GEOFF BENNETT: More than seven million Americans rely on insulin, and over the last two decades, prices for the lifesaving drug have skyrocketed.

With pressure mounting on pharmaceutical companies to address the high cost of diabetes care, drugmaker Eli Lilly announced today it's cutting the prices for its most popular insulin products by 70 percent and capping out-of-pocket costs at $35 a month.

We're joined now by Bram Sable-Smith.

He's a reporter with Kaiser Health News It's good to have you here.

And, Bram, how significant of an announcement is this?

I mean, given the way that drug pricing works in this country, a company's list price doesn't necessarily reflect how much insurers will cover and how much folks end up paying out of pocket.

BRAM SABLE-SMITH, Kaiser Health News: That's true.

And that's been the criticism of a lot of the approaches to addressing the high cost of insulin in the past.

So, you will remember, in the Inflation Reduction Act last year, Congress passed a $35 cap for some Medicare patients for insulin.

There was talk, there were proposals to pass a similar cap for all insured patients.

The criticisms with that -- those kinds of caps is that it doesn't address the list price.

So if you're uninsured or you're underinsured, you would still be exposed to the high list price of these products.

So, by reducing the list price of insulin, it's a really significant step.

And it gets at some of the criticisms that people have had in the past for addressing this issue.

GEOFF BENNETT: Will this announcement by Eli Lilly push other insulin makers to follow suit?

BRAM SABLE-SMITH: It's certainly possible.

I mean, you saw President Biden applauded the announcement.

Bernie Sanders has written letters to the CEOs of Sanofi and Novo Nordisk.

Those two companies, together with Eli Lilly, account for something like 90 percent of insulin that's used in the United States of America.

So, Bernie Sanders has written letters to their CEOs asking them to follow suit.

So there's certainly pressure.

GEOFF BENNETT: As you mentioned, this announcement by Eli Lilly puts the company in line with the provisions in the Inflation Reduction Act capping out-of-pocket costs for seniors who rely on insulin.

But let's talk about how we got here, because, in 1999, one vial of Humalog, which is a diabetes drug, cost $21 a vial.

In 2019, that cost was $332.

That's a 1000 percent increase.

How did that happen?

BRAM SABLE-SMITH: You know, one of the ways to think about it, I kind of describe it as a "Game of Thrones" that pharmaceutical companies are playing with insurers and these middlemen called pharmacy benefit managers.

And the gist of it is that you will have an insurance company that has millions of patients that they provide insurance for, and through these middlemen, they will go to the pharmaceutical company, and they will say, hey, we want to make your insulin the preferred insulin on our list, but, in return, we want a good deal on it.

So the manufacturers will provide these things called rebates to the middlemen, who will then pass some or all of it on to the insurer.

And it creates these incentives for high prices, so that everybody will get their cut along the way.

But what that doesn't take into account is the uninsured and underinsured patients.

So when you don't have insurance, or you have a high-deductible plan, something like that, you could be exposed to these high list prices, that really were never meant for patients.

GEOFF BENNETT: How big of a financial burden has this been for folks up until now?

I mean, there are millions of Americans who have been rationing their insulin.

BRAM SABLE-SMITH: Yes, that's right.

And a study came out last year that something like 17 percent of Americans who use insulin had rationed it.

A lot of that is because of financial constraints.

And there are plenty of stories.

I mean, I have written some.

There have been plenty other stories have been written by other reporters, other journalists, about people who've actually died from rationing their insulin because they didn't feel they were able to afford the insulin they needed to survive.

So, I mean, it's been a really big issue.

GEOFF BENNETT: So, what will you be watching for in the weeks and months to come?

BRAM SABLE-SMITH: Mm-hmm.

Well, I'm certainly interested to see if the other insulin manufacturers will also reduce the list prices of their insulin.

I'm interested to see if Congress will continue to take action itself.

President Biden, in the State of the Union this year, called for a more universal co-pay cap.

I'd be interested to see if Congress will do something along those lines.

There's also initiatives in states around the country that are worth keeping an eye on.

So, California, for example, has an initiative that they're going to manufacture their own insulin to bring it in at a lower price.

And continuing on that path could provide even more market pressure for other companies to reduce the list price of the insulin products.

GEOFF BENNETT: Bram Sable-Smith is a reporter with Kaiser Health News.

Thanks so much for your time and for your insights.

BRAM SABLE-SMITH: Thanks for having me.