Capping the Flood: Efforts to Address the Ever-Rising Price of Insulin

by Emmaline Fisher, Associate Member, University of Cincinnati Law Review Vol. 91

I. Introduction

There is a need for a cap on the high cost of insulin in the United States.1Senator Baldwin Cosponsors Legislation to Cap Insulin Prices at $35 Per Month, Bladwin.Senate.Gov (Mar. 10, 2022), []. It is the most expensive chronic illness in the country, totaling a cost of about $327 billion per year.2INSULIN Act Summary, Shaheen.Senate.Gov, []. Over the last twenty years, the leading manufacturers have increased insulin prices by more than 600%.3Steve Inskeep & Allison Aubrey, Insulin Costs Increased 600% Over the Last 20 Years. States Aim to Curb the Price, NPR (Sept. 12, 2022, 5:07 AM), []. Within the United States, there are thirty-seven million people who have diabetes, and it is estimated that about one of every three seniors has this chronic illness.4INSULIN Act Summary, supra note 2. Diabetes is one of the leading causes of death in the United States, causing 100,000 deaths in 2021.5Id. Since costs have steadily increased over the past few years, more and more people have had to ration and hoard insulin, which can potentially lead to complications and even death.6Bram Sable-Smith, Insulin’s High Cost Leads to Lethal Rationing, NPR (Sept. 1, 2018, 8:35 AM) [].

This article discusses the enacted and pending legislation that seek to address this problem.  Section II provides background on pharmaceutical middlemen as a major cause of the rising price of drugs in the United States, the enactment of the Inflation Reduction Act, and pending legislation that seeks to address remaining gaps in the Inflation Reduction Act’s insulin cap. Section III compares the pending legislation and points out flaws in the way it seeks to solve the problem. Finally, Section IV concludes by naming the two pieces of legislation that have the greatest likelihood of alleviating the financial burden for the greatest number of diabetic Americans.

II. Background

A. A Major Cause of Rising Prices: Middlemen and the Lack of Transparency

Pharmacy Benefit Managers (“PBMs”) negotiate discounts with drug manufacturers, determine patients’ copayment amounts, create formularies (lists of prescription drugs covered by an insurance plan), and decide how pharmacies are reimbursed for distributing prescriptions.7Sara Hasard, The Driver Dictating Prescription Drug Benefits: PBMs Explained, Bloomberg L. (Mar. 3, 2022, 5:45 AM), []. There are three main PBMs that control the vast majority (eighty-five percent) of the market: OptumRX, CVS Caremark, and Express Scripts.8Id. Critics of their practices believe that PBMs have contributed to rising drug prices.9Id. PBMs are able to keep part of the discounts and rebates that they negotiate with manufacturers.10Id. They are supposed to pass on both the rebates and discounts to consumers and health insurance plans.11Id. However, there is very little transparency about how much of the discounts and rebates are passed along.12Stephanie Hedt, New Evidence Shows Prescription Drug Rebates Play Role in Increasing List Prices, USC Schaeffer (Feb. 11, 2020), [].

Drug manufacturers argue that the rising prices are caused by PBMs because they have to pay the PBMs rebates and give discounts in order to ensure that their products have a preferred formulary placement.13Hasard, supra note 7. There appears to be a direct relationship between the increase in rebates and list prices of drugs.14Hedt, supra note 12.

Spread pricing, where PBMs pocket the difference between what they charge insurers or employers for a drug and what is reimbursed to the pharmacies, is another practice that has led to increased drug prices.15Hasard, supra note 7. These tactics by PBMs are likely a major contributor to the rising cost of drugs, specifically insulin.16Thomas Sullivan, Pharmacy Benefit Manager Transparency Act of 2022 Introduced, Pol’y & Med. (May 30, 2022), [].

There is some effort to address PBMs’ questionable practices.17Id. The Pharmacy Benefit Manager Transparency Act was introduced on May 24, 2022.18Id. This piece of legislation would force PBMs to provide more transparency regarding their practices by granting the Federal Trade Commission (“FTC”) the ability to hold them accountable.19Id. PBMs would have to report their profits made through spread pricing, and they would be required to explain why they moved drugs to different formulary tiers, resulting in increased costs.20Id. It would also create incentives for PBMs to actually pass along all of their rebates to health plans.21Id.

B. Inflation Reduction Act

The Inflation Reduction Act, which was recently passed in August 2022, seeks to partially address the rising cost of insulin.22Lorie Konish, The Inflation Reduction Act Caps Costs for Medicare Patients on Insulin. Where the Push for Broader Relief Stands, CNBC (Aug. 16, 2022, 8:30 PM), []. It limits insulin copays to $35 per month, starting in 2023.23Id. However, the Act fails to apply to diabetics who have private health insurance.24Id. The bill went through the budget reconciliation process.25Id. (“In that process, the Senate Parliamentarian ruled broader insulin reform for non-Medicare patients could not be included in the legislation. Senate lawmakers then sought 60 votes in order to keep it in the bill. But they fell short with just 57 votes, as 43 lawmakers opposed it.”). As a result, the broad cap of insulin prices was removed, and the insulin cap was only applied to Medicare Part D beneficiaries.26Id.

The two bills that intend to cap the out-of-pocket costs to $35 per month for those under private health insurance and Medicare are the Affordable Insulin Now Act and the Improving Needed Safeguards for Users of Lifesaving Insulin Now Act (“INSULIN Act”).

C. Affordable Insulin Now Act

The Affordable Insulin Now Act, which passed the House near the end of March 2022, plans to cap cost-sharing (the amount paid by the insured) of insulin for those under Medicare and private health insurance at $35 per month or at 25% of the plan’s negotiated price (whichever is less).27H.R. 69833 – Affordable Insulin Now Act,, []. However, this bill fails to include any component that would result in drug policy reform.28House Insulin Bill is a Missed Opportunity, Comm. for a Responsible Fed. Budget (Apr. 18, 2022), []. It focuses solely on simply reducing the cost of insulin, which is ultimately a short-term solution to a much larger problem.29Id.


The bipartisan INSULIN Act was introduced in the Senate in June 2022.30Lauren Clason, Senators Release Bill Targeting Insulin Prices, Roll Call (June 22, 2022, 5:00 AM), []. It has several methods aimed at controlling the price of insulin.31INSULIN Act Section-by-Section,, []. One is that it plans to prevent insurance plans and PBMs from collecting rebates on insulins that limit list prices to 2021 net prices for Medicare Part D or equivalents.32INSULIN Act Summary, supra note 2. Additionally, it will create a certification process, through which insulin manufacturers can have their insulin designated as a certified insulin.33INSULIN Act Section-by-Section, supra note 31. To receive this designation their list prices must not be greater than the average of the Medicare Part D negotiated price for that specific insulin.34Id. If list prices increase above the certified price, the insulin may be decertified.35Id. It will limit copays to $35 per month or 25% of the list price of the certified insulin, as well as waiving any applicable deductibles.36INSULIN Act Summary, supra note 2. This must be done for at least one insulin of each type and dosage form.37Id. The INSULIN Act also has a component that works to ensure that prior authorization, step therapy, and imposed medical requirements cannot be used to limit beneficiaries’ use of certified insulin.38Id.

III. Discussion

Unfortunately, while the Inflation Reduction Act did cap insulin costs for some consumers, specifically those on Medicare Part D, it failed to benefit many other diabetics who are either on private health insurance or uninsured.39See supra Part IIB. The INSULIN Act and the Affordable Insulin Now Act both seek to reduce insulin costs for those on Medicare and private health insurance.40See supra Part IIC and Part IID.

When comparing the INSULIN Act and the Affordable Insulin Now Act, it appears that they are very similar.41Id. Both have the goal of capping cost-sharing at $35 per month for both those on private health insurance and Medicare.42Id. The main problem with the INSULIN Act is that it is entirely voluntary.43Alex Ruoff, Congress Flounders on Bipartisan Attempt to Lower Insulin Costs, Bloomberg L. (July 15, 2022, 5:00 AM), []. From an objective standpoint, there is very little motivation for manufacturers to participate in this program, other than having their insulin be listed as certified.44Id.

By preventing PBMs from receiving rebates on certified insulin, the INSULIN Act does place some limits on them.45INSULIN Act Section-by-Section, supra note 31. But it truly does not address any of the major issues surrounding PBMs.46See supra Part IIA. They will continue to do spread pricing, collect rebates on noncertified insulin and other drugs, and their industry as a whole will continue to act with almost complete opacity.47See supra Part IIA and Part IID. Ultimately, the INSULIN Act appears to be an ineffective, shortsighted fix to a problem that continues to worsen.48Ruoff, supra note 43.

The Affordable Insulin Now Act, while it would cap insulin copays at $35 a month, only applies to those who are on private and public health plans.49Konish, supra note 22. However, it does not have price protections for those who do not have insurance, completely excluding the people who are already paying exorbitant amounts for their insulin.50Matt McConnell, US Congress Falls Short in Plan to Cut Insulin Costs, Human Rts. Watch (Feb. 23, 2022, 6:00 AM), []. Like the INSULIN Act, it does not address any of the major problems in the pharmaceutical industry, like the lack of transparency surrounding the practices of PBMs.51See supra Part IIA and Part IIC. The Pharmacy Benefit Manager Transparency Act would potentially have a greater effect on reducing drug prices overall.52Sullivan, supra note 16. By creating more transparency surrounding the practices of PBMs and limiting the amount of money that they pocket instead of passing the discounts on to consumers, perhaps there may be some reduction in prices.53Id. However, this may take a longer time, and there are still many other causes of the high costs of insulin that are beyond this article’s scope.54Simeon I. Taylor, The High Costs of Diabetes Drugs: Disparate Impact on the Most Vulnerable Patients, NIH Nat’l Library of Med. (Sept. 11, 2020), [].

IV. Conclusion

The best outcome here would be the passage of both the Pharmacy Benefit Manager Transparency Act and the Affordable Insulin Now Act.55See supra Part III. However, the Affordable Insulin Now Act would still exclude those who are uninsured, and they would still have to pay high prices for insulin.56See supra Part IIC. Ultimately, the Affordable Insulin Now Act is still a short-term fix, and it is necessary to continue to search for solutions.57See supra Part IIC.

Cover Photo by Alan Levine on Flickr


  • Emmaline Fisher graduated from Georgia Tech with a degree in Chemical Engineering, and after working for a bit, she decided to go to law school to pursue a career in intellectual property law. When she has free time, she enjoys spending it outdoors with her dog, Penny.


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