Key Takeaways

The three primary manufacturers of insulin in the United States have each announced major price cuts on their products, signaling a shift in notoriously expensive diabetes care:

The recent insulin price cut announcements follow 2022 legislation that also caps insulin costs at $35 per month, but only for Medicare beneficiaries—adults aged 65 and older.

How the Inflation Reduction Act Will Reduce Health Care Costs for Seniors

Because people on Medicare make up only 3.3 million of the roughly 8 million insulin users in the U.S.,the recent legislation doesn’t really move the needle for the majority of people with diabetes. Now that manufacturer price cuts extend to people with private insurance and people without insurance, are Americans with diabetes poised to be in a better financial place?

“We are already seeing that patients’ ability to use insulin has improved tremendously,” he said.

Who Needs Insulin?Insulinis a hormone produced in the pancreas responsible for regulating the amount of glucose—or sugar—in the bloodstream. Because people with type 1 diabetes can’t produce their own insulin, they need to take insulin medication every day, whether through a syringe, pen, pump, or inhaler.Up to30%of people with type 2 diabetes may also need to take insulin if their bodies don’t produce enough of it.

Who Needs Insulin?

Insulinis a hormone produced in the pancreas responsible for regulating the amount of glucose—or sugar—in the bloodstream. Because people with type 1 diabetes can’t produce their own insulin, they need to take insulin medication every day, whether through a syringe, pen, pump, or inhaler.Up to30%of people with type 2 diabetes may also need to take insulin if their bodies don’t produce enough of it.

Insulinis a hormone produced in the pancreas responsible for regulating the amount of glucose—or sugar—in the bloodstream. Because people with type 1 diabetes can’t produce their own insulin, they need to take insulin medication every day, whether through a syringe, pen, pump, or inhaler.

Up to30%of people with type 2 diabetes may also need to take insulin if their bodies don’t produce enough of it.

Why Is Insulin So Expensive in America?

What Is a ‘Unit’ of Insulin?For data in this article, a “unit” of insulin is roughly equivalent to a 3 milliliter container with a concentration of 100 units/milliliter of insulin, the most commonly-used insulin size and concentration.

What Is a ‘Unit’ of Insulin?

For data in this article, a “unit” of insulin is roughly equivalent to a 3 milliliter container with a concentration of 100 units/milliliter of insulin, the most commonly-used insulin size and concentration.

According toKasia Lipska MD, MHS, BS, an endocrinologist at the Yale School of Medicine, the U.S. healthcare system is to blame for the uniquely high cost of insulin in America.

“We have a convoluted system in the U.S. in which profit is exacted at every step of the way, from when insulin is manufactured to when it reaches the patient,” she told Verywell. “The rising cost of insulin means that people are forced to pay more out of pocket. In Yale’s study based on national data, one in seven Americans reached catastrophic levels of spending on insulin, meaning they spent 40% or more of their disposable income on insulin alone.”

The upper end of this markdown is nearly identical to the percentage insulin manufacturers are cutting their list prices, Andrew Mulcahy, PhD, MPP, senior health economist and lead author of the RAND study, told Verywell.

Who Will Benefit from Eli Lilly’s Insulin Price Cuts?

Because most people are not paying cash for the full manufacturer price to begin with, the overall amount of money insulin manufacturers receive for drug sales won’t change much. Instead of reducing the cost of insulin for the consumer, the manufacturer price cuts are effectively replacing the rebates and discounts PBMs were extracting from insulin manufacturers.

“These price reductions will sting most for PBMs, who no longer will be able to tally up huge negotiated savings from rebates on these insulin products,” Mulcahy said.

Even if the U.S. gross manufactured insulin prices were adjusted down 75% like each of the companies have announced, insulin costs will still average $24.68 per unit compared to $12.26 for non-US OECD nations. Since many people with diabetes need two or three vials of insulin per month, costs would soar upwards of $50 in the absence of a monthly price cap.

This price markup in the U.S. holds for every type and timing of insulin, and accounts for the fact Americans tend to buy pricier types of insulin. Long-acting insulin is over 64% more expensive than in other high-income countries, while rapid-intermediate-acting insulin is almost 218%more expensive. Even taking into account a 75% rebate, no OECD nations except Chile had average insulin prices higher than the U.S.

What Will It Take to Truly Level the Playing Field?

In 2021, the Food and Drug Administration (FDA) approved the use of Semglee, a generic insulin option that is hundreds of dollars cheaper than brand name products on the market. Indeed, data fromGoodRxsuggests that the average retail price of insulin has already fallen about 5% from January of 2020 to October of 2021.

Overview of the Types of Insulin

Insulin prices will likely continue to drop in response to deregulation, legislation, and subsequent industry discounts. But prices in the U.S. need substantial continued markdowns to approach levels comparable with other high-income nations.

While Pauly is of the belief that more legislation won’t help curb insulin costs in America, Lipska thinks anything helps—including brand new channels for insulin production,like the state of California is pursuing.

‘The [current] assistance programs from manufacturers do not have a wide reach," she said. “They are not easy to navigate, often involve paperwork, and are temporary solutions for a narrow swath of the population.”

4 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare & Medicaid Services.Part D senior savings model.Bakkila BF, Basu S, Lipska KJ.Catastrophic spending on insulin in the United States, 2017-18.Health Aff (Millwood). 2022;41(7):1053-1060. doi:10.1377/hlthaff.2021.01788Altarum.The impact of prescription drug rebates on health plans and consumers.Mulcahy AW, Schwam D, Rao P, Rennane S, Shetty K.Estimated savings from international reference pricing for prescription drugs.JAMA.2021;326(17):1744–1745. doi:10.1001/jama.2021.13338

4 Sources

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Centers for Medicare & Medicaid Services.Part D senior savings model.Bakkila BF, Basu S, Lipska KJ.Catastrophic spending on insulin in the United States, 2017-18.Health Aff (Millwood). 2022;41(7):1053-1060. doi:10.1377/hlthaff.2021.01788Altarum.The impact of prescription drug rebates on health plans and consumers.Mulcahy AW, Schwam D, Rao P, Rennane S, Shetty K.Estimated savings from international reference pricing for prescription drugs.JAMA.2021;326(17):1744–1745. doi:10.1001/jama.2021.13338

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

Centers for Medicare & Medicaid Services.Part D senior savings model.Bakkila BF, Basu S, Lipska KJ.Catastrophic spending on insulin in the United States, 2017-18.Health Aff (Millwood). 2022;41(7):1053-1060. doi:10.1377/hlthaff.2021.01788Altarum.The impact of prescription drug rebates on health plans and consumers.Mulcahy AW, Schwam D, Rao P, Rennane S, Shetty K.Estimated savings from international reference pricing for prescription drugs.JAMA.2021;326(17):1744–1745. doi:10.1001/jama.2021.13338

Centers for Medicare & Medicaid Services.Part D senior savings model.

Bakkila BF, Basu S, Lipska KJ.Catastrophic spending on insulin in the United States, 2017-18.Health Aff (Millwood). 2022;41(7):1053-1060. doi:10.1377/hlthaff.2021.01788

Altarum.The impact of prescription drug rebates on health plans and consumers.

Mulcahy AW, Schwam D, Rao P, Rennane S, Shetty K.Estimated savings from international reference pricing for prescription drugs.JAMA.2021;326(17):1744–1745. doi:10.1001/jama.2021.13338

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