By Dr. Robert Popovian, Erin Delaney, and Dr. Michael Mandel

We may be on the verge of a titanic shift in how drug prices are set. It’s been led by a dramatic decline in insulin prices, but it’s spreading to other brand drugs as well. This new paradigm is the unintended but welcome result of legislative, regulatory, and market pressures exerted on the biopharmaceutical industry.

The big change: the three major insulin manufacturers decided to sell their medicines at a set low out-of-pocket price for all patients. The previous list prices offered for insulin were bloated by all manners of rebates, discounts, and fees necessary for the byzantine rebate contracting model promoted by the pharmacy benefit managers (PBM) and state Medicaid programs. The new list prices are stripped of all the extraneous baggage and now closely reflect the actual net payments received by manufacturers.


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