Lessons From Insulin: Policy Prescriptions for Affordable Diabetes and Obesity Medications

In recent years, the issue of fair, equitable, and affordable pricing for medications used to treat diabetes and obesity has garnered increasing attention. The exorbitant price of insulin has led more than one in seven Americans with diabetes to ration their insulin, with detrimental effects on their health and well-being and, in some cases, loss of their very lives (1). The resultant widespread outcry, advocacy efforts, and public scrutiny have exposed critical shortcomings in the current pharmaceutical pricing model. Although efforts to address insulin affordability are still ongoing, some of the root causes of the problem are now more apparent. To address these causal factors, multiple policies have been proposed or implemented with the intent of curbing the high price of insulin. In this article, we examine these root causes, policy responses, and their implications for pricing of other diabetes and obesity medications.

Between the 1990s and mid-2010s, nearly a century after the discovery of insulin, insulin prices in the U.S. rose exponentially (2–4). For example, the list price for a single 10-mL U100 vial of Humalog rose from $26 in the 1990s to more than $300 by the mid-2010s, despite no difference in the actual product (2,5). Had prices risen at the rates of inflation alone, Humalog would be priced at less than $50 per vial (6). Similarly, by the mid-2010s the list prices for long-acting insulins had reached anywhere from $160 to $350 for a 10-mL vial (7). List prices are the starting point for rebates, fees, and discounts negotiated by pharmacy benefit managers (PBMs), insurers, and other entities in the insulin supply chain. Accordingly, list prices set by manufacturers do not necessarily reflect what insurers pay for insulin, or even what manufacturers collect in insulin sales.

Nevertheless, list prices are often associated with the ultimate payments patients make at the pharmacy counter (8). While some patients are sheltered from paying high list prices by having adequate insurance plans, many are not (3,9,10). Patients without insurance coverage, those whose insurance does not cover the specific insulin product, and those who are insured but in the deductible phase of their plan are typically responsible for paying the full list price out of pocket. Patients responsible for coinsurance are also responsible for a portion of the drug’s cost, which is typically based on the list price. As a result, list prices directly affect patient expenditures. As list prices have risen, reports of insulin rationing have become increasingly common (11–13) and associated deaths, particularly in young adults (14), have forced greater scrutiny including Congressional hearings of pharmaceutical company chief executive officers (15).

While the insulin affordability crisis has garnered particular attention, price-related barriers to diabetes treatment are not isolated to insulin. Increasing public frustration is mounting over affordability of other therapies, particularly glucagon-like peptide 1 receptor agonists (GLP-1 RA) and sodium–glucose cotransporter 2 inhibitors (SGLT2i). In the U.S., semaglutide and dulaglutide, two potent GLP-1 RA, currently carry list prices of approximately $1,000 for a 1-month supply (16). Empagliflozin and dapagliflozin, two SGLT2i, are priced at over $550 per month (17).

Despite emerging evidence that GLP-1 RA and SGLT2i not only control glycemic levels but also reduce weight and improve a range of health outcomes (18,19), they remain underused (20,21). Indeed, patients who are responsible for higher out-of-pocket payments are much less likely to start GLP-1 RA and SGLT2i compared with those with more generous insurance coverage (22). There are also disparities in use by race and ethnicity. Among Medicare beneficiaries, rates of initiation of SGLT2i and GLP-1 RA for individuals with comorbid cardiovascular or kidney disease are lower among Black and Hispanic beneficiaries compared with their white counterparts and rates of initiation are inversely correlated with socioeconomic status (23,24). Similar disparities are seen among non-Medicare populations in the U.S. (25,26).

Beyond their efficacy in T2D, many novel diabetes treatments are also beneficial in obesity treatment independent of dysglycemia. Semaglutide, for example, can lead to substantial weight loss and has been found to reduce the incidence of stroke, myocardial infarction, and cardiovascular disease–related death in individuals with obesity and preexisting cardiovascular disease but without diabetes (27). Given the current prevalence of obesity in the U.S. (28), ensuring Medicare coverage of GLP-1 RA such as semaglutide for obesity at current prices, however, may not be feasible. For example, assuming a prevalence of obesity of 41.5% among Medicare beneficiaries and semaglutide’s current net price after rebates and discounts of approximately $13,600 per year, full Medicare coverage of semaglutide for all its beneficiaries with obesity would cost 183% of Medicare Part D’s entire budget (29). If Medicare were to cover semaglutide for just 10% of beneficiaries with obesity, the projected cost to Medicare would still be on the order of $27 billion per year, representing nearly one-fifth of the total Medicare Part D budget (29). Medicare is currently banned from covering obesity pharmacotherapy by federal law, but there are strong lobbying efforts to overturn this (30). Coverage for obesity pharmacotherapy across Medicaid and private insurers is currently variable (31,32).

When insulin was first brought to market, the discoverers, Frederick Banting and colleagues, sought patent protection not because they were hoping to profit from the new drug but, rather, to protect it and help hasten safe and rapid delivery to as many people as possible. The patent allowed them oversight on who could produce the drug, preventing other potential manufacturers from creating a monopoly on production themselves. Banting and his colleagues sold their patent to the University of Toronto for safekeeping at the price of $1 each (33,34). Unable to meet the increasingly desperate demand for insulin, the university partnered with pharmaceutical companies to facilitate large-scale production. The first company they partnered with, Eli Lilly, agreed to manufacture and distribute the product free of charge for 1 year, after which they were permitted to sell the product for profit and patent any subsequent innovations they developed (35). Nordisk and Hoechst, which would later become Novo Nordisk and Sanofi, were also tasked with producing early supplies of insulin (36). These three companies have contributed to numerous innovations in insulin and continue to be the primary suppliers of insulin today.

Banting’s vision for insulin accessibility, however, has been foiled by modern health care infrastructure, particularly in the U.S. Unlike in a typical free market, consumers (patients) do not interface directly with sellers (manufacturers). There are numerous intermediaries involved in determining drug availability and pricing (Fig. 1). Most Americans are covered by insurance plans with formularies that dictate which drugs are preferred (associated with lowest out-of-pocket payments for patients) versus which drugs are discouraged from use (associated with higher out-of-pocket payments) or even excluded entirely (not covered by the plan). PBMs manage drug formularies on behalf of insurers and negotiate drug prices with manufacturers, using formulary placement as a bargaining chip (37). In return, PBMs receive rebates and other discounts from drug manufacturers. The rebates are not publicly disclosed but may amount to as much as 25%–60% of the gross sales of insulin (38). As a result, the list prices of insulin have risen even though the net prices, the amount after rebates and discounts are applied, remain substantially lower than list prices and have lower growth over time (39). Despite the role of rebates and discounts in lowering net prices, the widening gap between the list and net prices may exacerbate disparities in insulin affordability (10). This is because lower net prices do not benefit those who are under- or uninsured and who must shoulder either the full list price or a large proportion of the list price.

The current structure allows manufacturers, PBMs, insurers, and other entities to profit while list prices rise. PBMs profit from high list prices because the rebates that manufacturers pay the PBMs are calculated as a percentage of those list prices (37,40). In fact, PBMs—the very entities charged with reining in prices—have been particularly profitable, with the top three PBMs (which account for 79% of the market share [41]) bringing in tens of billions of dollars in revenue annually (42,43).

In contrast, this structure penalizes patients who are required to pay more out of pocket as list prices rise. Patients do not directly benefit from the negotiated rebates and discounts and do not experience the advantages of lower net prices negotiated by insurers and PBMs (10). For uninsured patients paying cash at the pharmacy counter and for insured patients in the deductible phase, the inflated list prices typically correlate closely with their out-of-pocket expenditures. In the case of insured patients who pay coinsurance, the list prices generally serve as the foundation for calculating patients’ out-of-pocket expenditures, so they too are paying more. This unchecked system of inflated list prices has seriously limited affordability of insulin for patients and has exposed them to out-of-pocket payments that are at times catastrophic (3).

In other countries, negotiations with manufacturers for drug prices are often handled by the government itself, which can typically garner a relatively low price, since the government is buying in bulk for the national population (44). As a result, in comparisons with other nations, insulin list prices in the U.S. are disproportionately high—frequently 10 times higher than what peer countries pay for the same product (45). Moreover, the excessively high prices Americans pay for medications, both directly and indirectly, are not unique to insulin. Prices for pharmaceuticals in the U.S. are on average 2.4 times higher than in peer nations, even in comparing the same product or manufacturer (46).

Until recently, the U.S. banned the Centers for Medicare & Medicaid Services (CMS) from negotiating drug prices directly with manufacturers. When the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 was passed, legislators and stakeholders argued that PBMs would do the work of reining in manufacturer prices and thus CMS did not need to be involved (47). In other policy discussions, the pharmaceutical industry as well as funded interest groups have pushed back against price control legislation, claiming that if the revenue stream is limited, pharmaceutical innovation will be damaged and costs will be shifted onto other countries, leading to increased disparities (48,49). Currently, as CMS undertakes efforts to negotiate drug prices for a select number of treatments, it is also facing several legal challenges from the pharmaceutical industry claiming that negotiation would result in “takings” of their revenue, a claim that has been disputed by legal scholars (50).

Banting’s intent in seeking patent protection for insulin was to ensure access for all who needed it (34). But in current drug development, patents often serve a different purpose. Patents are awarded for 20 years but are typically filed before market authorization and FDA approval. Once a product is approved and launched, the initial period of patent protection allows companies exclusive rights to market their products without competition, usually for 10 years, so they can benefit from monopoly pricing protection (51). The pharmaceutical industry asserts that such intellectual protection periods are necessary. It is estimated that each new drug costs the manufacturer anywhere from $700 million to $2.6 billion to bring to market (52). Patents allow companies to recoup the costs of research and development and make a profit on their products, providing incentives for future drug development. Once patents expire and competition sets in, a company’s revenue on a given product can decline substantially, which can lead to significant cost savings for public and private payers.

Given the impact that competition can have, manufacturers engage in a variety of anticompetitive practices to prolong exclusivity on the market and to make it more difficult for generic or biosimilar competitors to enter the market (Fig. 2). One tactic companies use to extend patent exclusivity is a strategy known as “evergreening.” This involves filing new additional patents for older products through minor design modifications, effectively delaying competition for extended periods of time. Another tactic is the creation of “patent thickets,” where companies file numerous patents on one product, extending their monopoly price protection periods well beyond the 20-year life span of a patent. In the case of Lantus, Sanofi filed >70 patents on the product. If granted, these patents would have guaranteed Sanofi exclusivity for 37 years beyond its initial launch in 2000 (53). Sanofi’s patent practice on Lantus has stirred controversy and is currently under investigation by the Federal Trade Commission (FTC) (54). A similar trend is currently being seen for GLP-1 RA. A recent analysis showed that there is a median of 19.5 patents listed per GLP-1 RA product (55). Since the first FDA approval for a GLP-1 RA in 2005, there has been no successful challenge by a generic firm on a GLP-1 RA patent (55). Companies also engage in a tactic called “product hopping” where they channel health care professionals to prescribe the modestly tweaked branded product by discontinuing the original drug facing patent expiry. One recent example of product hopping is the announced discontinuation of insulin detemir (Levemir) manufactured by Novo Nordisk (56), which may encourage clinicians to prescribe insulin degludec (Tresiba), the newer version of long-acting insulin made by the same company. This practice has been common for insulin, with many older insulin products, such as ultralente or animal-derived insulins, discontinued and no longer available to drive pricing down from the prices of newer patented products (34).

In parallel, other strategies serve to delay generic market entry. Brand-name manufacturers engage in a tactic called “pay-for-delay,” where they pay manufacturers of generic competitors to not enter the market. Although this anticompetitive practice has been repeatedly challenged by the FTC, it has often been held up by the courts despite its dubious legality (57). Manufacturers also create “authorized generics” where they produce their own generic version of a drug, which they put on the market before their patent expires, discouraging competitors from entering the market. This latter practice has been implemented recently by insulin manufacturers. Eli Lilly, for example, issued a “generic lispro” that they marketed at half the price of their brand-name Humalog. In addition to discouraging further competition, it also did not improve access as promised. A study by Senators Elizabeth Warren and Richard Blumenthal showed that 83% of pharmacies surveyed across all 50 states in 2019 did not carry the generic lispro and the pharmacies that did carry it typically did not offer it proactively to patients. If patients did not specifically know to ask for it, they would not get the cheaper version (58).

Additional regulatory hurdles to generic production exist because insulin is a complex molecule made from living cells and not a synthesized chemical. Such complex molecules, termed biologics, are not straightforward to mimic. Approved versions of existing biologics, called biosimilars, face additional regulatory scrutiny (34). In light of these barriers, few competitors have even attempted to enter the market and insulin production has historically been dominated by three major companies. This has not led to competitive price reductions; rather, these companies function as an oligopoly. In addition to their engagement in other anticompetitive practices, they have actually raised prices for their medications in tandem rather than competing against each other (6). For insulin, such practices have directly contributed to current inflated prices.

Anticompetitive practices and misaligned incentives along the pharmaceutical value chain have directly contributed to unchecked pricing of pharmaceuticals in the U.S., yet these practices, until more recently, have received relatively little oversight (59). The pharmaceutical lobby is the largest lobby in the U.S., dwarfing its closest competitor by $150 million annually (60). The large campaign donations many politicians receive from this industry limit their ability to speak out against policies that may restrict the industry’s profitability (52). Many patient advocacy groups, which ostensibly represent patient interests, are also heavily influenced by the financial contributions of the pharmaceutical industry (61). The three major insulin manufacturers, for example, represent some of the largest sponsors of the leading diabetes advocacy groups (61). The pharmaceutical industry in the U.S. also funds more than half of continuing medical education (62) and the majority of clinical trials (63). Clinicians and researchers not only frequently have financial ties to industry but also are educated in a system that is shaped by the interests of pharmaceutical companies (62,64). This financial power has woven industry interests into every layer of the American health care system and may explain the relative absence of oversight on industry practices that have led to excessively high drug prices in the U.S.

Over the past several years, industry-independent advocacy groups have helped raise public awareness of unchecked insulin prices and have put substantial pressure on politicians for legislative reform (65,66). With polls showing that >70% of Americans are frustrated with drug pricing (67), the insulin movement has gained traction. As a result, in the past several years, there has been considerable legislative and regulatory action on insulin pricing specifically, as well as on pharmaceutical pricing in general (68) (Fig. 3 and Table 1). Understanding the effects of these policies on insulin affordability, examining how these policies were achieved, and recognizing what barriers have prevented further action can help illuminate a path to promote greater fairness, affordability, and equity in the distribution of both old and new diabetes medications.

Copay caps, which mandate that eligible patients spend no more than a set monthly cap for their supply of insulin, have gained considerable traction. Such policies directly target the amount paid out of pocket by patients and can result in immediate financial relief. In particular, given the reliance of health plans on coinsurance (which is based on list prices), capping out-of-pocket payments can lead to substantial savings for patients. However, copay caps are limited in scope as they do not apply to individuals covered by all insurance plans and they do nothing for those who do not have insurance. They are also unlikely to be extended to other drugs beyond insulin. Furthermore, capping the amount spent out of pocket by patients may simply shift costs onto insurance companies and raise the risk that insurers could pass those costs back to patients through raised premiums. Nonetheless, these policies have passed in 22 states and the District of Columbia (69), with four states extending the policies to cap copays for other diabetes supplies as well (70). In addition, an insulin copay cap policy for Medicare beneficiaries has also passed in Congress as part of the Inflation Reduction Act of 2022 (IRA). At this point, little is known about the impact of copay caps on out-of-pocket spending or on insulin use, although some data suggest that it may be most beneficial for patients with high deductible plans who use health saving accounts (71).

Policies to increase transparency with respect to the rebates passed between PBMs and manufacturers have likewise been relatively popular. Thirteen states have passed such laws (72). Information obtained because of these laws has helped uncover the ways in which rebate systems among intermediaries, manufacturers, and insurers are incentivizing list price increases rather than promoting cost control (37). Most, however, do not provide insight into all levels of the pharmaceutical value chain; thus, considerable opaqueness regarding price negotiations and rebates between intermediaries persists (73). Federal legislation that requires PBMs to report their negotiations with drug manufacturers, including drug price and rebate information as well as formulary and benefit design, has also passed unanimously out of the Senate Committee on Health, Education, Labor, and Pensions and House Committee on Energy and Commerce (74). It is possible that greater transparency in the system may allow insurers to make better decisions and may lead to more competition between PBMs, which could eventually lower drug prices; however, the impact of rebate transparency legislation on patient drug costs remains unclear.

Policies that directly regulate the rebate system have garnered mixed support. For example, a recent proposal advanced by the Senate Committee on Health, Education, Labor, and Pensions would require that all rebates PBMs receive under employer-sponsored plans be passed on to the insurer. However, critics argue that even though this would reduce insurers’ net drug spending (because the rebates would be passed on to them), it may increase the costs of PBMs’ services to insurers, essentially not changing the structure of the incentives or the profits extracted by this system (75). In addition, rebates passed on to insurers by PBMs may not be used to directly reduce out-of-pocket spending by patients or to reduce it for patients who experience high levels of spending.

Other recent policies target drug manufacturers “upstream” in the pharmaceutical value chain to stem price increases. For example, the IRA, passed in 2022, mandates that manufacturers pay rebates to Medicare for drugs with prices that rise beyond the rate of inflation, a policy that previously only existed for Medicaid (76). Given that half of all drugs covered by Medicare had price increases beyond the rate of inflation between 2019 and 2020, this policy may markedly limit future price increases for drugs already on the market, including novel diabetes therapies introduced in the past 10 years. The annual price of liraglutide (Victoza), for example, increased by 42% from 2015 to 2020, causing a year’s supply to rise from $7,936 to $11,300—more than three times the increase that would be expected with inflation. These types of price increases are disadvantageous under the IRA, since companies will be required to pay the difference in price in the form of a rebate to Medicare (77).

Another recent federal policy that reformed manufacturer rebate requirements was the American Rescue Plan Act of 2021 (ARP). The ARP eliminated a cap on Medicaid drug rebates allowing Medicaid to collect rebates beyond 100% of a benchmark average manufacturer price (AMP) (78). Medicaid uses a complex rebate system, called the Medicaid Drug Rebate Program (MDRP), to access the lowest available prices for medications. The MDRP requires that Medicaid receive a rebate from manufacturers of either 23.1% of the AMP for brand-name drugs (13% for generic drugs) or the difference between the AMP and the “best price” given to any other purchaser—whichever is greater (79).

Previously, the rebate amount manufacturers gave to Medicaid (which includes rebates for prices rising at a faster rate than the rate of inflation) was capped at 100% of AMP. The removal of this cap by the ARP has expanded the amount manufacturers can be required to give to Medicaid. For certain drugs that have been on the market for many years and have had price increases at rates much faster than the rate of inflation, the removal of this cap could result in manufacturers being required to give rebates to Medicaid greater than the amount of payment they are receiving for the product supplied, essentially resulting in manufacturers paying Medicaid to use their drug (78). In 2023, <1 year before the stipulations of the ARP were set to go into effect, all three insulin companies announced major price reductions in several of their insulin products (68,80). While this move can be attributed to numerous factors, including increased generic competition and public shaming, some analysts speculate that the Medicaid rebate cap elimination in the ARP was the catalyst behind these manufacturer-led price cuts (68). Incidentally, some have argued that the “best price” stipulation in the MDRP has been a barrier to discounts to other payers, since these lower prices would then have to be applied to the Medicaid population (79).

Government negotiation of drug pricing has been a frequent source of conflict in U.S. policy discussions. Commonplace in other countries, such policies had never passed in the U.S., largely due to fierce opposition from the pharmaceutical lobby (67). The IRA is the first bill to allow Medicare to negotiate prices of drugs, albeit in a limited manner. The policy restricts the total number of drugs subject to negotiation and specifically excludes any drugs that have generic or biosimilar competition. Negotiation cannot begin until a set time after launch of a new product. This window is set at 9 years for small-molecule drugs and 13 years for biologics (81). Reflecting the substantial cost of diabetes medications in the Medicare budget, 4 of the 10 initial drugs selected for price negotiation were diabetes medications, including one insulin product (NovoLog/Fiasp) (82).

The shortcoming of this policy is that it does nothing to curb high launch prices for new medications. In fact, by restricting the amount by which manufacturers can increase prices after launch due to inflation rebate requirements and impending drug negotiation, the legislation may perversely incentivize higher launch prices of prescription drugs covered by CMS. Launch prices have already been rising in the U.S. with no current mechanism to rein them in. A recent study found that launch prices in the U.S. increased by 20% per year between 2008 and 2021 and that between 2020 and 2021, 47% of new drugs in the U.S. were launched at a price of over $150,000 per year (83). GLP-1 RA, which are notably absent from the first list of drugs Medicare will negotiate on despite their projected costs in the budget, are a good example of high launch prices. For example, tirzepatide, the dual gastric inhibitory polypeptide/GLP-1 RA, was launched at a price of $13,000 per year (84). Such prices, along with the popularity of these drugs, are already driving insurance premiums up nationwide (85).

In a more direct challenge to manufacturers, advocates have called for list price caps, where federal law would limit how much pharmaceutical companies can charge, e.g., for insulin or for new diabetes products. Unlike copay caps, list price caps would apply across all populations, regardless of coverage, and thus improve access for the uninsured and underinsured populations. List price caps could also potentially address the problem of high launch prices of new drugs, which are currently freely set by manufacturers without any restrictions (83,86). Given that ∼40% of total global pharmaceutical revenue comes from the U.S. (87), a comprehensive list price limit on pharmaceutical products set by the U.S. federal government would substantially change the pharmaceutical market ecosystem. Indeed, such policies have been challenged by opponents with the concern that they would curb innovation (49).

Various versions of list price cap policies have been proposed, but, as of the writing of this article, none have passed into law. One policy, proposed by Senator Bernie Sanders, called the Insulin for All Act of 2023, would cap all insulin products at $20 per 1,000 units of insulin (88). A broader bill initially proposed by Congresswoman Nancy Pelosi would set drug prices (beyond just insulin) based on an international reference standard developed from looking at average prices in peer countries (89). This policy, as part of the Elijah E. Cummings Lower Drug Costs Now Act, passed in the House of Representatives in 2019 but was not brought for a vote in the Senate (90). Notably, this policy would not be applicable to novel therapies that are introduced in the U.S. first before international standards are determined.

In an effort to increase competition to reduce drug prices, patient and consumer advocacy groups have put pressure on regulatory agencies to curb anticompetitive practices by drug manufacturers and PBMs. In response, the FTC has announced that it will increase enforcement on rebate practices that keep competitors and lower-cost drugs off formularies (91). Advocates have also pressured the United States Patent and Trademark Office to take steps to work with the FDA to share information and work consistently with manufacturers so that products cannot be granted FDA approval based on the logic that the product is functionally the same as an old product and simultaneously be granted a new patent for being substantially different (92).

To abolish gaming of the patent system, Senators Richard Blumenthal and John Cornyn introduced the Affordable Prescriptions for Patients Act of 2023, which prohibits “product hopping,” authorizes the FDA to enforce this prohibition, and places limits on patent litigation. The bill is designed to encourage more competition by putting a brake on these anticompetitive practices that delay entry of generic and biosimilar products onto the market (93). Increased enforcement by the FTC and other authorized organizations on blocking corporate behaviors that clearly thwart competition will be an important part of ensuring a functional market for insulin and other diabetes treatments.

In a different tactic to encourage competition, new policies have streamlined the processes by which biosimilar products can be deemed to be interchangeable with their branded equivalents. Products that are considered interchangeable can be substituted at the level of the pharmacy (without requiring a change in prescription) so that the patient receives a lower priced version of the medication. Unlike in Europe, manufacturers in the U.S. have to demonstrate equivalence and apply to the FDA for approval of interchangeability, which disincentivizes biosimilar production in the U.S. (94). In 2020, the FDA drafted guidance, which was mandated by Congress, to reduce the burden of clinical studies needed for biosimilar insulin products to be interchangeable (95). More recently, the Biosimilar Red Tape Elimination Act introduced by Senators Ben Ray Luján, Mike Lee, Mike Braun, and J.D. Vance proposes that other biosimilars be regarded as interchangeable with their branded equivalent on FDA approval (96).

One of the most direct policy solutions to improving access and affordability of medications is through public production. Public production not only allows price setting at cost and introduces competition to other manufacturers but also can provide a non–market driven mechanism for drug manufacturing that is influenced by public health needs, which do not always align with profit-making opportunities. Recent global threats including climate change, war, and the COVID-19 pandemic have revealed that supply chains are not guaranteed. Public production offers not only a mechanism for cost control but also a way to ensure access to necessary medications, which can be a matter of national security.

In response to the insulin advocacy movement, public production of medication is being tried for the first time. In 2022, California passed a $100 million bill to produce insulin through a state-based program called CalRx (97). To disrupt the insulin oligopoly, this bill is designed to offer a generic form of three different insulins: lispro, aspart, and glargine, which are no longer patent protected. CalRx estimates it will be able to offer these insulins at a 90% price reduction from current market prices (98). There are several implementation challenges with this strategy, including successful manufacturing of an FDA-approved biosimilar, obtaining a large enough and sustainable market, and maintaining a funding stream that will ensure ongoing production. If successful, however, this method of public drug production could provide true generic competition and be a model for ensuring accessibility to newer diabetes drugs as they come off patent (99). Notably, public production could be applied to patent-protected products, but this would require that “march-in” rights be invoked. March-in rights, which have not been exercised to date, allow the U.S. government to grant patent licenses to other parties, including themselves, under specific provisions (100).

Recently, Senator Elizabeth Warren and Congresswoman Jan Schakowsky introduced a bill that would make public manufacturing part of a permanent solution to lower drug costs. The bill, called the Affordable Drug Manufacturing Act, would establish an Office of Drug Manufacturing within the Department of Health and Human Services that would be specifically charged with manufacturing select generic drugs. The intent is to increase generic competition, lower prices, and guarantee affordable patient access to medications (101). Lessons from the insulin public manufacturing experiment in California will be important as this bill is considered.

The insulin pricing crisis has exposed multiple shortcomings in the way that drug prices are regulated in the U.S. To guarantee affordable and equitable access to medications for diabetes and obesity, the current system needs to be reformed and further regulated. The story of insulin has demonstrated that greater competition in the market is unlikely to occur simply as a matter of time and progress. Ensuring healthy competition requires a careful alignment of incentives and a closing of loopholes that have allowed anticompetitive practices and unchecked pricing to persist. Federal regulatory agencies including the FTC, FDA, and United States Patent and Trademark Office have started taking steps to limit such practices, but the pharmaceutical market continues to be dominated by monopolies and oligopolies. Considerably more oversight and enforcement from these agencies are necessary to limit patent abuse and overt anticompetitive practices.

Competition alone, however, may not bring drug prices into an affordable range. State and federal regulation and policy are needed to address problems at multiple points along the pharmaceutical value chain. Some of the laws that, to date, have gained the most traction, such as copay caps, are also the most limited in scope, applying only to insulin and only for certain insured populations. These laws do not directly impact the pharmaceutical industry and thus have received little opposition from its powerful lobby. Other laws are starting to produce more substantive reforms, such as the rebate reform seen in the ARP or government negotiation of select drug prices mandated by the IRA; however, these laws still do not address high drug launch prices. Public production may hold promise to both increase competition and offer truly lower prices, but this program is currently only designed for insulin and is taking considerable resources to execute. Nevertheless, it could provide a blueprint for price control and accessibility if scaled to the federal level and applied to other drug classes. All of the policies proposed or passed have some limitations. Significant investment is needed to continue to evaluate the impact of policy changes and to continue to refine them so that they achieve their intended goals of improving affordability for patients.

Any policies or regulatory efforts that limit the profitability of pharmaceutical companies will continue to be opposed by the industry. While elected representatives, clinicians, researchers, and advocacy groups purportedly represent patient interests, financial ties to industry can produce substantial conflicts of interest, limiting the willingness to adopt transformative changes to enable lower prices and costs for patients (52,61,62,64). As we move forward, we must critically appraise these multiple levers along the drug development and access pipeline and how they influence diabetes and obesity care. Achieving affordable drug pricing will require a multifaceted approach with continued evaluation of the impacts of policy reform, regulatory action, and the incentive structures of all involved. It is our responsibility as clinicians, researchers, and citizens to hold the power of corporate entities in check and help shape policies that put the needs of patients first.

Funding. The work of K.E.N. on this project was supported by the National Institute of Diabetes and Digestive and Kidney Diseases, National Institutes of Health, under award no. T32DK007028. R.R. reports research support through Yale University from Arnold Ventures, research support through Yale Law School from the Stavros Niarchos Foundation, and research support from the FDA, all outside the submitted work. K.J.L. reports research support from the National Institutes of Health and Patient-Centered Outcomes Research Institute (PCORI) and research support from CMS to develop and evaluate publicly reported quality measures, all outside the submitted work.

The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health. The funding organizations had no role in the design or conduct of the study; collection, management, analysis, or interpretation of the data; preparation, review, or approval of the manuscript; or decision to submit the manuscript for publication.

Duality of Interest. R.R. reports consultant fees for the ReAct - Action on Antibiotic Resistance Strategic Policy Program at Johns Hopkins Bloomberg School of Public Health in 2022, which was funded by the Swedish International Development Cooperation Agency, all outside the submitted work. K.J.L. reports royalties from UpToDate to write and edit content, all outside the submitted work. No other potential conflicts of interest relevant to this article were reported.

Author Contributions. All authors researched data. K.E.N. wrote the manuscript. R.R. and K.J.L. contributed to discussion, reviewed and edited the manuscript, and drafted sections of the manuscript.

Handling Editors. The journal editor responsible for overseeing the review of the manuscript was Steven E. Kahn.