A Look Behind the US Debate Over Insulin Prices

Ron Lanton III, Esq., has over 25 years of experience in government affairs at the municipal, state, and federal government levels, with 15 years dedicated to the healthcare sector. He is a regulatory attorney and government affairs professional who frequently consults Wall Street firms on financial issues related to the healthcare sector. Lanton is a featured industry speaker on issues such as pharmaceutical safety and healthcare cost containment, and he has authored numerous articles regarding pharmacy and healthcare law. He earned a BA from Miami University and a JD from The Ohio State University. He is also the chair of the Biologics Committee for the New York Bar Association.

May 06, 2019
As the drug price debate grows in momentum, we are now starting to hear more about the spike in the costs of insulin. Why? According to the CDC, more than 100 million US adults are now living with diabetes or prediabetes. Each year, 1.4 million Americans are diagnosed with diabetes, while approximately 6 million Americans with diabetes use a form of insulin. With so many people impacted by the growing prevalence of the chronic disease, insulin has become a trending topic in the discussion about high drug costs.

One main reason for increasing insulin prices is rebates. During the April 10, 2019 United States House Energy and Commerce Committee hearing titled “Priced Out of a Lifesaving Drug: getting Answers on the Rising Cost of Insulin” manufacturers, pharmacy benefit managers (PBMs), and congressional representatives discussed the effects rebates were having on prices. Currently, manufacturers pay rebates to health plans or PBMs in exchange for formulary access, which is a major reason we see manufacturer net pricing declining but list prices increasing.

Thus far, Congress has been active with insulin pricing. In addition to the Congressional Diabetes Caucus’ 2018 Report on Insulin, Congress has 2 bills on point: the Affordable Insulin Act of 2019 proposes to allow for the importation of affordable and safe insulin by wholesale distributors, pharmacies, and individuals, while the Insulin Access for All Act of 2019 proposes to eliminate cost sharing with respect to coverage of insulin as a covered Medicare Part D drug or as a covered outpatient drug under the Medicaid program.

These bills follow in the footsteps of Nevada’s trendsetting approach to drug price transparency. In 2017, the state’s first-in-the-nation insulin price transparency law targeted diabetes products and required PBMs and manufacturers to disclose pricing and rebate information, among other things. In 2018, the manufacturing lobby dropped its legal opposition to the law, as it stated that Nevada’s adopted regulations resolved outstanding concerns.  

The FDA, which has been taking an aggressive approach in attempting to lower drug costs, has also weighed in on the insulin debate. Former Commissioner Scott Gottlieb, MD, stated in response to the statutory mandate of the Biologics Price Competition and Innovation Act that “Starting in March 2020, the approved marketing applications for the small subset of ‘biological products’ such as insulin and human growth hormone...will be deemed to be biologics. Once an interchangeable insulin product is approved and available on the market, it can then be substituted for the reference product at the pharmacy, potentially leading to increased access and significantly lower costs for patients.”

Lastly, anticipating the growing need for insulin biosimilars, Sandoz has offered a solution of its own to higher insulin prices. In December 2018, the company announced its agreement with Chinese drug maker Gan and Lee to commercialize biosimilar insulins to treat patients with type 1 and type 2 diabetes. 

Hopefully the inclusion of insulin via an FDA established biosimilar pathway will create a healthier marketplace by lowering insulin prices and improving both patient outcomes and access.


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