Colossal Wrongdoings by Big Pharma – Insulin Price Gouging – Asrar Qureshi’s Blog Post #1092

Colossal Wrongdoings by Big Pharma – Insulin Price Gouging – Asrar Qureshi’s Blog Post #1092

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1092 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com  for publishing your contributions here.

Insulin Vials

Insulin Pen

Preamble

Few drugs in modern medicine are as essential—and as emblematic of life-saving innovation—as insulin. Since its discovery in 1921, insulin has been a lifeline for millions of people living with diabetes. Yet, over the past two decades, a storm of controversy has erupted over the skyrocketing price of insulin in the United States and elsewhere, turning this once-celebrated medical breakthrough into a symbol of pharmaceutical greed and systemic dysfunction.

This blog post explores the insulin price gouging crisis from 2000 to the present. We will examine how pharmaceutical companies manipulated pricing structures, the consequences for patients, the failure of regulatory oversight, and the growing momentum for reform. The insulin pricing scandal is a case study in the ethical limits of capitalism in healthcare—and a clear call for accountability.

The Historical Promise of Insulin

When Frederick Banting and Charles Best discovered insulin in the early 1920s, they famously sold the patent for just $1 to the University of Toronto, intending it to be freely available for all. Their goal was noble: to ensure that this life-saving medication would remain affordable and accessible.

For much of the 20th century, insulin remained relatively inexpensive. But starting around the year 2000, prices in the United States began to climb dramatically. The cost of insulin nearly tripled from 2002 to 2013 and has continued to rise in the years since. By the late 2010s, a vial of insulin that once cost $25 could cost over $300. Many patients require multiple vials per month, pushing the monthly cost of insulin therapy into the thousands for some.

The Big Three: Eli Lilly, Novo Nordisk, and Sanofi

At the center of the controversy are the three dominant insulin manufacturers: Eli Lilly (U.S.), Novo Nordisk (Denmark), and Sanofi (France). These companies control over 90% of the global insulin market and have been repeatedly accused of engaging in shadow pricing—a practice in which companies raise prices in lockstep to avoid undercutting one another.

For example, when Eli Lilly raised the price of its Humalog insulin, Novo Nordisk and Sanofi often followed with near-identical increases. This coordinated price behavior occurred despite no significant improvements in the drug’s formulation or production process to justify the hikes. 

The lack of generic competition has also enabled these companies to maintain high prices. While biosimilars (the biologic equivalent of generics) have been developed, regulatory and patent hurdles have delayed their widespread availability and effectiveness in reducing costs. More importantly, the pricing is such that the generics cannot offer major price advantage.

In Pakistan, the same big three first created artificial shortage of insulin and then raised the prices substantially. Three generic versions of insulin are registered with DRAP but their availability is extremely uncertain. Insulin patients cannot switch between brands just like that, so that they are forced to use the products of Big Three.

The Role of Pharmacy Benefit Managers (PBMs) in the US

A critical but lesser-known player in the insulin pricing ecosystem is the pharmacy benefit manager (PBM). These middlemen negotiate prices between drug manufacturers, insurance companies, and pharmacies. In theory, PBMs should reduce costs by leveraging bulk purchasing power. In practice, however, they have been accused of contributing to price inflation.

PBMs often receive rebates and fees from manufacturers based on the drug’s list price. This creates a perverse incentive to favor higher-priced drugs, since higher list prices yield bigger rebates. As a result, manufacturers are pressured to keep list prices high—even as net prices (after rebates) may remain stable—leaving uninsured or underinsured patients stuck paying inflated list prices.

Impact on Patients and Public Health

The human cost of insulin price gouging has been devastating.

Thousands of patients have reported cutting back on their insulin dosage or skipping doses entirely due to cost. This can result in life-threatening complications, including diabetic ketoacidosis (DKA), which can be fatal if untreated.

For many patients, especially those without comprehensive insurance, the monthly cost of insulin can consume a substantial portion of their income.

Some Americans have resorted to traveling to Canada or Mexico to purchase insulin at a fraction of the U.S. price.

According to a 2020 Yale study, one in four American insulin users reported underusing the drug due to cost. This is a damning statistic for a country with some of the most advanced healthcare technologies in the world.

Whistleblowers and Investigations

The insulin scandal has attracted significant legal and political scrutiny.

In 2019, the House Oversight and Reform Committee launched an investigation into insulin pricing, demanding documents and testimony from the major manufacturers and PBMs. Numerous lawsuits have accused drugmakers of price-fixing and anti-competitive behavior. In 2021, whistleblower reports and leaked internal communications suggested that drugmakers were deliberately maintaining high prices to maximize profits. Despite widespread public outrage and mounting evidence of exploitation, substantial reform has been slow to materialize.

Efforts Toward Reform

There have been some recent steps in the right direction.

Several U.S. states, including Colorado and Illinois, have implemented monthly caps on insulin copays (typically $100 or less).

The Biden administration introduced measures in the Inflation Reduction Act of 2022 to cap insulin costs at $35/month for Medicare beneficiaries.

In 2020, nonprofit organization Civica Rx announced plans to produce affordable insulin alternatives, with a target price of $30 per vial.

Moreover, public pressure has forced some manufacturers to take action. In 2023, Eli Lilly announced it would cap out-of-pocket insulin costs at $35/month for those with private insurance. Novo Nordisk and Sanofi soon followed with similar pledges.

While these developments are encouraging, they still fall short of systemic change. Many patients remain uninsured, and others fall through coverage gaps that render these price caps ineffective.

Lessons in Ethics and Corporate Responsibility

The insulin pricing scandal raises profound ethical questions.

• Should life-saving medications be subject to free-market pricing mechanisms?

• What responsibilities do pharmaceutical companies have to patients beyond shareholder returns?

• Can regulation balance innovation with affordability?

The scandal also reflects a broader issue within the U.S. healthcare system: a fragmented market that prioritizes profit over patient outcomes. It exposes the vulnerabilities of patients in a system where access to essential medicine is not guaranteed.

Global Comparison

Insulin prices in the U.S. are dramatically higher than in other developed nations. In countries with universal healthcare systems—such as Canada, the U.K., and Germany—governments negotiate drug prices directly with manufacturers, resulting in significantly lower costs.

In most developing countries, there is no concept of free market pricing; the prices are fixed by the government.

Sum Up

The insulin price gouging scandal is more than just a pharmaceutical controversy—it is a moral failure and a national health crisis. It exemplifies how unchecked capitalism in healthcare can lead to preventable suffering, inequality, and even death.

As pressure mounts from patients, activists, lawmakers, and healthcare professionals, the tide may be slowly turning. But true justice will only come when insulin—and other essential medicines—are treated not as commodities, but as public goods that belong to everyone.

Until then, the story of insulin in America remains a potent symbol of both medical triumph and societal failure. It is a scandal that demands remembrance, reform, and resolve.

Concluded.

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