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Is the Cost of Insulin Sykrocketing?

By David Mendosa

Posted On: April 2001
Last Update: July 25, 2013

There is a perception among some people who have to use insulin to control their diabetes that its cost is skyrocketing. Specifically, they say that during the 1990s the cost of insulin increased dramatically.

Did it? The two pharmaceutical companies that sell insulin in the United States were obviously the first ones for us to ask. Neither one, however, would provide historical prices.

‘Insulin is a loss leader.’

Novo Nordisk acknowledged our repeated e-mail requests and voice messages but failed to respond. Eli Lilly and Company said that it had a policy of not providing historical sales or pricing data. That company did provide net wholesale prices and acknowledged that "Lilly has increased its price of insulin over the past ten years."

Lilly emphasized, however, that the price increase of Humalog was "to better align its clinical value with other diabetes agents (orals and insulins)." In addition, Lilly noted that the average daily cost of treating diabetes is in line with or below the cost of treating other chronic illnesses.

The net wholesale cost of a vial of Humalog is now $34.81, Lilly says. For a vial of Humulin it is $20.08.

But the absence of comparison data might lead one to think that there's a fire of raging cost increases below this smoke of non-responsiveness. The issue is particularly troublesome in light of the fact that Lilly technically has a monopoly on retail insulin sales in the United States.

Last year Lilly had an 84 percent share of the U.S. retail pharmacy market, according to IMS Health, the leading market research firm tracking the global pharmaceutical industry. Novo Nordisk had 16 percent.

The Sherman Anti-Trust Act of 1890 generally defines a monopoly as having market share of more than 80 percent. So Lilly certainly has been in a position to raise the price of its insulins substantially.

"A vial of [Lilly's] Humulin or [Novo's] Novolin is around $20 per vial as a cost to the pharmacist," says Dr. Keith Campbell, associate dean and professor of pharmacy practice at Washington State University College of Pharmacy and a Certified Diabetes Educator who himself has type 1 diabetes. "Ten years ago it was around $16. So 'skyrocketing' is an emotional term and certainly not a realistic term."

What may be triggering the perception of skyrocketing cost is the fact that "the cost of a vial of Humalog went up in the last year by about $5 per vial," he says. "It is sweeping the country as the insulin that takes care of postprandial blood sugars, which is the big emphasis now. It went from $30 to $34.73."

Current prices for Humulin and Humalog provided by Lilly and Campbell are very close. The Food and Drug Administration approved Humalog in 1996. At that time the wholesale cost was about $24, Campbell remembers. "So it has gone up more than the others, and part of that is because of demand."

But perhaps pharmacies are jacking up their prices? Campbell says no.

"Most pharmacies now charge general public about what they pay for the product," he says. "Insulin is a loss leader. The markup on chronic disease drugs is pretty low."

In fact, several on-line pharmacies charge even less. At press time you could buy a vial of Humulin for as little as $19.95 or a vial of Humalog for $30.95.

Data from IMS Health confirms Campbell's findings. However, they provided the number of prescriptions and retail sales only for each of the past six years.

Retail insulin sales in the United States increased steadily from $816 million in the year ended November 1995 to $1.3 billion in the year ended November 2000. That's a compound annual growth rate of 9.8 percent. However, the cost of living increased 2.5 percent, according to U.S. Bureau of Labor Statistics data. In real dollars, therefore, insulin sales increased 7.3 percent.

All those dollars spent buying insulin are, of course, coming from more insulin users too. How many more?

Simply dividing sales dollars by the number of prescriptions written might be misleading, IMS Health cautions. But comparing the 26 million prescriptions for the year ended November 2000 divided by that year's sales with the 25 million prescriptions written five years earlier divided by sales then shows an increase from $32.65 per prescription to $50.01. That is a compound annual increase of 8.9 percent of which 2.5 percent reflects the increased cost of living for a real increase of 6.4 percent.

Whichever way you calculate it, insulin does cost more nowadays. But it is not dramatically more. 

This article originally appeared in Diabetes Wellness Letter, April 2001, pp. 1, 7.

Comment by Paul Schmied, a reader of
Posted On: July 25, 2013

If you index insulin's price to inflation and compare apples to apples, the average cost in the US has actually dropped from 1978, when I started using it, to 2013.

I became overt type 1 back in 1978, and insulin wasn't coverd by my insurance. I remember paying approximately $25/vial for beef or pork NPH at Walgreens, and have an copy of my budget from 1978 where I budgeted $300/year for it. That price stayed relatively constant relative to inflation until newer insulins were introduced.

At the time I switched to human synthetic insulins in the 1980s, they cost about $30-35/vial - the same as NPH at that time. I switched to Novolog and lantus in the 2001's whn I got insurance that "covered" them. By 2008, when I was laid off and lost medical coverage, the co-pay had risen to $25/month. Atfer finding the street prices of Novolin and Lantus, I switched back to Human synthetic N and R from Walmart, under the supervison of my endocrinologist. The cost of Walmarts co-branded Lilly or Novo Relion Insulins has stayed pretty constant at $25/vial, compared to the street price of Lilly or Novo HSI of $40-50.

At $40-50/vial, in real dollars (adjusted for inflation), the cost of the basic insulin has dropped significantly. At Walmarts prices, it's a steal.

I do note that if the newer insulins and delivery systems are used, the cost of insulin use rises significantly, as much as 300% if you go by the VA's study, and based on that study, using them has no statistically significant benefit on outcomes. BTW, when I switched back to using the HSIs, my A1Cs improved (<6) slightly, probably because the cheaper BG monitor system I found ($0.12/test), combined with mail-in A1C testing, allowed me to increase testing frequency at a lower cost than my previous insurance co-pays.

Paul Schmied

PS: This 2010 snapshot study is relevant.

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