We commit to continued transparency in the U.S. around our pricing decisions.
We recognize calls for continued transparency in our pricing practices. Our principles reflect a desire to help our stakeholders better understand our pricing decisions.
Our principles reflect both a desire to help our stakeholders better understand our pricing decisions and to advance a more informed discussion of issues related to the pricing of medicines. To continue this dialogue and provide greater insights about this topic, we will disclose annually our average aggregate U.S. list and net price changes from the prior calendar year. These data may help illustrate how pricing changes accrue to manufacturers versus others in the value chain, highlighting our discrete role in the broader U.S. healthcare environment and enabling a better-informed discussion on solutions to improve patient access and affordability.
While list prices often receive the most attention, they reflect only the initial prices set for our medicines and are not the prices typically paid by the insurers, employers or pharmacy benefit managers who purchase our medicines on behalf of patients in their respective health plans. We negotiate discounts and rebates with these payors, which are designed to offer the healthcare system lower prices in exchange for greater access and affordability for patients with insurance. List prices also fail to capture the substantial mandated discounts and rebates, sometimes required by law, provided to government programs, including those provided in Medicare Part D, Medicaid and the 340B drug-pricing programs.
The net price is what Sanofi receives after discounts, rebates and fees paid to health plans and other parts of the healthcare system.
While our efforts focus on securing affordable coverage of our medicines for patients, it is important to note that patient cost-sharing and coverage decisions are ultimately made by payors and employers, not manufacturers of the medicines.
Simply put, patients’ out-of-pocket costs depend on how the plan is structured and the extent of the negotiated discounts passed on to patients.
In 2019, 55% of our gross sales were given back to payors as rebates, including $5.5 billion in mandatory rebates to government payors and $8.4 billion in discretionary rebates.
Rebates are a pricing concession that Sanofi offers to insurance companies, often through their pharmacy benefit managers, to help ensure that our products are covered by insurance and thus available to and affordable for patients. Many government programs require additional discounts or rebates that are defined by statute.
The price of a medicine after taking these rebates and discounts into account is known as the “net price” and most accurately reflects the price that Sanofi receives for its products.
Given the impact of rebates on the cost of medicines to payors, it is important to consider how net prices have changed over time to assess a medicine’s true cost to the overall healthcare system.
Despite rhetoric about skyrocketing insulin prices, the net price of insulin has been falling for five consecutive years, making our insulins significantly less expensive for insurance companies.
Since 2012, the net price of Sanofi insulins has declined by 41%. Over the same period, the net price for commercial and Medicare Part D plans of our most-prescribed insulin has fallen 37%, while average out-of-pocket costs for patients with commercial insurance and Medicare have risen approximately 62%. For all the focus by health plans and others on the growth of list prices, today, the average net price is below 2006 levels.
Limited U.S. Price Increases
on our medicines over time
Clear Rationale for Pricing
at the time of launch of a new medicine