When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting’s co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. They wanted everyone who needed their medication to be able to afford it.
Today, Banting and his colleagues would be spinning in their graves: Their drug, which many of the 30 million Americans with diabetes rely on, has become the poster child for pharmaceutical price gouging.
The cost of the four most popular types of insulin has tripled over the past decade, and the out-of-pocket prescription costs patients now face have doubled. By 2016, the average price per month rose to $450 — and costs continue to rise, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses.
Members of Congress have been pressuring drug companies and pharmacy benefit managers to bring insulin costs under control — and there have been several promising moves. In May, Colorado took the unusual step of capping the price of insulin in the state: A new law says people with diabetes won’t have to shell out more than $100 per monthly copay for the drug, regardless of how much they use. The state’s attorney general will also investigate rising insulin prices and make recommendations for other legislative changes.
Before that, the insurance behemoth Cigna, and its pharmacy benefit arm Express Scripts, announced a program that’ll cap the 30-day cost of insulin at $25. That’s a 40 percent reduction from the $41.50-per-month fee people with Express Scripts benefits were paying in 2018. The program is also expected to launch later this year for insurance plans that work with Express Scripts benefits. And by next year, all diabetes patients on Cigna plans will be able to join, according to the Washington Post.
Federal fixes to reduce insulin prices have also been proposed — like the Affordable Drug Manufacturing Act, introduced by Senator Elizabeth Warren (D-MA) and Representative Jan Schakowsky (D-IL). It would have, among other things, allowed the federal government to manufacture drugs or hire an outside contractor, and set fair prices for essential medicines, such as insulin. But the bill didn’t go anywhere.
While these measures suggest the problem of insulin price gouging is finally being tackled, there are several catches to consider. Colorado is just one state, and people with diabetes live in every state in America. The cap also only applies to people who have health insurance coverage. As for Cigna’s plan, patients can only participate if their employers opt into the change in plan, Stat reported. Cigna is just one of many insurance companies out there, covering less than 1 percent of the 23 million living with diabetes in America. And new federal laws haven’t passed.
“As solutions to the insulin-cost crisis are being considered,” a new New England Journal of Medicine editorial argues, “there is value in remembering that when the patent for insulin was first drafted in 1923, Banting and Macleod declined to be named on it. Both felt that insulin belonged to the public. Now, nearly 100 years later, insulin is inaccessible to thousands of Americans because of its high cost.”
Most patients with diabetes remain vulnerable to the whims of drug company pricing, since companies can still set whatever prices they wish. And no drug is better for understanding how that happened than insulin.
How the companies justify their price increases
With Type 1 diabetes, which affects about 5 percent of people with diabetes in the US, the immune system attacks the insulin-producing cells in the pancreas, leaving the body with little or none of the hormone. In Type 2 diabetes, the pancreas still makes insulin, but the body has grown resistant to its effects. In both cases, patients rely on insulin medication to keep energy from food flowing into their bodies.
The US is a global outlier on money spent on the drug, representing only 15 percent of the global insulin market and generating almost half of the pharmaceutical industry’s insulin revenue. According to a recent study in JAMA Internal Medicine, in the 1990s Medicaid paid between $2.36 and $4.43 per unit of insulin; by 2014, those prices more than tripled, depending on the formulation.
:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/8500453/ioi150073f1.png "The absurdly high cost of insulin, explained (1)")
The doctors and researchers who study insulin say it is yet another example — along with EpiPens and decades-old generic drugs — of companies raising the cost of their products because of the lax regulatory environment around drug pricing. “They are doing it because they can,” Jing Luo, a researcher at Brigham and Women’s Hospital, told Vox in 2017, “and it’s scary because it happens in all kinds of different drugs and drug classes.”
In countries with single-payer health systems, governments exert much more influence over the entire health care process.
In England, for example, the government has an agency that negotiates directly with pharmaceutical companies. The government sets a maximum price it will pay for a drug, and if companies don’t agree, they simply lose out on the entire market. This puts drugmakers at a disadvantage, driving down the price of drugs.
The US doesn’t do that. Instead, America has long taken a free market approach to pharmaceuticals.
Drug companies haggle separately over drug prices with a variety of private insurers across the country. Meanwhile, Medicare, the government health program for those over age 65 — it’s also the nation’s largest buyer of drugs — is barred from negotiating drug prices.
That gives pharma more leverage, and it leads to the kind of price surges we’ve seen with EpiPens, recent opioid antidotes — and insulin.
Insulin manufacturers say the increases are just the price tag that comes with innovation — creating more effective insulin formulations for patients.
According to a 2017 Lancet paper on insulin price increases, “Older insulins have been successively replaced with newer, incrementally improved products covered by numerous additional patents.” The result is that more than 90 percent of privately insured patients with Type 2 diabetes in America are prescribed the latest and costliest versions of insulin.
But soaring prices for these newer formulations is out of step with how much they improve treatment for patients, said Yale endocrinologist Kasia Lipska. For Type 1 diabetes, newer formulations appear to be more effective at controlling blood sugar than older formulations. “For Type 2 diabetes, it’s less clear — the benefits are not as strong.”
So, Lipska asked, “Are [the new insulins] 20 times better? I’m not sure.”
Luo, the Lancet paper’s lead author, doesn’t find the “cost of innovation” argument very convincing. In his research, he’s come across many examples of the same insulin products that have been continuously available for years without improvements, yet their price tags have gone up at a much higher rate than inflation.
“The list price of these products are already out of reach for most Americans living with diabetes — in some cases, over $300 a vial,” he said. “It is also strange to see Humulin still priced at over $150 a vial considering this product was first sold in the US in 1982.”
Drugmakers do this because they can
So insulin’s drug pricing problem is much bigger than anything one state — or drug company — alone can fix. But more changes in the market may be on the horizon.
The three major insulin makers — Eli Lilly, Novo Nordisk, and Sanofi — testified before the House Energy and Commerce’s oversight subcommittee last April, focusing more attention on the issue. Lawmakers, including Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR), have also been investigating the problem and sending letters to drug companies asking them to account for their outrageous price hikes.
But while the pressure around insulin may be mounting, we’re also seeing the terrible impact of rising insulin prices on patients: people being forced to taper off insulin so they can pay their medical bills, and winding up with kidney failure, blindness, or even death.
Some are forced to head to Canada, where drug prices are more heavily regulated and, according to the new NEJM editorial, where a carton of insulin costs $20 instead of the $300 patients often pay in the US. “Of course, there isn’t enough insulin in all of Canada to make large-scale importation feasible,” the editorial authors wrote.
One real solution to the problem, however, would be to bring a generic version of insulin to the market. There are currently no true generic options available (though there are several rebranded and biosimilar insulins). This is in part because companies have made those incremental improvements to insulin products, which has allowed them to keep their formulations under patent, and because older insulin formulations have fallen out of fashion.
But not all insulins are patent-protected. For example, none of Eli Lilly’s insulins are, according to the drugmaker. In those cases, Luo said, potential manufacturers may be deterred by secondary patents on non-active ingredients in insulins or on associated devices (such as insulin delivery pens).
There’s also “extreme regulatory complexity” around bringing follow-on generic insulins to market, Luo added. And that’s something regulators, such as the Food and Drug Administration, have been working to streamline. History has shown that their efforts are worthwhile: When cheaper generic options are introduced to the market, overall drug prices come down. A century after insulin was discovered, it’s about time we had one.
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FAQs
Why did Frederick Banting sell insulin for $1? ›
When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting's co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1.
Why does the US charge so much for insulin? ›The high cost can be attributed in part to “evergreening,” a process in which drug companies make incremental improvements to their products that can extend the life of their patents, said Dr. Kevin Riggs, a physician at the University of Alabama at Birmingham Heersink School of Medicine.
What's the cost of insulin? ›| Insulin | Average price per insulin unit |
|---|---|
| Humulin N (10 mL vial; 100 iU/mL) | $0.22 |
| Humulin N KwikPen (3 mL; 100 iU/mL) | $0.39 |
| Humulin R KwikPen (3 mL; 500 iU/mL) | $0.24 |
| Humulin R vial (10 mL; 100 iU/mL) | $0.19 |
The average American insulin user spent $3490 on insulin in 2018 compared with $725 among Canadians. Over the study period, the average cost per unit of insulin in the United States increased by 10.3% compared with only 0.01% in Canada.
How did diabetics survive before insulin? ›Before insulin was discovered in 1921, people with diabetes didn't live for long; there wasn't much doctors could do for them. The most effective treatment was to put patients with diabetes on very strict diets with minimal carbohydrate intake. This could buy patients a few extra years but couldn't save them.
Is insulin free in Canada? ›Canadians pay approximately $35+ per vial of insulin. The amount of insulin required varies depending on each individual's metabolic needs, blood glucose levels, and the type of insulin administered.
Who jacked up the price of insulin? ›...
| Martin Shkreli | |
|---|---|
| Known for | Turing Pharmaceuticals, Retrophin, Daraprim price hike |
| Criminal status | Released |
The increase in insulin expenditures may be attributed to several factors: the shift from inexpensive beef and pork insulins to more expensive genetically engineered human insulins and insulin analogs, dramatic price increases for the available insulins, physician prescribing practices, policies that limit payers' ...
Who owns the patent on insulin? ›When inventor Frederick Banting discovered insulin in 1923, he refused to put his name on the patent. He felt it was unethical for a doctor to profit from a discovery that would save lives. Banting's co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1.
Is insulin expensive? ›The price varies. Some people on private insurance pay hundreds of dollars monthly for the drug. For most Medicare beneficiaries, the average out-of-pocket cost per insulin prescription was $54 in 2020 — an increase of nearly 40% since 2007, a study released last month by the Kaiser Family Foundation found.
What is the average monthly cost of insulin? ›
By 2016, the average price per month rose to $450 - and costs continue to rise, so much so that as many as one in four people with diabetes are now skimping on or skipping lifesaving doses. The list price of insulin has gone from about $20 per vial in 1996, when Humalog entered the market, to about $275 per vial today.
How do you get insulin if you can't afford it? ›- Walmart's ReliOn Insulin. Walmart carries over-the-counter insulin for $25 per vial. ...
- Community health centers. Community health centers often have sliding scale options that allow you to get affordable insulin. ...
- Pharmacy loyalty programs. ...
- Your insurance company. ...
- A doctor.
Insulin costs around the world
While average insulin prices in the U.S. clearly lead the OECD by a staggering margin, prices in low-income countries, middle-income countries, and underdeveloped countries (and in the case of Humalog, Switzerland) are often similarly high.
Put another way, in 2018 the average price per standard unit within the different types of insulin products in the U.S. ranged from $73 up to $119 — while other countries like Canada, the U.K. and Australia charged less than $10 per unit.
How much more expensive is insulin in the US than Canada? ›The average American insulin user spent $3490 on insulin in 2018 compared with $725 among Canadians. Over the study period, the average cost per unit of insulin in the United States increased by 10.3% compared with only 0.01% in Canada.
How long can a diabetic go without insulin? ›In the worst-case scenario, just how long would we be able to hang on without it? Conventional wisdom says the answer is roughly 3 to 4 days.
Can Type 2 diabetics live without insulin? ›In some cases, people with type 2 diabetes need insulin injections to manage their blood sugar levels. For others, type 2 diabetes can be managed without insulin.
Can starving lower blood sugar? ›If you don't eat, your blood sugar levels are lower and medication may drop them even more, which can lead to hypoglycemia. Hypoglycemia can cause you to feel shaky, pass out, or even go into a coma. When you “break” your fast by eating, you may also be more likely to develop too-high blood sugar levels.
Can diabetics get disability? ›Diabetes is listed in the Social Security Administration's (SSA) impairment listing manual, or “Blue Book,” as a condition which can qualify a person for Social Security Disability benefits.
How much disability do you get for diabetes? ›It will rate your diabetes as 10 percent disabling if you can manage it with diet alone. You will receive a 100 percent disability rating if you require insulin more than once a day. You can also receive ratings of 20, 40, or 60 percent.
Is diabetes a disability? ›
Specifically, federal laws, such as the Americans with Disabilities Act and the Rehabilitation Act, protect qualified individuals with a disability. Since 2009, amendments and regulations for these laws make clear that diabetes is a disability since it substantially limits the function of the endocrine system.
Why is insulin not generic? ›It costs a lot to copy insulin
By and large, it's more complicated and expensive to reproduce a biologic than to duplicate simpler medications like Advil for example, which has smaller molecules. This has discouraged competitors of the major insulin manufacturers from entering the market.
5 People with diabetes need insulin to survive and we need to do something now to improve access to this life-saving medicine. This legislation would cap out-of-pocket costs of insulin products at $35 per month for people with private health plans and Medicare Part D plans, including Medicare Advantage drug plans.
How much do people spend on insulin? ›Among Medicare Part D Insulin Users without Low-income Subsidies, Average Annual Out-of-Pocket Spending Per Person on Insulin was $572 in 2020, and $54 Per Insulin Prescription.
Is insulin more expensive than metformin? ›Conclusion. Metformin is less costly than insulin for treatment of GDM; however, if women treated with metformin experience high failure rates, costs exceed that of insulin. Additionally, increased rates of PTB in the metformin treatment group make it a more costly alternative.
Why should insulin prices be lowered? ›“Some insurance companies have pharmacy deductibles, forcing patients to pay high amounts before their insulin is covered despite paying monthly premiums. This forces patients to ration insulin leading to unnecessary hospitalizations, complications, and even death.”
Is diabetes the most expensive disease? ›Diabetes is the most expensive chronic condition in our nation. $1 out of every $4 in US health care costs is spent on caring for people with diabetes. $237 billion‡(c) is spent each year on direct medical costs and another $90 billion‡(c) on reduced productivity.
Who is the biggest supplier of insulin? ›| Company | Global Market Share (by Volume) | Global Market Share (by Revenue) |
|---|---|---|
| Novo Nordisk | 52% | 41% |
| Sanofi | 17% | 32% |
| Eli Lilly | 23% | 23% |
Insulin Manufacturers and Products
There are 3 primary insulin manufacturers in the U.S. market—Eli Lilly, Novo Nordisk, and Sanofi—that represent over 90 percent of the global insulin market and produce almost 100 percent of the insulin supply in the United States.
| Country | Number of countries/territories to which insulin exported | |
|---|---|---|
| Countries where 'big three'* produce insulin | Denmark† | 136 |
| France‡ | 115 | |
| USA‡ | 88 | |
| Germany† | 121 | |
Who sold the insulin patent for $1? ›
Chemist James Collip worked with Banting and Best to purify and refine insulin for clinical trials in humans. On January 23rd, 1923 Banting, Best, and Collip were awarded the American patents for insulin. They sold the patent to the University of Toronto for $1 each.
How much did Banting sell insulin for? ›Banting's co-inventors, James Collip and Charles Best, sold the insulin patent to the University of Toronto for a mere $1. They wanted everyone who needed their medication to be able to afford it.
Who jacked up the price of insulin? ›...
| Martin Shkreli | |
|---|---|
| Known for | Turing Pharmaceuticals, Retrophin, Daraprim price hike |
| Criminal status | Released |
On January 23rd, 1923 Banting, Best, and Collip were awarded the American patents for insulin which they sold to the University of Toronto for $1.00 each.
Why is insulin not generic? ›It costs a lot to copy insulin
By and large, it's more complicated and expensive to reproduce a biologic than to duplicate simpler medications like Advil for example, which has smaller molecules. This has discouraged competitors of the major insulin manufacturers from entering the market.
5 People with diabetes need insulin to survive and we need to do something now to improve access to this life-saving medicine. This legislation would cap out-of-pocket costs of insulin products at $35 per month for people with private health plans and Medicare Part D plans, including Medicare Advantage drug plans.
How much does it cost to produce a vial of insulin? ›“Insulin costs about $10 a vial to make, that's what it costs the — the pharmaceutical company," Biden said, "But drug companies charge families... up to 30 times that amount.”
Why should insulin prices be lowered? ›“Some insurance companies have pharmacy deductibles, forcing patients to pay high amounts before their insulin is covered despite paying monthly premiums. This forces patients to ration insulin leading to unnecessary hospitalizations, complications, and even death.”
How much do people spend on insulin? ›Among Medicare Part D Insulin Users without Low-income Subsidies, Average Annual Out-of-Pocket Spending Per Person on Insulin was $572 in 2020, and $54 Per Insulin Prescription.
How long does a vial of insulin last? ›Opened vials, whether or not refrigerated, must be used within 28 days. They must be discarded if not used within 28 days. If refrigeration is not possible, the open vial in use can be kept unrefrigerated for up to 28 days in a place away from direct heat and light, as long as the temperature is not >86°F (30°C).
Who owns the patent for insulin? ›
Four companies, Eli Lilly, Sanofi, Novo Nordisk, and Pfizer, own these patents.
Who owns insulin? ›The insulin market in the United States is highly concentrated. Only three companies—Novo Nordisk, Sanofi, and Eli Lilly—supply insulin to patients in the United States. These three companies are commonly called the 'Big Three' because they control over 90 per cent of the global insulin market.
What is insulin made of? ›Insulin is a protein composed of two chains, an A chain (with 21 amino acids) and a B chain (with 30 amino acids), which are linked together by sulfur atoms. Insulin is derived from a 74-amino-acid prohormone molecule called proinsulin.
How has insulin benefited society? ›Arguably one of Canada's greatest contributions in the area of medical research, the discovery of insulin completely transformed the treatment of diabetes, saving millions of lives worldwide.
Which country invented insulin? ›On July 27, 1921, Canadian surgeon Frederick Banting and University of Toronto medical student Charles Best successfully isolated the hormone insulin for the first time.
How much did the patent for insulin cost? ›In 1921, scientists in Canada discovered insulin. After winning the Nobel Prize, they sold the patent for $1 each, saying the hormone for battling diabetes “belongs to the world.”