PBMs Reduce Insulin Costs

PBMs work to drive down insulin costs using formulary management and rebates.

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.

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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.

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


New IQVIA Data on Insulin

From IQVIA: The Use of Medicines in the U.S. 2022

The average final out-of-pocket costs on insulin for all patients DECREASED from $31.52 in 2018 to $22.88 in 2021.

Medicare patients paid under $35 out-of-pocket on insulin 74% of the time in 2021, while the commercially insured pay under $35 88% of the time.

Total out-of-pocket costs by patients with insulin prescriptions fell by $500 million since 2018.


Medicare average final out-of-pocket costs on insulin decreased from $30.80 to $21.02.


Commercial average final out-of-pocket costs on insulin decreased from $29.36 to $23.19.

Young woman injecting insulin with insulin pen.Home office during pandemic concept
Insulin (1)

PBMs Reduce Insulin Costs for Patients


$54 B

Total gross sales for drug manufacturers increased from $22 billion in 2012 to $54 billion in 2019.

$13 B

Despite climbing gross drug costs, PBMs held total net sales to $13 billion in 2012 and 2019.

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

Reducing or Eliminating OOP Costs

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

Adding Insulin to Preventative Drug List (PDL)

Partnering with health plans to offer insulin with no cost sharing before meeting the deductible of high-deductible health plans and health savings accounts.

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.

Artificial Manufacturer Barriers to Competition Lead to High Insulin Prices

With only three main manufacturers of insulin, competition has been limited leading to price increases.
Those three main manufacturers own several insulins.  And the list prices for those same-class insulins increase in lockstep.

Impacts of Limited Insulin Competition

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:

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.

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.


  • 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.