Diabetes Costs and Affordability in the United States
Institute Report
Jun 29, 2020


Even in the current healthcare climate, which is feeling the impact of the social and economic disruptions related to COVID-19, healthcare and medicine costs remain a key concern for patients, payers, and policymakers. Diabetes is a high-profile therapy area that is often considered a driver of financial challenges for both payers and patients. It has a large and growing patient population, ranks among the top three therapy classes in terms of both utilization and drug spend for both commercial payers and Medicare, and contributes significantly to CMS costs due to high volumes dispensed. However, several key misunderstandings persist around the prices of these critical medicines. As policymakers consider significant changes to U.S. drug pricing, including rules potentially impacting diabetes pricing, this report provides analyses of pricing, and context to inform those decisions.


Diabetes costs have been a significant focus for stakeholders. The report provides detailed analyses around diabetes drug pricing, including list price, net manufacturer price, and out-of-pocket costs for patients as a function of various insurance programs. Diabetes prices have risen significantly in the past five years on a list-price basis though manufacturer net revenues have been declining and for patient out-of-pocket costs, reductions have not been uniformly observed though they have been flat or have risen only slightly overall. The report also looks at prescription abandonment related to out-of-pocket costs, and how these costs can interrupt a patient’s ability to pay. The report examines the impact of insurance coverage and finds that commercially-insured patients have higher initial cost exposure than Medicare patients, but can use coupons to offset costs and a significant proportion are doing so, such that their final out-of-pocket costs are similar to that of Medicare patients. Finally, the report details current U.S. policies and other shifts in the diabetes landscape that will impact diabetes spending over the next few years.

Key Findings


Invoice prices for diabetes medicines have been growing above inflation while net prices have been declining-to-flat for five years

  • The use of price-protection contracts and the presence of statutory rebates in Medicaid are among the most impactful drivers of lower net prices.
  • As net prices have declined, patient out-of-pocket costs have been flat to rising slightly.


Initial copays for diabetes medicines are higher for commercial patients than Medicare patients, though their final out-of-pocket costs are similar

  • For most commercially-insured patients, fixed copays still apply in traditional insurance plans, while a rising proportion have high-deductible health plans (HDHP).
  • Newer generation drugs have been less preferred within certain commercial plans than historically, leading to higher copays, though much of this higher cost exposure has been offset through coupons.


Diabetes patients facing higher costs have higher abandonment rates for prescriptions, however, the percentage of claims greater than $91 dollars is below 10% of total claims

  • Abandonment is a term reflecting the preparation of a prescription for an individual patient which is not taken home, and for diabetes patients, abandonment is highest when costs are above $91.
  • The majority of diabetes prescriptions are low-cost — with less than $30 patient out-of-pocket cost — and only 4% of patients abandon those prescriptions at the pharmacy.


Recent policies and environmental factors, such as updated tax rules and availability of novel biosimilars, have the potential to lower patient costs for diabetes

  • The IRS extended the group of therapies that are considered preventive in high-deductible plans with health savings accounts (HDHP/HSA). Diabetics could benefit from savings for several of their drugs or medical supplies including hypertension, heart disease, cholesterol among others.
  • The new CMS Senior Savings Model for diabetes would enable some plans to offer lower patient costs for diabetes and as with all Part D plan choices.
  • Non-original versions of insulin glargine and lispro, while not approved through the biosimilar pathway, continue to contribute to lower costs for some patients and will likely see wider uptake.
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