Novo Nordisk Joins Eli Lilly in Reducing Insulin List Prices—Here’s Everything You Need To Know
Melissa Bell was 18 and going off to college when she was diagnosed with type 1 diabetes. As scary as that was, she was one of the lucky ones: She had health insurance that shaved hundreds of dollars off the monthly cost of insulin, a drug she needed to stay alive. Still, in 2022, she had $10,000 in medical expenses, including insulin at $280 a vial (which lasts for about a month).
According to GoodRx, the price of insulin in the U.S. skyrocketed from 2014 to 2019 by around 54 percent. One month’s supply can cost hundreds of dollars.
So it was with great fanfare that earlier this month Eli Lilly and Company, the first company to manufacture insulin more than 100 years ago, announced a significant price drop for some of its insulin products. Novo Nordisk, Inc followed suit last week with a plan to decrease some of its insulin prices by 75 percent in 2024.
While a great start, is this enough to save the lives of everyone who needs it? Not so much, according to patients and diabetes advocates.
The high cost of diabetes
Insulin moves sugar from your bloodstream into your cells. There it is used as energy, or stored for future use. People with type 1, type 2, and gestational diabetes don’t make enough insulin, or use it efficiently. This causes blood glucose (sugar) levels to rise, which results in hyperglycemia and life-threatening complications, such as diabetic ketoacidosis.
Prior to these announcements from Lilly and Novo Nordisk, President Biden’s Inflation Reduction Act helped lower insulin costs for people on Medicare by instating a $35 cap on each month’s supply of the drug. But not everyone is on Medicare. Diabetics also shell out money for much more than this life-saving drug.
“The cost of having diabetes is not just about insulin,” says diabetes educator and Association of Diabetes Care & Education Specialists consultant, LaurieAnn Scher, MS, RD, CDCES. “People with diabetes also pay for strips, glucose meters, infusion sets, and a host of other medical necessities.”
You also have to factor in doctor appointments and ongoing laboratory testing. Without testing, getting a prescription for insulin is legally impossible. This places an astronomical burden on diabetics and their families, particularly people with high deductibles or without insurance.
How insulin got so expensive
Insulin was first discovered in 1921. So why is it still so expensive? The reason may have more to do with the goal of extending the life of patents, rather than patients.
Evergreening, a common practice used by Big Pharma in the U.S., refers to alterations in products, such as insulin, that increase the longevity of the patents they hold. These alterations are often small. They typically result in medication or drug delivery improvements, which is a good thing. They also, unfortunately, reduce competition by discouraging drug development by competing or small pharmaceutical firms, enabling costs to skyrocket.
A complicated supply chain consisting of pharmaceutical companies, pharmacies, and healthcare plans, coupled with a lack of transparency about development and manufacturing costs, has compounded the issue, and dramatically affected the price consumers pay for insulin and other drugs.
The price of insulin in the U.S. vs. the rest of the world
The Food & Drug Administration has no legal authority to regulate or investigate drug pricing by pharmaceutical companies, distributors, or pharmacies. In this country, drug companies are free to set their own list prices. Health insurers and pharmacies determine the out-of-pocket costs they’ll charge for these drugs, based on the list price.
The cost of prescription drugs, including insulin, is significantly higher in the U.S. than in other countries. Research and development play a role, but so does an intense devotion to high-profit margins.
A 2022 study published in Mayo Clinic Proceedings found that insulin costs the average U.S. insulin user $3,490 a year, as opposed to the average Canadian, who spent $725 for the same drug in 2018. This study also found that the average cost per unit for insulin in the U.S. increased by 10.3 percent from 2016 to 2019, but only increased by 0.01 percent in Canada, during that same timeframe.
Why? Scher thinks a broken system is to blame.
"We need to be able to do research without putting it on the backs of the people who need it." —diabetes educator LauriAnn Scher
“Doing research for new medications costs money. But these costs are passed onto the consumer," Scher says. "We need to be able to do research without putting it on the backs of the people who need it. Universities that fund research typically fold those costs into high tuition. Pharmaceutical companies and others in the supply chain make huge profits. It just doesn’t work anymore."
The ones left behind
Lilly and Novo Nordisk did not promise to lower the cost of every type of insulin they manufacture. Yet different people require different types of insulin.
Type 1 diabetics, like Stacey Bollinger’s 12-year-old daughter, are fully dependent on two types of insulin: long-lasting and fast-acting. “As many in the type 1 community will share, overgeneralizations about simply buying insulin at Walmart or Costco for cost-saving purposes, while good-intentioned, greatly overshadows the hugely important fact that type 1 diabetics often have to use a particular brand or formulation of insulin, because of how the disease personally manifests in them,” Bollinger explains.
Like most people with diabetes, Melissa Bell still worries about insulin cost and access. In 2023 she changed insurers as well as her state of residence, enabling her to get insulin for less. But not everyone is so lucky.
Those without health insurance, as well as people with high-deductible plans, typically suffer the most, often with disastrous results. This includes lower-income families, unhoused and undocumented people, and thousands of others who are simply doing their best to get by.
“It’s not unfamiliar to read of families in the type 1 community mourning the loss of their type 1 young adult, who had to ration insulin because they could not afford it. To be clear, without insulin, a type 1 will die. It is a direct reflection of the healthcare inequity, access, and approach that this occurs,” says Bollinger. As a parent, this understandably terrifies her.
People got loud, and guess what? Costs went down
Bollinger is grateful to see manufacturers changing their behavior, but it is not lost on her family that the price of insulin didn't budge until they received negative political and media attention. Bell agrees. She feels that it was political pressure and the power of social media, not altruism, that were the true motivators behind the cost reductions by Lilly and Novo Nordisk.
“When news of the copay cap occurred, the pharmaceutical manufacturers knew things were changing. They saw people demanding it. I believe that the companies and the people who work there are dedicated to diabetes, and have a deep connection to the disease. But they also saw that the headwinds had shifted. We’ve been asking, begging for this for years,” says Scher.
Before insulin was discovered, the only treatment for diabetes was starvation dieting. Clearly, we’ve come lightyears since then. But the moral of the story is this: If your drugs are too expensive, speak up. Medication costs in the U.S. are higher than they need to be. Whether it's insulin or another drug that you or your loved one needs, get loud about it. Join advocacy groups. Write letters to your elected officials and to those running for office. Show your outrage. Little by little, the power of people can and does have an impact.
Are you having trouble paying for insulin? The American Diabetes Association has compiled a list of resources and organizations that can help.
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