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Why is insulin so expensive?

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Pharmaceutical companiesInsurance companiesGovernment policySupportSummary
Several factors can make insulin expensive, such as its production cost, little competition between pharmaceutical companies, and limited insurance coverage.
Medically reviewed by Debra Sullivan, Ph.D., MSN, R.N., CNE, COI
Updated on November 29, 2023

Many people in the United States don’t have access to insulin or have difficulty affording this vital medication for treating diabetes. The cost has risen in recent years due to several factors.

While pharmaceutical companies play an essential role in determining the price of insulin, not all insurance policies cover the cost.

Many policies don’t offer any protection for people with diabetes or only partially cover the costs people encounter when buying insulin.

How do pharmaceutical companies decide the price of insulin?

Adult female sitting at a long laid wooden kitchen table with breakfast stuffs and diabetes medication as she wonders why is insulin so expensive?
Photography by Maskot/Getty Images

There are three multinational pharmaceutical companies that manufacture insulin and dominate the global insulin market. Together, Novo Nordisk, Sanofi, and Eli Lilly control 99% of the market by value and 96% of the total market volume.

This allows them to make agreements with each other and decide on insulin prices without facing much competition. As they are for-profit organizations, pharmaceutical companies choose the cost of insulin as a business decision.

Over the years, pharmaceutical companies also began increasing the use of more expensive insulin analogs instead of human or animal insulins. This has caused a further rise in insulin prices, making it less affordable for people with diabetes.

How do insurance companies decide the price of insulin?

Health insurance companies may pay a portion of the insulin cost. However, this depends on your policy. Certain insurance plans may not contribute toward prescription medications, like insulin, or only contribute a minimal amount to cover part of the cost.

Insurance policies are involved in the cost-sharing of medications with their policyholders and also receive rebates from pharmaceutical companies via figures called Pharmacy Benefit Managers (PBMs). These figures negotiate the prices of medications, such as insulin, between insurance companies and pharmaceutical companies.

PBMs then take a share of the profits from the prescription medications that policyholders buy through their insurance company. While many consumers are unaware of PBMs, they can drive up the costs of prescriptions to get higher profits.

How does government policy affect the price of insulin?

The U.S. government regulates Food and Drug Administration (FDA) approvals for drugs, medical devices, and pharmaceutical patents. However, it is not currently involved in pricing regulation.

Patents are valid for a set period, typically 20 years, and are key to keeping the prices of drugs high. Their patents must expire before other competitors can produce a generic version of any given medication. Once a patent expires, several generic versions become available at lower prices than their brand-name equivalents.

If a medication changes its formula, pharmaceutical companies can ask for a patent renewal, which further delays the release of generic alternatives. When insulin patents receive multiple renewals, prices continue to rise as no other generics on the market can compete with brand-name medications.

Due to a lawsuit, biosimilar insulins — drugs with different chemical formulas from insulin but that have the same effect on the body — are now unavailable in the United States.

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What support is available to help you afford your insulin?

The U.S. government can sometimes act as an insurance company to help some people via certain programs, such as Medicaid and Medicare. Eligible people can include individuals with financial needs, older adults, and those with a disability.

These federal programs can help low income families and older adults with specific medical conditions access medications and other healthcare.

Discount cards can also help lower the cost of insulin and provide more competitive pricing and cost reductions.

The free Optum Perks Discount Card can help you save up to 80% on thousands of FDA-approved medications. For example, blood pressure medication such as atorvastatin (Lipitor) can retail for around $36. However, a free Optum Perks Discount Card can reduce the price to $9.87, saving you 72%.


Insulin prices can increase due to several factors, and pharmaceutical companies play an important role in establishing these costs. This is because their patents for insulin medications prevent other competitors from producing generic versions that would have the same effect and be sensibly cheaper.

Insurance policies may cover the cost of insulin, but in many cases, they don’t cover or only partially cover the cost of insulin.

People who have a disability, older adults, and families with a low income can get support from federal programs to help cover the cost of their medications, such as Medicare and Medicaid.

Download the free Optum Perks Discount Card to save up to 80% on some prescription medications.

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