Insulin Prices Could Be Much Lower
Insulin prices could be much lower and drug makers would still make healthy profits
As prices for diabetes treatments continue to roil consumers, a new study suggests that manufacturers could make both human and analog insulins at low costs and still pocket a profit.
After analyzing expenses for ingredients, production, and delivery, among other things, the researchers contend that the price for a year's supply of human insulin could be to a person and between and 3 for analog insulins, which are genetically altered forms that are known as rapid or long-acting treatments. Examples of analog insulins include Humalog, Lantus, and Novolog.
Put another way, the study estimated the cost of production for a vial of human insulin is between .28 and .42, while the production cost for a vial of most analog insulins is between .69 and .16, according to the study in BMJ Global Health.
Meanwhile, the median prices paid by more than two dozen countries for human insulin were 1.2 to 1.8 times greater than estimated prices. Median prices for other types of insulin were also higher: Lantus, which is sold by Sanofi (), was 5.6 to 7.8 times higher; Humalog, which is sold by Eli Lilly ( were at 2.7 to 3.7 times higher; and Novolog, a Novo Nordisk () treatment, was 2.6 to 3.5 times greater.
The study authors, who cited a 2019 study that examined government procurement prices paid and other data, argued their findings suggest greater competition would lead to sizable savings in most countries. They also maintain that existing insulin makers could set "significantly lower prices while still making a profit," but they concede more companies would have to enter the market for this to occur.
"Anyone with Type 1 diabetes should be able to buy insulin for under 0 per year, including the long-acting forms," said Andrew Hill, a study co-author and senior visiting research fellow at the University of Liverpool. "Pharmaceutical companies cannot justify charging governments 2 per person per year in the U.K. and ,251 in the U.S., let alone similar amounts in low- and middle-income countries."
There were some limitations to the study, though. For instance, biosimilar manufacturing expenses were not individually considered, such as capital expenditures, quality assurance and control, registration costs, and costs for adhering to manufacturing regulations. But the authors insisted they made a conservative assumption for the total costs of bringing a biosimilar to market.
A Sanofi spokeswoman wrote us that the drug maker "shares concerns about the affordability of medicines and is focused on ensuring people who can benefit from our medicines have access to them. As the authors noted, there were several limitations to the analysis, including a large number of assumptions which makes it challenging to draw any conclusions."
[UPDATE: A Novo Nordisk spokesman sent us this: "We recognize that there are those who are having difficulty affording their medicine, including those made by us. We also appreciate the different perspectives across many stakeholders. The affordability of insulin for patients depends on health systems, regardless of country. Globally, We have preferential pricing for low income countries but we're aware that sometimes our medicines don't reach patients because of inefficiencies and supply chains. In the U.S., we offer human insulin through several channels for approximately /vial.
"This study presents only one facet of the cost of medicines - the manufacturing process. It's important to see the big picture and take a more holistic view including how the sales of the medicines fund broader R&D efforts for the next generation of medicines along with our manufacturing investments (such as our billion expansion in the U.S.) when assessing cost."]
We asked Lilly for comment and will update you accordingly.
The findings come amid ongoing controversy over the cost of diabetes treatments, which make an attractive target, given soaring prices.
A 2019 study in the Journal of the American Medical Association found the price for a milliliter of insulin climbed 197 percent from .34 per to .92 between 2002 and 2013. Two Washington lawmakers subsequently accused the three largest insulin makers — Lilly, Sanofi, and Novo Nordisk — of price collusion. The companies later publicly committed to limiting price hikes on their medicines.
Meanwhile, Nevada legislators made diabetes medicines the specific target of a transparency law that requires drug makers to report pricing histories, disclose costs, and notify state officials and insurers in advance of price hikes above inflation. The move was prompted by data showing high disease rates and the subsequent medical and economic costs to many states.
The study is likely to further embolden advocacy groups that have been trying to pressure drug makers to lower prices. In the U.S., T1 International and People of Faith for Access to Medicines are staging another demonstration this coming Sunday at Lilly headquarters in Indianapolis to protest insulin prices.
"It is unacceptable that governments and people are paying so much more than the cost of production for insulin. Estimating the cost of production for hepatitis C treatment was instrumental in getting dramatic price cuts. This needs to happen now for insulin," said Dr. Margaret Ewen, global pricing coordinator for Health Action International, a nonprofit advocacy group that backed the study.
Indeed, the same researchers have conducted similar studies suggesting that production costs for other types of medicines were sufficiently low enough that manufacturers could slash prices and still make reasonable profits to satisfy financial goals. This work was regularly cited by patient advocates who sought to pressure drug makers to lower their prices in order to widen access to treatment, especially in low-income countries.
In reaching their conclusions, the researchers used pricing data for active pharmaceutical ingredients exported from India and price quotes from insulin makers. When API pricing could not be obtained, prices were estimated based on comparison of similarity, in terms of manufacturing process, with APIs for which prices were available. Potential biosimilar prices were estimated by adding costs of excipients, formulation, transport, development and regulatory costs, and a profit margin.
Video: Insulin Prices Could Be Much Lower
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