The discovery of insulin a century ago revolutionized diabetes care, transforming a death sentence into a manageable condition. Since then, advancements in insulin formulations and delivery methods have continued to improve the lives of millions living with diabetes. However, a stark reality overshadows this progress: the price of insulin in the United States has surged dramatically, nearly tripling in the last decade. This exorbitant cost has erected a formidable barrier, preventing many from accessing this essential medication. On the centennial of insulin’s groundbreaking discovery, it is tragically ironic that this life-sustaining treatment remains financially unattainable for a significant portion of the diabetes community, estimated to be as high as one-third of those in need. The critical challenge we face today is ensuring that insulin is accessible and affordable for every individual with diabetes who requires it to survive and thrive. This article delves into the multifaceted reasons behind the high cost of insulin and proposes clinical and policy interventions aimed at enhancing insulin access and affordability for all.

The Century of Insulin: From Discovery to Modern Therapies

One hundred years ago, in August 1921, marked a pivotal moment in medical history. Frederick G. Banting and Charles H. Best, working diligently in the laboratory of John J. R. Macleod, successfully extracted a substance from a canine pancreas that effectively lowered blood glucose levels in a dog that had its pancreas removed. This groundbreaking achievement quickly translated into human application. In January 1922, Leonard Thompson, a 14-year-old boy battling type 1 diabetes, received the first clinical dose of insulin. The results were remarkable, as his condition dramatically improved following injections of the purified glucose-lowering component, refined from the extract by James B. Collip.1,2 Reflecting on the profound implications of their discovery, Banting famously declared, “Insulin does not belong to me, it belongs to the world.” True to this sentiment, in January 1923, Banting, Best, and Collip were granted an American patent for insulin and its production method. They selflessly sold these patent rights to the University of Toronto for a mere $1 each.3,4 Their unwavering objective was to ensure that this life-saving medicine remained accessible and affordable for everyone with diabetes.4 By the close of 1923, collaborative efforts from other research institutions and the burgeoning pharmaceutical industry paved the way for large-scale commercial insulin production and widespread distribution.5

Alt text: Pioneers of Insulin: Frederick Banting, Charles Best, and James Collip stand together, credited with the groundbreaking discovery of insulin.

The century that followed has been characterized by continuous innovation and evolution in insulin therapy.5–7 Initial efforts focused on isolating, purifying, and concentrating insulin from animal pancreatic extracts. From the 1920s through the 1970s, formulations with extended durations of action were developed, improving treatment regimens. The advent of genetic engineering in the 1980s ushered in the era of human insulin, synthesized in laboratories. The 1990s saw the introduction of rapid-acting and long-acting insulin analogs, designed to mimic the body’s natural insulin release more closely. In the 2000s, inhaled insulin offered a needle-free alternative, although it faced market challenges. The 2010s brought forth ultra-rapid acting and ultra-long acting insulin analogs, as well as biosimilar versions of rapid-acting and long-acting insulins, aiming to increase competition and potentially lower costs.5–7 Ongoing research and development efforts are dedicated to further refining insulin pharmacokinetics, simplifying treatment administration, and mitigating undesirable side effects. These advancements include the development of once-weekly insulins, hepato-preferential insulins targeting the liver, oral insulin formulations, and glucose-responsive “smart” insulins that activate only when blood glucose levels are elevated.8

Parallel advancements in insulin delivery and blood glucose monitoring technologies have further enhanced the effectiveness and safety of insulin therapy.5-[7](#R7] The evolution from vials and glass syringes to user-friendly insulin pens and pumps, and from traditional self-monitoring of blood glucose (SMBG) using lancets and test strips to sophisticated continuous glucose monitoring (CGM) systems, including real-time CGM and flash glucose monitoring, has transformed diabetes management. A landmark achievement was the FDA’s approval in September 2016 of the first artificial pancreas systems in the United States. These systems automate insulin delivery by continuously adjusting basal insulin infusion rates and/or administering automated bolus corrections based on real-time CGM readings, striving to replicate physiological insulin release more accurately.5,9

The Soaring Cost of Insulin: A Financial Burden for People with Diabetes

The global insulin market is a significant sector within the pharmaceutical industry, valued at approximately $21 billion in 2012.10 This market is overwhelmingly dominated by three multinational pharmaceutical giants: Eli Lilly, Novo Nordisk, and Sanofi. Collectively, these companies control an astounding 99% of the market value and 96% of the market volume.11 A major factor contributing to escalating insulin costs is the increasing preference for more expensive insulin analogs over less costly human and animal insulins. This shift has driven up insulin prices and overall spending, significantly impacting the affordability of insulin for both healthcare systems and individuals worldwide.11–14 Data from the Addressing the Challenges and Constraints of Insulin Sources and Supply (ACCISS) study, encompassing 26 countries, revealed a wide disparity in government procurement prices for human insulins. A 10-ml, 100-IU/ml vial of human insulin ranged from a low of $1.00 to a high of $18.10, with a median price of $4.30 (in 1996 US dollars).12,14 Interestingly, the study found that the price of a 10-ml vial of human insulin varied across country income levels, with low-income and lower-middle-income countries paradoxically facing the highest median prices. Specifically, prices ranged from $2.50 to $11.50 (median $6.90) in low-income countries and $1.00 to $12.50 (median $4.70) in lower-middle-income countries. In contrast, high-income countries saw prices between $3.20 and $18.10 (median $4.00), and upper-middle-income countries had a range of $1.50 to $7.10 (median $3.10).12,14

Alt text: Pie chart illustrating the global insulin market dominance, with Eli Lilly, Novo Nordisk, and Sanofi controlling the vast majority of market share.

While the availability and affordability of insulin are demonstrably worse in low- and middle-income countries compared to high-income nations, affordability remains a significant concern even in wealthy countries like the United States.11–13,15,16 The Prospective Urban Rural Epidemiology (PURE) study, a large-scale prospective cohort study conducted across 22 countries, provided valuable global insights into the availability and affordability of essential diabetes medications.15 The PURE study reported that insulin was available in only 48% of pharmacies overall. Availability varied greatly by income level: 94% in high-income countries, 40% in upper-middle-income countries, 29% in lower-middle-income countries, a mere 10% in low-income countries excluding India, and a higher 76% in India.15 Alarmingly, even when available, insulin was often prohibitively expensive. Globally, an estimated 37% of households with individuals with diabetes reported being unable to afford insulin. This figure ranged from a low of 3% in high-income countries to a staggering 47% in upper-middle-income countries, 35% in lower-middle-income countries, 63% in low-income countries excluding India, and 51% in India.15

In the United States, the financial burden of insulin is particularly acute. Expenditures for insulin and non-insulin antihyperglycemic medications for adults with diabetes aged 18 years and older surged from $10 billion to $22 billion between 2002 and 2012. This dramatic increase was primarily fueled by insulin expenditures, which skyrocketed from $2.6 billion in 2002 to $15.4 billion in 2012. The primary drivers behind this insulin expenditure surge were the shift from less expensive animal and human insulins to more costly insulin analogs, coupled with across-the-board price increases for all types of available insulins.17,18 While factors like an increase in the number of people treated with insulin and higher per-person insulin doses due to rising obesity rates and insulin resistance also contributed, their impact was less significant.17 In contrast, expenditures for non-insulin antihyperglycemic medications remained relatively stable in the United States during the same period, hovering around $7 billion per year.17 Notably, over the same timeframe, total and per capita expenditures for antihypertensive and lipid-lowering medications actually decreased, largely due to the introduction and widespread availability of generic versions of commonly prescribed drugs in those classes.17

Analysis of data from the Medical Expenditure Panel Survey revealed that the mean price of insulin nearly tripled between 2002 and 2013.19 Another analysis using Health Care Cost Institute healthcare claims data found that the mean price of an insulin prescription nearly doubled between 2012 and 2016 alone.20 A comparative study across 33 high-income nations revealed that the United States has the highest manufacturer prices for insulin by a significant margin. In 2018, United States manufacturer prices for insulin were 3.9 times higher than those in Chile and an astonishing 27.7 times higher than in Turkey, averaging 8.1 times higher than in all 32 non-United States countries combined.21 In the United States in 2018, total expenditures for prescription drugs reached a staggering $476.2 billion. Insulin glargine ($9.34 billion), a long-acting insulin analog, emerged as the second-highest drug by total expenditure. Furthermore, six additional diabetes medications were among the top 15 drugs by expenditure, including the short-acting insulin analogs insulin aspart ($5.94 billion) and insulin lispro ($5.72 billion).22 These high out-of-pocket insulin costs are not merely a financial concern; they directly impact patient health by being strongly associated with poorer adherence to prescribed treatment regimens.18,23,24

The Detrimental Impact of Insulin Costs and Cost-Sharing on Patient Use

Affordable prescription medications are fundamental to effective diabetes management. Regrettably, the high cost of insulin forces a significant percentage of Americans with diabetes to make difficult choices. Approximately 25-30% of Americans with diabetes report engaging in insulin rationing or skipping doses altogether due to cost concerns.25–27 Healthcare policies designed to control medication costs, such as deductibles, coinsurance, copayments, and formulary restrictions, can inadvertently create barriers to appropriate medication use. An analysis examining the relationship between cost-sharing features in prescription drug plans and medication utilization demonstrated a clear negative correlation: increased cost-sharing leads to lower rates of drug treatment initiation, reduced adherence among existing users, and higher rates of therapy discontinuation.28 For every 10% increase in cost-sharing, prescription drug spending decreases by 2% to 6%, with the specific impact varying based on the drug’s therapeutic class and the condition being treated. For instance, doubling copayments has been linked to a substantial 25% reduction in overall antidiabetic medication use.29 While increased cost-sharing tends to disproportionately reduce the use of “nonessential” drugs with over-the-counter alternatives (e.g., nonsteroidal anti-inflammatory drugs and antihistamines), it also negatively affects the use of “essential” medications like antidiabetic and antidepressant drugs.29 Paradoxically, higher cost-sharing is associated with increased utilization of other medical services, including emergency department visits, for patients with diabetes, indicating a potential shift towards more costly reactive care.28

The adverse effects of medication cost-sharing are particularly pronounced among low-income individuals. A recent study compared medication use between Medicare Part D beneficiaries eligible for the Part D low-income subsidy and those with incomes just above the eligibility threshold. The latter group, despite having only marginally higher incomes, faced significantly higher out-of-pocket medication expenses. The study found that not receiving prescription drug subsidies was associated with a 16% higher likelihood of incurring high out-of-pocket costs and a 19% reduction in prescription drug claims.30 Further research among patients with multiple chronic conditions has consistently shown that increases in average beneficiary cost-sharing are linked to substantial decreases in drug spending. However, these reductions in medication expenditures are often offset by increases in other healthcare spending, such as emergency department visits and hospitalizations.31 Critically, increased out-of-pocket medication costs can lead to detrimental health outcomes, especially for vulnerable Medicare patients with limited financial resources.31

Pathways to Affordable Insulin: Solutions to Lower Insulin Prices

Making insulin more affordable for people with diabetes is a multifaceted challenge requiring a combination of strategies. Key approaches include promoting generic and biosimilar competition, addressing the issue of market exclusivity for brand-name drugs, and eliminating anticompetitive practices that hinder the entry of lower-cost alternatives. Enhancing transparency in drug pricing and empowering the federal government to negotiate drug prices, particularly within the Medicare Part D program, are also crucial steps.

Unleashing the Power of Generic Medications

Generic medications, containing the same active ingredients as their brand-name counterparts, offer identical therapeutic effects at significantly lower prices. The utilization of generic drugs in the United States has grown dramatically over time. In 2005, generics constituted approximately 50% of dispensed drugs, while brand-name drugs accounted for 40%.32 By 2019, generics had surged to over 86% of dispensed prescriptions, with brand-name drugs representing only 10%.32 Generic drugs deliver substantial cost savings to the United States healthcare system, although the direct savings experienced by consumers can vary depending on their insurance coverage. Despite representing roughly 90% of prescription drugs dispensed, generics account for only about 30% of total United States pharmaceutical expenditures, highlighting their cost-effectiveness.33

The United States insulin market is dominated by the “big three” manufacturers: Eli Lilly, Novo Nordisk, and Sanofi. MannKind also markets inhaled insulin.34 Generic competition is a vital mechanism for increasing access to medications and controlling prescription drug costs. When even a single generic competitor enters the market, the average manufacturer price typically falls by approximately 39% compared to the brand-name drug’s price before generic entry. With two competitors, the average price reduction increases to 54%, and with four or more competitors, generic drugs can cost as much as 79% less than the original brand-name drug.35 Ensuring the timely availability of generic drugs is therefore a critical strategy for reducing prescription drug prices overall.33 Furthermore, strategies to mitigate drug supply disruptions and shortages and ensure long-term drug quality and security are essential. These strategies include providing economic and policy incentives to encourage the establishment or restoration of drug manufacturing capabilities in the United States and overseas, recognizing and rewarding high-quality manufacturing practices to enhance drug production reliability, and strengthening government oversight of drug manufacturers and their international facilities.36,37

Reforming the Patent System and Market Exclusivity

Patents, a form of intellectual property protection, grant patent holders exclusive rights for 20 years from the initial patent filing date. Market exclusivity, a separate form of marketing protection granted by the FDA upon drug approval, can further delay the approval of generic or follow-on drug products. While patents and exclusivities are intended to incentivize innovation, they can also inadvertently stifle competition. Unfortunately, pharmaceutical manufacturers have sometimes misused patents and exclusivities, originally designed to foster innovative drug development, to extend monopolies and impede the entry of lower-cost generics and biosimilars into the market.

Common tactics employed by pharmaceutical manufacturers to extend patent protection include filing multiple patents on a single drug, making minor, clinically insignificant modifications to existing drugs to secure new patents, and engaging in “pay-for-delay” or reverse patent settlement agreements. In these agreements, a brand-name manufacturer compensates a generic manufacturer to delay market entry even after the original patent has expired.38 Between 2005 and 2015, a concerning 78% of drugs receiving new patents were already on the market.39 Moreover, over 70% of the 100 best-selling drugs have had their patent protection extended at least once, and 50% have experienced patent protection extensions more than once.39 Another anticompetitive practice involves exploiting the 180-day exclusivity period granted to the first manufacturer to file a generic drug application. In some cases, these “first filers” intentionally delay seeking final approval for their generic drugs, effectively blocking subsequent generics from entering the market and maintaining the brand-name drug’s monopoly.40

Furthermore, when only a limited number of manufacturers produce a particular drug, they can leverage their market dominance to minimize competition and artificially inflate prices. One such strategy is “shadow pricing,” where prices of competitor products increase in parallel around the same time, suggesting a lack of genuine price competition.41

Biosimilar Insulins: A Path to Lower-Cost Alternatives

Similar to generic medications, the introduction of biosimilar insulins has been slow and faced significant hurdles. Biosimilars are developed from biological sources rather than through chemical synthesis, and therefore, are not considered perfectly interchangeable with the original reference product in the same way that generics are. While biosimilars may have only minor variations in clinically inactive components and demonstrate no clinically meaningful differences in purity, potency, or safety compared to the reference product, they are not legally classified as generic medications. The Affordable Care Act included provisions to encourage biosimilar market competition but granted biological products a lengthy 12-year market exclusivity period, during which no biosimilars can enter the market. After this exclusivity period, biosimilar manufacturers can seek FDA approval through an abbreviated licensure pathway.

However, manufacturers of biological products have employed similar strategies to those used for generic drugs, exploiting the patent system and market exclusivity to extend the period of protection from competition for their reference biological products, allowing them to maintain high prices. For example, although the primary patent for Lantus (insulin glargine) expired in 2015, over 70 additional patent applications were subsequently filed. If all these applications were granted, the manufacturer of Lantus would have gained an additional 37 years of patent protection.42 Evidence of shadow pricing has also emerged in the biosimilar insulin market. Between 2009 and 2015, the prices of the two long-acting insulin analogs, Lantus and Levemir, increased in near lockstep on 13 separate occasions. Similarly, the prices of the fast-acting insulin analogs Humalog and Novolog exhibited parallel price increases 17 times over a 10-year period.

Basaglar was the first FDA-approved “follow-on” biosimilar insulin glargine. While similar to Lantus, it was not designated as interchangeable with Lantus.5,34 Likewise, Admelog was a “follow-on” biosimilar insulin lispro, similar to Humalog but not interchangeable.5,34 A significant milestone was reached on July 28, 2021, when the FDA approved the first interchangeable biosimilar insulin product, Semglee (insulin glargine U-100).43 As an officially interchangeable biosimilar, Semglee can be substituted for Lantus at the pharmacy level without requiring a new prescription from the prescriber, streamlining access for patients. The wholesaler acquisition cost for a 3-mL U-100 prefilled, disposable pen of Lantus is $85.10, while Semglee is significantly less expensive at $29.60.44 The approval of Semglee offers patients a more affordable insulin option without necessitating prescriber intervention for brand substitution.

Addressing Structural Factors in Insulin Pricing

Structural elements within the pharmaceutical market also contribute to elevated insulin costs. These include the limited ability of the federal government to directly negotiate drug prices and a lack of transparency in negotiations between pharmaceutical manufacturers and pharmacy benefit managers (PBMs).

In 2011, the federal government, through programs like Medicaid, the Department of Defense (DOD), and Medicare Part D, covered prescription drug costs for 114.4 million beneficiaries. Each program reimburses retail pharmacies for outpatient prescriptions filled by their beneficiaries. A 2014 study by the United States Government Accountability Office (GAO) compared prescription drug prices paid across these federal programs.45 The study revealed that post-purchase price adjustments from drug manufacturers, including refunds, rebates, and price concessions, resulted in significant discounts from the initial gross price. These discounts ranged from nearly 53% for Medicaid to 31% for DOD and a much lower 15% for Medicare Part D.45 Overall, Medicaid consistently paid the lowest prices for both generic and brand-name drugs. Despite being mandated to cover essentially all FDA-approved drugs, Medicaid leverages a “best price” requirement to control costs.46 The basic Medicaid rebate is calculated as either a standard percentage of the medication’s average net price or the average net price minus the “best price” the manufacturer offers to another payer, whichever is greater. If a manufacturer’s rebate agreement with a non-Medicaid PBM or health plan results in a net price lower than what Medicaid would receive using the standard percentage rebate calculation, the manufacturer must apply that lower rebate amount to all Medicaid enrollees. Furthermore, if a medication’s average net price increases faster than the rate of inflation, the manufacturer is required to pay an additional rebate to Medicaid.18 In contrast to Medicaid, the DOD paid 50% more for generic drugs and 34% more for brand-name drugs, and Medicare Part D paid 4% more for generic drugs and a staggering 69% more for brand-name drugs.45

The Medicare Part D Drug Benefit Design

A critical factor influencing insulin prices within Medicare Part D is the legislative prohibition against the federal government directly negotiating or setting drug prices for the program. Instead, Medicare Part D relies on competition among private plans to manage formularies and negotiate with manufacturers, aiming to enhance drug choice and lower prices through market mechanisms.47

A 2019 GAO study further investigated the role of PBMs in Medicare Part D drug costs.48 PBMs provided drug benefit management services for 74% of Medicare Part D plan sponsors in 2016. PBMs primarily generate revenue through volume-based fees for processed claims, per-member per-month fees, and rebates negotiated with manufacturers for Part D drugs. While rebates are intended to offset drug costs or reduce premiums, the lack of transparency surrounding their use is a concern. Generally, PBMs retain a small fraction of the rebates (less than 1%), passing the majority on to plan sponsors. However, because Medicare Part D beneficiaries typically pay coinsurance based on the drug’s list price, the financial burden they bear does not reflect rebates or the actual net drug cost.

Medicare Part D plans utilize formularies, which are lists of covered medications, categorized into tiers with varying out-of-pocket costs for beneficiaries. Typically, these tiers include: 1) preferred generic tier with low or even zero copays; 2) non-preferred generic tier with slightly higher copays; 3) preferred brand-name tier with higher copays; and 4) non-preferred brand-name tier with the highest copays. The high cost of insulin for Medicare Part D beneficiaries is partly attributable to its classification as a therapeutic biological product and brand-name medication, with no readily available generic equivalents (until recently with biosimilars gaining traction). Beneficiaries requiring medications classified as non-preferred brand-name drugs often face coinsurance, requiring them to pay a percentage of the drug’s list price. A key issue with coinsurance is that patient out-of-pocket costs are directly tied to the list price, not the net price after rebates, creating a disconnect between the actual cost of the drug and what patients pay.

Strategies for Improving Insulin Accessibility and Affordability

Enhancing insulin access for people with diabetes hinges on effectively controlling its cost. Several strategies can be implemented to achieve this goal. Encouraging healthcare providers to prescribe lower-cost insulin options is a crucial first step. Facilitating the entry and uptake of biosimilars, addressing market exclusivity periods for biosimilar drugs, and eliminating anticompetitive “pay-for-delay” arrangements that stifle competition from lower-cost alternatives are also essential.49 Additional measures to improve insulin access and affordability include granting payers greater flexibility to negotiate drug prices, particularly within Medicare Part D, increasing transparency in drug pricing across the pharmaceutical supply chain, and promoting value-based pricing models.49

Empowering Prescribers to Utilize Lower-Cost Insulin Options

Over the past two decades, studies have documented a widespread shift among physicians in the United States towards prescribing newer, more expensive insulin analogs.50–52 While insulin analogs offer certain advantages, it is crucial for providers to carefully weigh these benefits against their significantly higher costs and to be fully aware of lower-cost human insulin alternatives. Human NPH and regular insulins are considerably less expensive than long-acting and short-acting insulin analogs. For example, the wholesaler acquisition cost for a 10-mL vial of Novolin N or R is approximately $137.70, compared to $283.60 for a 10-mL vial of Lantus and $289.40 for a 10-mL vial of Novolog.[34](#R34] Furthermore, human insulins are available at significantly discounted prices through Walmart pharmacies as ReliOn/Novolin N and R, priced at just $24.90 per 10-mL vial.34 In late June 2021, Walmart further expanded its affordable insulin offerings by partnering with Novo Nordisk to launch the first-ever private brand insulin analog, ReliOn/Novolog insulin (insulin aspart). This option has the potential to save patients 58-75% off the cash price of the branded insulin analog product.53,54 ReliOn/Novolog insulin, available in both vials and pens, became available in Walmart and Sam’s Club pharmacies by mid-July. 53,54

Clinical trials comparing long-acting insulin analogs to human NPH insulin in patients with type 2 diabetes have shown that analogs modestly reduce the risk of nocturnal hypoglycemia but have not demonstrated a reduction in the risk of severe hypoglycemia or improved overall glycemic control.34,55 A real-world study using data from Kaiser Permanente of Northern California suggested that, in patients with type 2 diabetes, the use of long-acting insulin analogs compared to human NPH insulin is not associated with a reduced risk of hypoglycemia-related emergency department visits or hospital admissions, nor with improved glycemic control.56 In clinical trials involving insulin analogs compared to human insulins in patients with type 1 diabetes, insulin analogs have been associated with less hypoglycemia and weight gain and slightly lower A1C levels. However, for many patients with type 2 diabetes, particularly those facing cost constraints, human NPH and regular insulins represent a reasonable and effective treatment option.57–60 Ultimately, both prescribing physicians and patients must carefully consider the advantages and costs of different insulin options to make informed treatment decisions.

Fostering Competition in the Biosimilar Market

Limited competitive pressure in the insulin market directly contributes to higher prices. Anticompetitive practices, such as pay-for-delay arrangements that block access to lower-cost biosimilar drugs, must be curtailed to promote fair competition. Similarly, the 180-day exclusivity period for generic manufacturers, intended to incentivize the financial risks associated with being a “first-to-file” generic manufacturer, should be reformed to close loopholes that allow for unwarranted extensions of market exclusivity beyond 180 days. Laws should be strengthened to discourage manufacturers from pursuing strategies like filing multiple patents on a single drug or making minor modifications to existing drugs solely to extend patent protection. Shadow pricing, particularly for drugs with limited manufacturers, needs to be addressed to prevent artificial price inflation. Consideration should be given to shortening the market exclusivity period for biological products and removing barriers that impede biosimilar market entry.

Enhancing Payer Negotiation Power for Drug Prices

Medicaid, by statute, is permitted to negotiate drug prices and, as a result, provides beneficiaries with broad medication access at low out-of-pocket costs. This contrasts sharply with Medicare Part D, which is explicitly prohibited from negotiating drug prices. To reduce government spending on prescription drugs, all federal drug benefit programs should be granted greater flexibility to negotiate medication prices with manufacturers and PBMs, leveraging their collective market share and purchasing volume. Similar to Medicaid, these programs could implement “best price” requirements and protections against medication net price increases exceeding the rate of inflation.

Increasing Transparency in the Pharmaceutical Distribution System

For every $100 spent on retail drugs, a significant $41 goes to intermediaries in the distribution chain, including wholesalers, pharmacies, PBMs, and insurers.49 The growing gap between a drug’s list price and its net price reflects negotiated rebates and discounts used to influence formulary placement among competing brands within a drug class. These high list prices disproportionately disadvantage patients who pay the list price directly or pay coinsurance based on the list price, negatively impacting both medication adherence and health outcomes. To address these issues, greater transparency and simplicity must be introduced into drug pricing mechanisms to eliminate distortions that are currently beyond the reach of individual payers to effectively manage.

Reducing Barriers to Value-Based Pricing and Expanding Value-Based Programs

Value-based pricing has been proposed as a promising approach to improve access to life-saving medications like insulin and enhance clinical outcomes for people with diabetes. In this model, the price of a medication is directly linked to its demonstrated benefit to the patient, measured by clinical or financial outcomes. Clinical measures could include laboratory values or patient-reported outcomes, while financial measures might focus on healthcare interventions prevented, such as hospitalizations.49 Outcomes-based pricing schemes,61 are particularly relevant for new biopharmaceutical products used to treat prevalent, costly chronic diseases where uncertainty exists regarding real-world efficacy. This approach could be particularly applicable to newer ultra-fast-acting insulin analogs.

Value-based insurance design (V-BID) offers an alternative and potentially more practical approach to value-based pricing.62 V-BID aligns patient out-of-pocket costs with the value of a health service, regardless of its actual price. The focus shifts to patient cost, not drug price itself. V-BID plans incentivize the use of high-value medications, such as insulin, by lowering patient costs and discourage the use of low-value medications through higher patient cost-sharing. V-BID tools include covering high-value treatments without applying costs to the patient’s deductible (predeductible coverage) and covering such treatments with minimal or no patient coinsurance or copayments.

V-BID principles are already incorporated into the Affordable Care Act, which mandates that health plans cover certain preventive services without patient copayments. Guidelines for V-BID implementation issued by the Secretary of Health and Human Services require group health plans and health insurance issuers to cover preventive services rated A or B by the U.S. Preventive Services Task Force at no out-of-pocket cost to patients.63

The Part D Senior Savings Model: A Promising Initiative

Regulatory barriers currently impede the broader adoption of value-based pricing and V-BID approaches, which could better align medication prices and patient out-of-pocket costs with their clinical benefits. In January 2021, the Centers for Medicare & Medicaid Services Innovation Center launched the Part D Senior Savings Model, a promising new pharmacy payment model.64 This model is designed to test the impact of offering beneficiaries an expanded choice of enhanced alternative Part D plan options that provide lower out-of-pocket insulin costs. The program is available to beneficiaries enrolled in stand-alone prescription drug plans and Medicare Advantage Prescription Drug plans. Participating beneficiaries gain broad access to various types of insulin at a maximum copay of $35 per insulin per month throughout the deductible, initial coverage, and coverage gap phases of the Part D benefit. Participating pharmaceutical manufacturers contribute by paying a 70% discount in the coverage gap for their marketed Part D insulins. Furthermore, Part D sponsors are required to encourage healthy behaviors and medication adherence through Part D rewards and incentive programs.

Given its potential to provide stable and predictable copays for essential insulins across different phases of the Part D benefit, widespread testing, rigorous evaluation, and, if proven effective, broad implementation of the Part D Senior Savings Model holds significant promise for improving access to life-saving insulins for Medicare beneficiaries with diabetes.

Conclusion: Ensuring Insulin Access for All

The discovery of insulin and subsequent advancements in insulin formulations and delivery have profoundly transformed the lives of people with diabetes. Insulin is not only life-sustaining for individuals with type 1 diabetes but also crucial for effective glycemic management and improved health outcomes for many with type 2 diabetes. Recognizing its essential role, insulin is included on the World Health Organization’s Model Lists of Essential Medicines.65 However, on the 100th anniversary of its discovery, a stark reality persists: globally, approximately one in two people with diabetes who need insulin cannot access or afford it,66,67 and in the United States, a concerning 25-30% report rationing or skipping insulin doses due to cost.25–27 Globally, outside of the United States, 6.5% of patients in high-income countries and a staggering 22-68% in low- and middle-income countries report skipping insulin due to access or cost barriers.25–27 Substantial improvements in insulin availability and affordability are urgently needed to address these inequities and prevent diabetes-related complications. While ongoing developments hold the potential to further enhance the safety and effectiveness of insulin therapy, the paramount challenge remains ensuring that insulin is accessible and affordable for all individuals with diabetes who can benefit from it. Government agencies, professional societies, PBMs, and insulin manufacturers must collaborate to ensure that insulin, a century after its discovery, truly belongs to the world and is accessible and affordable for everyone with diabetes.

Key Takeaways:

Insulin therapy, a cornerstone of diabetes treatment, was discovered a century ago.
Insulin prices and expenditures in the United States have risen dramatically in the last decade, creating significant financial barriers to treatment access.
Multiple factors contribute to the increased cost of insulin, including the shift to more expensive insulin analogs, substantial price hikes across all insulin types, prescribing practices, policies limiting payer negotiation power, and lack of transparency in the insulin supply chain.
Clinical and policy strategies can be implemented to improve insulin access and affordability, including promoting lower-cost insulin prescribing, ensuring timely biosimilar availability, strengthening patent and market exclusivity requirements, enhancing payer price negotiation power, increasing drug pricing transparency, and implementing value-based pricing models.

Clinic Care Points:

Insulin is indispensable for survival in type 1 diabetes and often necessary for glycemic management in type 2 diabetes.
High insulin costs are linked to underuse, increasing the risk of diabetes complications and premature mortality.
Clinicians and patients must collaboratively weigh the advantages and costs of insulin therapy options.
Human insulins (NPH and regular) can be appropriate, lower-cost alternatives to insulin analogs for many type 2 diabetes patients, especially those with less stringent A1C goals, low hypoglycemia risk, significant insulin resistance, or cost concerns, and for type 1 diabetes patients facing affordability challenges, including biosimilars.
Collaborative efforts among professional organizations, government agencies, health plans, insulin manufacturers, PBMs, and pharmacies are essential to ensure insulin accessibility and affordability for all people with diabetes.

Disclosure

DISCLOSURE: Neither W.H. Herman nor S. Kuo have any relevant financial disclosures.

Publisher’s Disclaimer: This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

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