By Sy Mukherjee
March 4, 2019

Happy Monday, readers. I hope you enjoyed your weekend.

Last week, some of Big Pharma’s most prominent CEOs faced a long-awaited Congressional grilling over drug prices. That conversation produced some surprising consensus on steps that may be taken to lower the crushing weight of drug costs borne by American consumers—alongside the usual finger-pointing to other players in the health care industry over who’s to blame.

But the slowly snowballing consensus that something has to be done to address this longstanding issue appears to have struck at least one drug giant. On Monday, Indianapolis-based Eli Lilly, a more than $130 billion market value company, announced that it would introduce a version of its best-selling type 1 diabetes insulin product, Humalog, at half of its current list price.

The company said a new “authorized generic” version of Humalog 100 will be sold at a 50% discount off of the current list price, or just under $140 per vial (an authorized generic is identical in every way to the original branded drug, other than the name and label).

“Patients, doctors and policymakers are demanding lower list prices for medicines and lower patient costs at the pharmacy counter. You might be surprised to hear that we agree—it’s time for change in our system and for consumer prices to come down,” said Eli Lilly CEO David Ricks in a statement announcing the cut.

That sounds nice. But how significant is the move in practicality given Lilly, and other insulin makers’, behavior over the past decades?

As some critics have noted since Lilly’s move, the insulin space has seen massive list price increases over the years. Humalog has been on the scene since the mid-90s; one of its major competitors, Novo Nordisk’s NovoLog, was quick to follow. But while Humalog’s list price was closer to $20 when first introduced, it ballooned to about $300, as did NovoLog’s. Lilly’s and Novo’s price increases for the insulin often occurred in lock step, or just about the opposite of what you’d expect in a competitive market for a legacy product that’s still the same thing it was 20 years ago.

Lilly will also continue to sell its branded version of Humalog (again, this is the exact same treatment as the newly-discounted authorized generic) at its original, higher list price, meaning the reduction’s main beneficiaries will be uninsured people who bear the full brunt of the price. The benefit for insured patients and those who buy the original branded product will be modest at most (and potentially non-existent).

Still, others noted that the voluntary move by Lilly is, at the very least, a step in the right direction. And it’s a recognition that plenty of patients feeling the squeeze of these high list prices are starting to come onto Big Pharma’s radar.

Read on for the day’s news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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