Price cuts, legislation aim to reverse 2 decades of increasing insulin costs
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After years of steadily increasing insulin prices, a combination of state and federal legislation and price reductions from pharmaceutical companies could provide relief for people with diabetes.
The early part of the 21st century saw insulin prices greatly increase across the U.S. A study published in JAMA in 2020 found the list price for seven types of insulin increased by 262% from 2007 to 2018. While much of the list price increase was offset by discounts, the net price of insulin still increased by 51%, or by 4.2% annually.
Photo by Kellie Fleck. Printed with permission.
Diana Isaacs, PharmD, BCPS, BCACP, BC-ADM, CDCES, FADCES, clinical pharmacy specialist and director of education and training in diabetes technology in the department of endocrinology, diabetes and metabolism at the Cleveland Clinic Diabetes Center and an Endocrine Today Editorial Board Member, said the same factors contributing to the insulin price increases have led to higher prices for prescription drugs overall. However, unlike some other drugs, some people with diabetes need insulin to live.
“Insulin is required for people with type 1 diabetes,” Isaacs told Endocrine Today. “It’s not some luxury medication. There’s been a bunch of stories of people rationing insulin and people even dying because they didn’t have access to insulin.”
Over the past 4 years, new laws and price reductions have aimed to make insulin more affordable for consumers. In 2019, Colorado became the first state to pass legislation capping out-of-pocket insulin costs. The law kickstarted a wave of legislation that has seen 22 states and the District of Columbia adopt some form of monthly out-of-pocket cap for insulin spending. Additionally, the federal government adopted an insulin cap for Medicare Part D beneficiaries that took effect on Jan.1, 2023.
In March, 2 months after the Medicare Part D cap went into effect, the three leading insulin manufacturers in the U.S., Eli Lilly, Novo Nordisk and Sanofi, all announced large price reductions, with Eli Lilly and Sanofi also announcing plans to cap out-of-pocket insulin costs for all people with commercial insurance using their insulins.
Irl B. Hirsch, MD, professor of medicine at the University of Washington School of Medicine in Seattle, said the recent changes are a “step in the right direction.”
“I have a much better feeling that 2 to 3 years from now, we’re not going to see as much intentional insulin withholding and that, hopefully, the diabetic ketoacidosis rates will start going down in our type 1 population,” Hirsch told Endocrine Today. “They’re never going to get to zero, but nobody should have to be hunting and scrounging for insulin.”
A wave of state, federal legislation
Susan Cornell, PharmD, CDCES, FAPhA, FADCES, associate director of experiential education and professor in the department of pharmacy practice at Midwestern University College of Pharmacy in Downers Grove, Illinois, and an Endocrine Today Editorial Board Member, said that the increase in insulin cost goes beyond the price set by pharmaceutical companies and includes factors involving health insurance companies and pharmacy benefit managers.
“The pharmacy benefit managers control what medications are going to get to the pharmacy and into the hands of the patient based on the negotiations with the pharmaceutical companies,” Cornell told Endocrine Today. “The pharmaceutical companies have to share their wares and have to make deals on their wares in order to get their drug onto a formulary so that it’s covered by insurance, and some of this money is going to the pharmacy benefit managers. Bottom line, there are too many cooks in the kitchen.”
With the cost of insulin increasing by more than 4% annually from 2007 to 2018, some people with diabetes were forced to balance finances with their health. In a small study published in JAMA Internal Medicine in 2018, about one-quarter of people with type 1 or type 2 diabetes reported insulin underuse due to cost-related factors. People with lower incomes were more likely to report underuse, and those who reported cost-related underuse of insulin were more likely to have poor glycemic control than those who did not underuse insulin.
“What happens is that people are rationing, and their glucose levels are higher, so we go up on their doses not realizing they are rationing,” Isaacs said. “They don’t really need as much insulin as we’re prescribing. Then when they do take their prescribed dose, they may go too low. It’s a roller coaster.”
After years of rising costs, the first law limiting out-of-pocket insulin costs was passed in May 2019 in Colorado and capped copays for people with commercial insurance at $100 per month. In January 2020, Illinois followed by capping 30-day out-of-pocket insulin costs at $100. Two months later, New Mexico set a cap at the much lower amount of $25.
According to the American Diabetes Association, 22 states and the District of Columbia have approved some form of legislation capping the cost of insulin, diabetes devices or diabetes supplies for state-regulated health plans. While some states, including Alabama, New York, Vermont and West Virginia, have followed Colorado’s lead in capping out-of-pocket insulin costs at $100 for a 30-day supply, many states have opted for a lower cap.
In March, Washington became the latest state to institute a permanent $35 out-of-pocket cap on insulin for people with commercial insurance. Hirsch said Washington previously implemented a cap of $35 per month for out-of-pocket insulin costs, but the plan applied only to some state-sponsored health insurance plans and was due to expire at the end of 2023.
“Now all citizens in the state of Washington will have the same cost for insulin,” Hirsch said. “It’s a major deal.”
While nearly half of U.S. states have passed insulin caps, getting a similar law passed at the federal level has been more challenging. In November 2021 and March 2022, the U.S. House of Representatives voted to approve bills that would have capped out-of-pocket insulin costs at $35 for Medicare Part D beneficiaries and Americans with private health insurance. However, both bills stalled in the U.S. Senate.
In August 2022, an insulin cap at the federal level was approved as part of the Inflation Reduction Act. However, the approval differed from previously proposed bills in that it capped insulin costs at $35 only for Medicare Part D beneficiaries.
While it is too early to determine the direct impact of the Medicare cap, a report from HHS published in January showed the new law could greatly benefit older adults. According to the report, Medicare beneficiaries spent a mean $63 out-of-pocket per insulin fill in 2019. If an insulin cap had been in effect in 2020, Medicare Part D beneficiaries would have saved a total of about $734 million.
While the new cap could reduce out-of-pocket costs for Medicare beneficiaries, Cornell said people with diabetes will need to pay attention to which types of insulin their specific plan will cover, as it is unclear which insulins may be covered. The Inflation Reduction Act does not specify insulin type; it states the cap applies to “any covered insulin product.” The law defined a covered insulin product as insulin that is a covered Part D drug under the prescription drug plan or Medicare Advantage prescription drug plan that is approved under section 505 of the Federal Food, Drug and Cosmetic Act or licensed under section 351 of the Public Health Service Act.
“You may have one Medicare Part D plan and they’re going to cover detemir, but then another Medicare Part D plan is going to cover glargine,” Cornell said. “You could have two different plans and it depends on what’s going to get covered in their plan. This is where it’s going to get very confusing. Are people going to be flip-flopping insurance plans and how does that affect the quality of what the patient is getting?”
Leading insulin manufacturers cut prices
Just months after the Medicare Part D cap went into effect, the three leading insulin manufacturers in the U.S. announced price reductions. Eli Lilly and Co. was the first, on March 1, to announce that the price of its non-branded insulin lispro injection 100 U/mL would be cut to $25 and the prices of its branded insulin lispro injection (Humalog) and human insulin (Humulin) would drop by 70%. Additionally, Lilly stated it would automatically cap out of-pocket insulin costs at $35 for people with commercial insurance at participating retail pharmacies.
During a virtual press conference, Mike Mason, executive vice president of Eli Lilly and Co. and president of Lilly Diabetes, said the company’s out-of-pocket cap will cover about 85% of people with commercial insurance. People whose insurance does not come with the automatic $35 reduction or those without health insurance can download the Lilly Insulin Value Program savings card at insulinaffordability.com and bring it to their pharmacy.
“Our $35 program will apply to everyone,” Mason said during the press conference. “If you have Medicaid or Medicare, those programs already have an out-of-pocket [cap] for patients who use our insulin that’s at $35 or less. Now you have a population that has commercial insurance or are uninsured, and our programs will support everyone.”
On March 14, Novo Nordisk announced insulin price cuts of up to 75% beginning on Jan. 1, 2024. In a press release, the company said it will reduce the price of its branded insulin aspart (NovoLog) and insulin aspart protamine/insulin aspart mix (NovoLog Mix 70/30) by 75%. The price of unbranded insulins will drop to match the price of the branded products. Novo Nordisk also announced the price of its insulin detemir (Levemir) and human insulin (Novolin) will be cut by 65%.
On March 16, Sanofi announced its own price cuts and an out-of-pocket cap for people with commercial health insurance. Beginning on Jan. 1, 2024, Sanofi said in a press release, the company will reduce the price of 100 U/mL insulin glargine injection (Lantus) by 78% as well as 100 U/mL short-acting insulin glulisine injection (Apidra) by 70%. Additionally, people with commercial insurance will pay no more than $35 out-of-pocket per month for insulin.
Sanofi officials did not reply to multiple requests for comments from Endocrine Today. Novo Nordisk officials declined an interview request from Endocrine Today.
Of the three companies, Issacs said, Lilly’s price reductions and $35 cap for commercial insurance may have the largest impact.
“Looking at the different programs, Lilly’s program seems like it’s going to most benefit my patients,” Isaacs said. “It takes effect more quickly. The $35 cap is already in effect, and the price reductions came in April vs. Novo Nordisk and Sanofi that are happening a bit later.”
Cornell cautioned that the companies’ price reductions apply to only some insulins. Additionally, she noted Lilly’s $35 out-of-pocket cap may not apply to all pharmacies.
“The independent pharmacies, the mom-and-pop shops, may not be able to participate in this because they are not part of the coverage plan,” Cornell said. “Eli Lilly doesn’t know which pharmacies participate in the pharmacy benefit manager plan they are working with.”
Hirsch said a big reason for the price reductions can be attributed to the availability of newer agents, such as dulaglutide (Trulicity, Eli Lilly), semaglutide (Ozempic/Wegovy, Novo Nordisk) and tirzepatide (Mounjaro, Eli Lilly). Hirsch said these agents have driven down insulin use and that trend will likely continue in the years ahead.
“It’s not a coincidence that the companies that make semaglutide, tirzepatide and dulaglutide are the same companies that make insulin,” Hirsch said. “These insulin companies are not really losing much because they are gaining, not millions, but billions of dollars in sales.”
Ways to further reduce insulin costs
While insulin use may decline in the future, it will remain a vital tool for many people with diabetes. Isaacs said the price reductions will likely help decrease insulin rationing but may stifle development of newer insulins.
“The next big thing I’m looking forward to is weekly insulin, which I really think will be beneficial to a lot of people,” Isaacs said. “I’d like to see faster-acting insulins, more targeted insulin, there’s a lot of potential in this space. But if nobody can make money selling insulin, there’s going to be no incentive to do research and that’s a big concern.”
Isaacs added that the lack of cost control surrounding GLP-1 receptor agonists and SGLT2 inhibitors could put use of these more expensive, newer agents out of reach for people with type 2 diabetes and cause them to use insulin, even if that treatment regimen goes against evidence-based guidelines.
While recently announced caps and price reductions are a big step forward, Hirsch said they are not perfect. He believes Congress missed an opportunity to approve a nationwide out-of-pocket cap on insulin costs for all people with diabetes.
“I don’t want to minimize how important this has been for seniors,” Hirsch said of the Medicare Part D cap. “But the more important part of the story is it could have been for everybody.”
Cornell said that the announced changes do not include some newer insulins. She believes a tiered system that reduced the prices of all types of insulin would be most beneficial for people with diabetes.
“I understand something like insulin degludec or insulin glargine U-300, which are your ultra long-acting insulins and really do a whole lot of good with less side effects, maybe they’re not $35, but could we make them $49?” Cornell said. “Could we have an affordable tier for less long-acting insulins and rapid-acting insulins, and then maybe a different tier for your ultra rapid-acting and ultra-long basal insulins? The bottom line is if we’re picking and choosing which insulins, they need to all be affordable. We need the optimal insulin as well as the older versions.”
Click here to read the sidebar, "How Colorado's insulin cap law evolved."
- References:
- American Diabetes Association. State Insulin Copay Caps. https://diabetes.org/tools-support/insulin-affordability/state-insulin-copay-caps. Accessed April 7, 2023.
- Congress.gov. H.R. 5376 – Inflation Reduction Act of 2022. Available at: www.congress.gov/bill/117th-congress/house-bill/5376/text. Accessed April 7, 2023.
- Congress.gov. Public Law 117-169. Available at: www.congress.gov/117/plaws/publ169/PLAW-117publ169.pdf. Accessed April 7, 2023.
- Herkert D, et al. JAMA Intern Med. 2019;doi:10.1001/jamainternmed.2018.5008.
- Hernandez I, et al. JAMA. 2020;doi:10.1001/jama.2020.1012.
- Lilly cuts insulin prices by 70% and caps patient insulin out-of-pocket costs at $35 per month. https://investor.lilly.com/news-releases/news-release-details/lilly-cuts-insulin-prices-70-and-caps-patient-insulin-out-pocket. Published March 1, 2023. Accessed April 6, 2023.
- Novo Nordisk to lower US prices of several pre-filled insulin pens and vials up to 75% for people living with diabetes in January 2024. https://www.novonordisk.com/news-and-media/latest-news/lowering-us-list-prices-of-several-products-.html. Published March 14, 2023. Accessed April 6, 2023.
- Sanofi cuts US list price of Lantus, its most-prescribed insulin, by 78% and caps out-of-pocket Lantus costs at $35 for all patients with commercial insurance. https://www.sanofi.com/en/media-room/press-releases/2023/2023-03-16-20-06-43-2629188. Published March 16, 2023. Accessed April 6, 2023.
- Sayed BA, et al. Insulin affordability and the Inflation Reduction Act: Medicare beneficiary savings by state and demographics. Office of the Assistant Secretary for Planning and Evaluation, HHS. https://aspe.hhs.gov/reports/insulin-affordability-ira-data-point. Published Jan. 24, 2023. Accessed April 7, 2023.
- For more information:
- Susan Cornell, PharmD, CDCES, FAPhA, FADCES, can be reached at scorne@midwestern.edu.
- Irl B. Hirsch, MD, can be reached at ihirsch@uw.edu.
- Diana Isaacs, PharmD, BCPS, BCACP, BC-ADM, CDCES, FADCES, can be reached at @dianamisaacs.
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