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(Reuters) -Novo Nordisk said on Tuesday it would cut U.S. list prices for several insulin products by up to 75% next year, joining rival Eli Lilly (NYSE:LLY) and Co as political pressure mounts to make these life-sustaining diabetes treatments more affordable.
The moves follow the passing of President Joe Biden’s Inflation Reduction Act last year that capped insulin prices for Medicare recipients at $35 per month, but does not include patients without insurance.
Around 8.4 million of the 37 million people in the United States with diabetes use insulin, according to the American Diabetes Association.
Biden said in a statement that he was pleased by Novo’s move and urged other manufacturers to follow suit.
The Danish drugmaker will reduce the list price of its NovoLog insulin by 75%, and for Novolin and Levemir by 65%. The company said the financial impact of the move was uncertain.
Novo Nordisk (NYSE:NVO) also said it would reduce the list price of unbranded insulin products to match lowered prices of respective branded insulin products.
Eli Lilly said earlier this month it would cut the list prices for its most commonly prescribed insulin products by 70% in the fourth quarter of this year.
“I think it is a relatively natural consequence of what we have seen their competitor Eli Lilly do. We know there has been political pressure on this issue in general, it is a focus area in the U.S., especially for uninsured patients,” Jyske Markets analyst Henrik Hallengreen Laustsen said.
Stacie Dusetzina, a drug pricing expert and associate professor at Vanderbilt University, said the move was not surprising given the stiff competition for insulin.
The price cuts will also allow Novo to get out of paying substantial rebates to the U.S. government Medicaid program beginning in 2024, which could have been levied under 2021’s American Rescue Plan Act if the company had kept prices high.
“They have little to lose by making this change,” Dusetzina said.
Eli Lilly, Sanofi (NASDAQ:SNY) and Novo, make up 90% of the U.S. market for insulin.
