What Does Insulin Cost and What's Behind the Skyrocketing Prices?

insulin prices

 Lara Antal / Verywell

Key Takeaways

  • Insulin prices in the United States have tripled over the past decade. Patients are now paying double the amount in out-of-pocket costs.
  • Experts say that it remains to be seen whether executive orders will change the price of insulin.
  • Currently, there are drug-makers that rule the market on insulin—an issue that has driven cost.

Over 34 million Americans have diabetes. Of those patients, 7 million require some form of insulin. One of the biggest concerns for patients and prescribers leading up to the election and beyond is the rising price of insulin.

In the past decade, the cost of insulin has tripled in the United States. According to research from the Yale School of Medicine, the out-of-pocket cost for patients has doubled—a situation that is becoming dire. One in 4 patients say that they ration their insulin because they can't afford it, which has led to the loss of life in some cases.

Stephanie Redmond, PharmD, CDE, BC-ADM

Without a doubt, insulin is lifesaving, and just a day or so without it will require hospitalization and could lead to death for those patients.

— Stephanie Redmond, PharmD, CDE, BC-ADM

“If someone has type 1 diabetes or if someone has had damage to their pancreas, these are instances where their body doesn’t produce any insulin,” Stephanie Redmond, PharmD, CDE, BC-ADM, founder of Diabetes Doctor, tells Verywell. “Without a doubt, insulin is lifesaving, and just a day or so without it will require hospitalization and could lead to death for those patients.”

Executive Orders on Drug Prices

Aft the first presidential debate, President Donald Trump claimed of insulin, “I’m getting it for so cheap it’s like water.” The statement prompted questions about insulin prices following a spate of executive orders that Trump signed over the summer. These orders included language aimed at lowering insulin and other drug prices for Americans.

Robin Feldman, Professor of Law, UC Hastings College of Law San Francisco

One would have to see how these orders were implemented to know how powerful and effective they will be.

— Robin Feldman, Professor of Law, UC Hastings College of Law San Francisco

“We are still seeing many struggle in clinical practice with affordability,” says Redmond. “So it is unclear to most healthcare providers who gets these insulin cap benefits. Even myself as an expert would really love any more guidance on this. There are eligibility requirements that many patients still don’t meet.”

“As with any legal order, the devil's in the detail,” Robin Feldman, Arthur J. Goldberg Distinguished Professor of Law at UC Hastings College of Law San Francisco, tells Verywell. “One would have to see how these orders were implemented to know how powerful and effective they will be. We are, however, going to need some systemic changes to try to address the problems that are driving drug prices higher in general, and insulin prices higher specifically.”

Cost of Insulin

People with diabetes have 2.3 times the healthcare costs of Americans who don't have the condition. One of the most influential factors driving that difference is the cost of insulin. How much people pay out of pocket for insulin depends on many variables, including whether they have insurance, what kind of plan they have, and coverage details such as the plan’s deductible. How much insulin and what types a person needs to manage their condition also vary from patient to patient.

In her experience as a physician and pharmacist, Redmond says that most patients need about two vials of insulin per month or one to two packs of insulin pens. Each pen pack is equivalent to about one and a half vials. The price for a vial of insulin ranges from $175 to $250, and a pack of pens ranges from $375 to $500.

A report by the Health Cost Institute found that Americans with type 1 diabetes (T1D) spent an average of nearly $6,000 per person on insulin in 2016 alone.

In 2016, the total average out-of-pocket pharmacy and medical costs for people with diabetes reached $18,500—a jump of $6,000 from 2012. Increased spending on insulin accounted for nearly half of that spike.

According to research by the American Diabetes Association’s Insulin Access and Affordability Working Group, of adults with diabetes living below the poverty line, about 24% use insulin. 

A person with diabetes who lives alone could be spending more than half of their annual income on out-of-pocket insulin costs.

“Prices are too high,” Redmond says. “Not just for insulin but for most diabetes medications. All of it is still insanely expensive.”

Many people with diabetes also have the added expenses of required pharmacy supplies, such as test strips, syringes, sensors for any diabetes tech, additional prescription drugs, doctor’s visits, and hospital stays. According to the Health Cost Institute report, non-insulin pharmacy needs cost individuals with type 1 diabetes over $4,000, on average in 2016. Additional medical expenses cost an average of about $8,500.

The Role of Insurance 

The ADA’s Insulin Access and Affordability Working Group report found that nearly half of Americans have employer-sponsored health insurance. About 20% are insured through Medicaid, and 14% are insured through Medicare. Approximately 7% of Americans purchase health insurance on their own—either directly from an insurer or through a health insurance exchange. About 9% of Americans remain uninsured.

Diabetes is considered a pre-existing condition. According to research published in Diabetes Care, an estimated 1.9 million uninsured people with diabetes gained insurance coverage after the Affordable Care Act (ACA) went into effect. More than half of those who gained insurance were low-income.

Still, having insurance doesn't mean insulin is affordable. Insured patients will often pay a copay or a percentage, rather than the list price, for their insulin. Redmond says that cost could range from $30 to $50.

In cases of high-deductible health plans, patients have to pay the list price for their insulin until their deductible is met, which often translates to thousands of dollars out of pocket. “Many patients just have a problem paying that much,” says Redmond.

Drug Company Response

Pharmaceutical companies have responded to criticism about high prices—for example, some companies offer discount cards. However, Redmond explains that doesn't help every patient. “You can’t use them if you have Medicare, and many of them cap at $100-$150,” says Redmond of the discount programs. “So if you have a high deductible of thousands of dollars, these coupons are not that helpful, because that patient may still be paying $300 out of pocket for their insulin or more until their deductible is met.”

Some drug companies have also started assistance programs for patients who are low-income. “These are good options but take a lot of time and a knowledgeable doctor who is willing to take that time and help them with the forms,” says Redmond, adding that many clinics don’t have certified diabetes care and education specialists (CDCES), social workers, or care coordinators who can help.

Many insulin makers have implemented programs in response to COVID-19. For example, in April, Novo Nordisk announced that it would offer a free 90-day supply of insulin to patients who had lost their health insurance during the pandemic. 

Sanofi also has a temporary access program to provide patients experiencing financial hardship who qualify with a 30-day supply of their medication.

Eli Lilly launched its Insulin Value Program in April. The program offers a $35 copay card for the uninsured or those with commercial insurance. Lily recently announced in a press release that it would continue this program for the foreseeable future. 

What This Means For You

You or a loved one might be paying high prices for insulin. Check with your insulin manufacturer to see if you qualify for a patient assistance program. If you aren't eligible for these programs, talk to your healthcare provider or certified diabetes care and education specialist (CDCES) about other options.

Insulin Price Drivers

Three pharmaceutical companies—Novo Nordisk, Sanofi-Aventis, and Eli Lilly—control the market, leaving little to no room for competition. “The big three produce 90% of the global insulin supply and close to 100% of the U.S. insulin supply,” says Feldman. “Observers have noticed that the big three tend to mirror each other’s insulin price increases. When one raises prices, the others quickly follow.”

Feldman says the companies have become adept at what’s called evergreening. “Evergreening involves various techniques to extend protection on a drug and block competition that can reduce prices."

Evergreening includes both patent and non-patent rights exclusivities that shut out other drug makers from the insulin marketplace.

Many brand name drugs have a generic that becomes the preferred, cheaper alternative. However, the Food and Drug Administration (FDA) has historically treated insulin as a drug and a biologic, which have different regulatory pathways.

The distinction is important because medications that are treated as highly similar to a biologic are called biosimilars, not generics. Biosimilars must go through a specific approval pathway.

According to the American Diabetes Association, the original brand name insulins went through the drug pathway rather than the biologic pathway, which meant competitors could not introduce a biosimilar insulin.

In March, the FDA moved to label insulins as biologics, which opened the door for new biosimilars. However, hurdles remain. Feldman says that the approval process is more complicated for biosimilars than for generics, and the substitution process at the pharmacy is more difficult as well.

Robin Feldman, Professor of Law, UC Hastings College of Law San Francisco

Insulin is a very old drug. We've known about it for a long time. Patients shouldn’t be paying through the nose for it now a hundred years later.

— Robin Feldman, Professor of Law, UC Hastings College of Law San Francisco

State laws allow pharmacists to automatically substitute a generic version for drugs, but that automatic substitution is not available for biosimilars. A biosimilar must be categorized as interchangeable, but there are currently no FDA-approved interchangeable medications in the U.S. 

“It’s a huge impact,” says Feldman. “Because automatic substitution is the way that generic drugs traditionally make inroads in the market and bring prices down.”

The FDA approved a long-acting biosimilar insulin called Semglee this summer. However, patients and physicians must specifically request the biosimilar because of the lack of automatic substitution. Feldman says that historically, that doesn’t happen. “It'll be interesting to see how much Semglee alters current market dynamics,” says Feldman. “I’m not holding my breath.”

Additionally, intermediaries along the insulin supply-chain can drive up costs or keep new drugs from gaining a foothold. “Existing players with large market share can use volume discounts to discourage [pharmacy benefits managers] and health plans from covering the new entrant,” says Feldman.

The bottom line is that the three-company monopoly is hurting people with diabetes. “Insulin is a very old drug,” says Feldman. “We've known about it for a long time. Patients shouldn’t be paying through the nose for it now a hundred years later.”

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Article Sources
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