Insulin Prices
Frederick Banting and Charles Best discovered insulin at the University of Toronto in 1921. They sold the patent for one dollar. Banting said it would be unconscionable to profit from a drug that people needed to survive. A century later, one in four American insulin users ration their supply because they cannot afford it.
The Drug and the Market
Insulin is not optional. For people with Type 1 diabetes, it is required every day to stay alive. For many with Type 2, it is the only treatment that controls their blood sugar after other medications fail. Approximately 8.4 million Americans depend on insulin.
The first human patient, Leonard Thompson, received an injection in January 1922. He was 14. Eli Lilly began commercial production the same year. The first recombinant insulin product, Humulin, won FDA approval on October 28, 1982, making it the first recombinant DNA drug ever approved.
Three companies manufacture virtually all insulin sold in the United States: Eli Lilly, Novo Nordisk, and Sanofi. Each holds roughly one-third of the market. Combined, they control 99% of insulin sales by value and 96% by volume. This is not a competitive market. It is an oligopoly with three participants and no meaningful price competition.
The Price History
Eli Lilly launched Humalog in 1996 at $21 per vial. By 2017, the same vial cost $275. That is a 1,200% increase for a drug whose active ingredient had not changed.
The broader picture is worse. The average insulin vial cost $9 in 1972. By 2017, it cost $275. That is a 30-fold increase over 45 years, far outpacing inflation, wage growth, or any reasonable measure of improved manufacturing cost.
The 30-day supply cost tells the story of the recent acceleration: $271 in 2012, rising to $499 by 2021. A 184% increase in nine years. Total US insulin spending tripled to $22.3 billion in 2022.
Growth Rates by Era
Annual price growth shifted dramatically across decades:
| Period | Annual Price Growth |
|---|---|
| 1991 to 2001 | 2.9% |
| 2002 to 2012 | 9.5% |
| 2012 to 2016 | 20.7% |
| 2016 to 2018 | 1.5% |
The 2012 to 2016 period stands out. Prices grew at 20.7% per year, nearly doubling in four years. The deceleration after 2016 coincided with congressional scrutiny, patient advocacy campaigns, and state-level legislative action. Political pressure worked. It took years to produce even partial results.
International Comparison
Americans pay more for insulin than patients in any other developed country. The gap is not small.
| Country | Average Price per Vial | Ratio to US Price |
|---|---|---|
| United States | $22.68 | 1.0x |
| Canada | $3.75 | 0.17x |
| Japan | $3.20 | 0.14x |
| Germany | $3.11 | 0.14x |
| United Kingdom | $2.20 | 0.10x |
US gross insulin prices are 9.71 times the OECD average. Even after accounting for rebates, US prices remain roughly 2.3 times higher than in other high-income countries. The same molecule, made in the same factories, costs ten times more when dispensed to an American patient. Every other country on that list uses some form of price regulation. The US does not. That is the entire explanation. For a broader look at how this gap exists across drug categories, see international drug price comparisons.
Shadow Pricing
The three insulin manufacturers raised prices in near-perfect lockstep for over a decade. No formal collusion has been proven. The pattern, however, is consistent with shadow pricing: competitors matching each other's price signals without an explicit agreement.
Novo Nordisk and Sanofi raised prices in tandem at least 13 times since 2009. In May 2014, both raised prices by 16.1% within one day of each other. Six months later, both raised prices by 11.9%. Humalog (Eli Lilly) and NovoLog (Novo Nordisk) moved in parallel 17 times over ten years.
This pattern does not require a phone call or a meeting. In a market with three participants, transparent pricing, and no government price controls, each company can observe and match the others' moves in real time. The result is indistinguishable from coordination. Patients paid the price of a market that functioned like a cartel without technically being one.
The Gross-to-Net Paradox
Insulin is the clearest example of a structural problem in US drug pricing: the gap between the list price and the net price manufacturers actually receive. Understanding this gap requires knowing how drug prices are set in the US system.
Between 2014 and mid-2017, Eli Lilly raised Humalog's list price by 52%. Over the same period, Lilly's per-patient revenue fell by 8%. Between 2015 and 2019, Humalog's list price rose 27% while the net price dropped 14%. The difference went to pharmacy benefit managers and supply chain intermediaries as rebates.
The industry-wide picture is starker. For the four leading insulin products between 2012 and 2019, gross sales doubled from $13 billion to $27 billion. Net sales dropped 40%, from $8 billion to $5 billion. By 2019, price concessions exceeded 80%. For every dollar of list price, manufacturers kept less than 20 cents.
This created a perverse incentive loop. PBMs demanded larger rebates in exchange for formulary placement. Manufacturers raised list prices to fund those rebates. Patients on high-deductible plans and the uninsured paid based on the list price. The people with the least bargaining power paid the highest prices.
The Human Cost
A 2017 Yale study found that one in four insulin-dependent patients rationed their supply: skipping doses, using less than prescribed, or delaying refills. A follow-up in 2024 found the rationing rate unchanged. Seven years of headlines, legislation, and manufacturer concessions had not moved the number.
When broader access barriers are included, 37.7% of patients reported some form of insulin rationing. The rate was higher among Type 1 patients (59.7%) than Type 2 (40.3%). Type 1 patients have no alternative. Without insulin, they die.
People did die. Multiple deaths have been directly linked to insulin rationing. "26 and Insulin Dependent" became a phrase in patient advocacy after young adults aged out of their parents' insurance at 26 and could not afford their own supply. The phrase refers to the age at which parental coverage ends under the Affordable Care Act. For some patients, it marked the beginning of rationing. For others, it was the end.
The $35 Cap
The Inflation Reduction Act of 2022 capped insulin copays at $35 per month for Medicare Part D enrollees, effective January 1, 2023. The law also eliminated the Part D deductible for insulin. Approximately 3.4 million Medicare beneficiaries who use insulin are covered. For more on what the IRA changed, see Medicare drug price negotiation.
The cap does not apply to patients with private insurance. It does not apply to the uninsured. It does not cap the underlying price of insulin. Insurers and PBMs still negotiate based on list prices. The $35 cap shifted who pays above $35, not whether someone pays above $35.
States moved to fill the gap. By April 2024, 25 states plus the District of Columbia had enacted their own insulin copay caps, ranging from $25 to $100 per month depending on the state. Coverage varies. Not all state caps apply to all plan types.
Manufacturer Price Cuts and the Real Driver
In March 2023, all three manufacturers announced major list price reductions within weeks of each other. Eli Lilly cut prices by 70% on its most prescribed insulins. Novo Nordisk cut NovoLog by 75%. Sanofi cut Lantus by 78%.
The announcements were framed as voluntary responses to patient need. The actual driver was a provision in the American Rescue Plan Act (ARPA) of 2021 that removed the Medicaid rebate cap, effective January 2024. Under the old rules, manufacturer rebates to Medicaid were capped at 100% of the Average Manufacturer Price. With the cap removed, manufacturers whose list prices had risen far above their actual value would owe rebates exceeding the drug's price. They would effectively pay Medicaid to dispense their products.
Eli Lilly faced an estimated $430 million in additional rebate exposure. Novo Nordisk faced $350 million. Cutting list prices before the new rule took effect was the rational financial decision. The public framing of generosity obscured a regulatory forcing function.
The results were real regardless of the motivation. The average price per insulin unit dropped 42%, from $0.33 in 2019 to $0.19 by mid-2024. That is the lowest per-unit price in a decade.
Biosimilars and Public Alternatives
Biosimilar insulin has been slow to reach the US market. The first interchangeable insulin biosimilar, Semglee, was approved in July 2021. Merilog, a Humalog biosimilar, followed in February 2025. Kirsty, a NovoLog biosimilar, was approved in July 2025. By the end of 2025, the FDA had approved 25 interchangeable biosimilars, 18 of them in that year alone.
The delay was not accidental. Manufacturers used extensive patent strategies to block competition. Lantus accumulated 74 patents and maintained market protection for 32.9 years. NovoLog held protection for 32.3 years. The median insulin product maintained 16 years of market protection beyond initial approval. Two-thirds of the last-to-expire patents covered delivery devices, not the insulin molecule itself.
Public alternatives have begun to appear. California's CalRx program will offer insulin glargine pens at $11 per pen or $55 for a five-pack starting January 2026. Civica Rx, a nonprofit manufacturer, distributes affordable insulin formulations nationwide. These are early steps. They do not yet operate at the scale needed to shift market pricing. For more on patient access options, see drug affordability programs.
What Remains Broken
The price cuts and the $35 cap were real improvements. They were also incomplete. Several structural problems persist.
Rationing has not decreased. The 2024 Yale follow-up found rates identical to 2017. Lower list prices have not translated into fewer patients skipping doses. The gap between price reductions and patient behavior suggests that cost is not the only barrier. Insurance design, pharmacy access, and out-of-pocket structures all play a role.
No private insurance cap exists at the federal level. The $35 cap applies only to Medicare Part D. Commercially insured patients and the uninsured have no equivalent federal protection.
PBM incentives remain intact. The rebate structure that inflated list prices for decades has not been fundamentally reformed. PBMs still profit from the spread between list and net prices. The gross-to-net bubble was deflated by manufacturer price cuts, not by structural change.
Biosimilar uptake faces barriers. Pharmacy-level substitution rules vary by state. PBM formulary decisions can favor branded products that offer larger rebates. Physician and patient inertia slows switching. Cost Plus Drugs, one of the most visible transparency pharmacies, does not offer insulin.
GLP-1 pricing echoes the pattern. Ozempic, Mounjaro, and other GLP-1 receptor agonists for diabetes and weight management face similar pricing dynamics: high list prices, concentrated manufacturers, growing patient demand, and access barriers. They have been widely described as the next insulin in terms of affordability crises. The structural conditions that produced the insulin pricing failure have not been dismantled. They are producing the next one.