Eli Lilly and Company to Offer Generic Insulin at 50% Off Brand Name Humalog

Humalog rapid-acting insulin my introduction into the pharmaceutical industry

First things first, get this product on your formulary yesterday! It shouldn’t take six months for a P&T committee review. Now, the primary reason for this blog post.

My career in the pharmaceutical industry began in 2002 with Eli Lilly and Co. I started out as a sales representative in the diabetes care division before electronic prescribing. I don’t know why I added the part about electronic prescribing other than to reflect back on how fast time flies. Not too many employees speak highly of a company once they leave. I do, however, of Eli Lilly and Co. every chance I get.

Before going any further, I need to preempt any attempts to downplay what I’m about to write. Much like Eminem when he battle raps, I know what my competition is going to say before they utter a single word.

Eli Lilly is a great pharmaceutical company who puts patients first. I know, I know…it is a public drugmaker, with shareholders, and generates gargantuan margins from its product portfolio. Hear me out.

1) Back then, in 2002, and still today the sales culture was about putting the patient first always. Of course, the company has to keep shareholders happy but it didn’t do it at the expense of patients. I truly believe this and have more street smarts than most so no I’m not drinking the Kool-aid.

2) In a team meeting, my manager called me into a private room during a break. He handed me a folder and inside was a letter explaining my salary was going from $65,000/yr to $85,000/yr. I got light-headed and nearly passed out. It wasn’t so much about the money instead it was the recognition I appreciated most of all. There are two things of note. First, I had not asked for a raise. Second, I was less than one year into my tenure with Eli Lilly still they cut the check!

3) Less than a year later, I was promoted way ahead of schedule. I’m talking six or seven years ahead of schedule. They recognized my results and rewarded me for them. No red tape, business case, or performance review just you deserve it so here you go.

I write all of this to say I’m not surprised Eli Lilly and Co. announced plans on Monday to sell a half-price version of its popular insulin injection Humalog. True, it is fending off criticism about rising drug prices, especially insulin, yet like my pay raise it didn’t have to do this.

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“Don’t Miss” Webinar: How to Slash PBM Service Costs, up to 50%, Without Changing Vendors or Benefit Levels

How many businesses do you know want to cut their revenues in half? That’s why traditional pharmacy benefit managers don’t offer radical transparency and instead opt for hidden cash flow opportunities such as rebate masking. Want to learn more?

Here is what some participants have said about the webinar.

“Thank you Tyrone. Nice job, good information.” David Stoots, AVP

“Thank you! Awesome presentation.” Mallory Nelson, PharmD
“Thank you Tyrone for this informative meeting.” David Wachtel, VP

“…Great presentation! I had our two partners on the presentation as well. Very informative.” Nolan Waterfall, Agent/Benefits Specialist

A snapshot of what you will learn during this 30 minute webinar:

  • Hidden cash flows in the PBM Industry such as formulary steering, rebate masking and differential pricing 
  • How to calculate cost of pharmacy benefit manager services or CPBMS
  • Specialty pharmacy cost-containment strategies
  • The financial impact of actual acquisition cost (AAC) vs. maximum allowable cost (MAC)
  • Why mail-order and preferred pharmacy networks may not be the great deal you were sold
Tyrone D. Squires, MBA  
3960 Howard Hughes Pkwy., Suite 500  
Las Vegas, NV 89169  
866-499-1940 Ext. 201

P.S.  Yes, it’s recorded. I know you’re busy … so register now and we’ll send you the link to the session recording as soon as it’s ready.

Reference Pricing: “Gross” Invoice Cost for Popular Generic and Brand Prescription Drugs (Volume 260)

This document is updated weekly, but why is it important? Healthcare marketers are aggressively pursuing new revenue streams to augment lower reimbursements provided under PPACA. Prescription drugs, particularly specialty, are key drivers in the growth strategies of PBMs, TPAs, and MCOs pursuant to health care reform.

The costs shared here are what the pharmacy actually pays; not AWP, MAC or WAC. The bottom line; payers must have access to actual acquisition costs or AAC. Apply this knowledge to hold PBMs accountable and lower plan expenditures for stakeholders.

How to Determine if Your Company [or Client] is Overpaying

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement. It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our acquisition costs then determine if a problem exists. When there is more than a 5% price differential for brand drugs or 25% (paid versus actual cost) for generic drugs we consider this a potential problem thus further investigation is warranted.

Multiple price differential discoveries mean that your organization or client is likely overpaying. REPEAT these steps once per month.

— Tip —

Always include a semi-annual market check in your PBM contract language. Market checks provide each payer the ability, during the contract, to determine if better pricing is available in the marketplace compared to what the client is currently receiving.

When better pricing is discovered the contract language should stipulate the client be indemnified. Do not allow the PBM to limit the market check language to a similar size client, benefit design and/or drug utilization. In this case, the market check language is effectually meaningless.