lija Greenseid. She was paying $700 per month out of pocket for her daughter’s medication at one point despite having health insurance.

“We’ve seen our costs come down,” she said, “but something like this assures me that I don’t have to worry each year.”