The insulin market is consolidated, hindering competition and limiting alternatives, leading to higher list prices on new and existing brand insulins. PBMs work hard to drive down costs using formulary management and rebates. Drug manufacturers have continued to increase insulin list prices, with total gross sales increasing from $22 billion in 2012 to $54 billion in 2019. Despite climbing gross drug costs, PBMs held total net sales to $13 billion in 2012 and 2019.


  • Limited competition in the insulin market driven by three factors: near total market control by only three manufacturers, manufacturer patent abuses, and a lack of alternative (generic and biosimilar) insulins.
  • PBMs drive down net costs through formulary management and negotiated rebates. Rebates create savings for PBM clients, and the largest rebates are for the insulins with the lowest average list price increases.
  • PBMs have kept average out-of-pocket (OOP) payments flat for beneficiaries with commercial insurance. For consumers whose OOP costs are still too high, PBMs have created innovative programs that limit OOP spending to promote affordable access as well as clinical programs that improve care and patient outcomes.

PBMs are creating innovative programs that limit consumer out-of-pocket insulin costs to promote affordable access, as well as clinical programs that improve care and patient outcomes.


Impacts of Limited Competition

Insulin price chart

List prices for same-class insulins increase in lockstep:

With only three main manufacturers of insulin, competition has been limited leading to price increases

new insulin prices rise chart

And, as new insulin products hit the market, launch prices increase.

Drug manufacturers rely on obtaining additional patents for their drug products to delay competition. These additional patents are often for incremental improvements such as delivery mechanisms (e.g., insulin pens).

The over-extension of patents cost the healthcare system an estimated $9 billion between 2010-2016:

us patent cost chart

When new manufacturers enter the market at a lower list price, PBMs use the competition to drive costs down.

How PBMs Create Savings

PBMs drive competition and pit manufacturers against each other to create savings:

  • The follow-on biologic insulin Basaglar (a biologic alternative to best-selling Lantus) shows that increasing competition is the key to bringing down insulin net costs.
  • Prior to Basaglar, Lantus was continuously increasing in both list price and net price (i.e., “net-of-rebate” price). After Basaglar introduction, the net price of Lantus decreased by almost 55%.
  • The future for insulin competition is bright: seven insulin competitor products from four new manufacturers are in the development pipeline.

No correlation between price increases and rebates on top insulin brands

  • Top insulins with lower average rebates had higher annual price growth.
  • Analysis across all top 200 drugs also shows no correlation between rebate levels and list price growth.
rebate and price correlation chart

Innovative PBM Programs Reduce Costs and Improve Outcomes

Median OOP costs on insulin for commercially insured patients remained flat, even as insulin list prices rose.

oop costs steady chart

While some patients still experience high out-of-pocket (OOP) costs, PBMs are developing innovative approaches aimed at ensuring affordable access.

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Reducing or Eliminating
OOP Costs

One PBM is eliminating OOP costs for all diabetic medications, including insulin, without raising plan costs, premiums, or deductibles.

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Adding Insulin to Preventative Drug List (PDL)

Partnering with health plans to offer insulin before meeting the deductible of high-deductible health plans and health savings accounts.

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Providing Diabetic Testing Supplies at No Cost

Helping people better manage their diabetes by eliminating the OOP costs associated with glucose meters and test strips.