During the run-up to the second round of the 2019 primary Democratic debates, Sen. Bernie Sanders made headlines by leading a caravan of diabetic Americans to purchase affordable insulin from Canada. The stunt was meant to draw attention to an already prominent question in mainstream discourse: how can a life-saving drug like insulin, which millions of Americans depend on to stay alive, cost them hundreds or thousands of dollars every single month?

Many of us are prescribed a plethora of costly medications, but instead of forking over wads of cash for our treatments, we simply ask for an un-branded, “generic”, version of the medication. Pharmacists usually provide us with a medication that does exactly the same thing as what we were prescribed, but at a fraction of the cost. Surely, for something as common and costly as insulin, something similar should be available?

Surprisingly, generic insulin has simply not existed for decades, and pharma companies are only just starting to explore making cheaper alternatives available. The reasons why are complex, and somewhat shocking.

Who needs insulin?

Insulin is a hormone produced by most healthy individuals in the pancreas. Bodies release insulin into the bloodstream in proportion to levels of sugar in the blood. Once released, insulin facilitates the break-down (or metabolism) of blood sugar into usable energy, thereby preventing the toxic build-up of sugar in the blood (called “hyperglycemia”).

While most people are able to produce their own insulin, this function is impaired or absent in diabetic individuals. Nearly a quarter of America’s 20 million diabetics supplement their bodies’ insulin production with injections of pharmaceutical insulin. Without these injections, diabetics can suffer the very severe consequences of hyperglycemia. Some of these effects can be disfiguring, and, in extreme cases, can be deadly.

If you aren’t a fan of needles (and really, who is?), injecting oneself 2 – 6 times a day sounds pretty uncomfortable. But these injections are far more than simply a pain or an inconvenience for many Americans. That’s because, in addition to being lifesaving and commonly used, insulin can be so expensive that, for those without the means to absorb the incredible monthly costs of up to $400, insulin has become an unaffordable “luxury”.

This all begs the question: when did insulin become so expensive, and why?

Biologics and bio-similarity: It’s complicated

To understand why insulin, unlike many conventional drugs, has not been made available in generic form, we should first explain what we mean by a “generic” version, and why insulin is fundamentally different from most other drugs. We will see that the complexity of biologics like insulin makes them both more expensive to understand and replicate, and more laborious to submit to regulatory approvals.

A true, “authorized” generic version of a brand-name drug is identical in effect, dosage, and composition, but is sold without the brand label. Take Lopressor, a popular hypertension medication, as an example. Patients can pay a premium for Lopressor, or they can ask their pharmacist for metoprolol, which is the chemical name for Lopressor, sold without the label (and associated price tag).

Lopressor/metoprolol is also an example of a conventional, or “small-molecule” drug. Small-molecule drugs typically comprise a small, simple molecule (hence the name) which is relatively straightforward for third parties to approximate or reproduce. Their manufacturing processes can easily be scaled and replicated with near-perfect confidence. Unfortunately, insulin belongs to a different drug category, called “biologics”, which are much more difficult to replicate.

While a generic conventional drug mimics another’s form and function, a generic biologic drug is 100% identical to another biologic drug. Drugs that mimic other biologics are instead referred to as “bio-similar”.

Reverse-engineering a biologic to make a bio-similar version is much harder than it is for conventional drugs. This is partly because biologics are far more complex than conventional drug molecules. Compare Prozac (fluoxetine), a conventional drug, with Humira, a biologic. A Prozac molecule has less than 50 atoms and is so simple that a high-school student could map it out on paper, while Humira has over 1,330 amino acids (each with ~20 atoms), and requires sophisticated modeling techniques to understand its layout.

Has insulin always been this expensive?

Insulin has not always been as expensive as it is today. Its price has ballooned over time, outpacing even inflation by a large margin. One study reported a near tripling in cost over fourteen years, from $231 in 2012 to $736 in 2016.

Though a medical staple now, insulin has only been offered as a drug since the 1920s. After discovering how to produce insulin in 1921, Canadian researchers Frederick Banting and Charles Best recognized their discovery’s lifesaving potential and sold the patent to the University of Toronto for a mere $1. Banting remarked that insulin did not “belong to [him]”, but rather “to the world”, wanting it to be accessible by all.

Though laudable, it was soon apparent that the University did not have the means to widely produce the substance. Hence the patent was sold to large pharmaceutical companies, along with the rights to any future patents for improvements on the original process. This laid the groundwork for the process of “evergreening”, by which the pharma companies would keep patents out of reach of would-be competitors for decades.


Innovation is both a blessing and a curse when it comes to insulin. There is no doubt insulin has come a long way since the process for deriving it from livestock organs was discovered in 1921. But so many successive improvements to the formula have come at the cost of making it difficult for competitors to replicate existing offerings.

Compared to their cow-derived counterparts of the early 20th century, today’s synthetic insulin products are safer, more effective, and require fewer daily injections. These improvements are due to regular, incremental patented improvements. This constant refreshing of patents prevents competitors from catching up and producing a bio-similar version. By the time a third party can do so, the product they have mirrored will have been rendered obsolete by a newer offering, making doctors less willing to prescribe it and pharmacies and insurance companies unable to swap it out for the newer version.

Pay-to-delay, monopolies, and price-fixing

The patents for virtually every insulin product on the market are held by one of three pharmaceutical companies – Sanofi, Eli Lilly, and Novo Nordisk. While these companies have overseen incremental improvements in insulin quality, they have also drastically inflated the price of their offerings.

Normally, free markets drive innovation and reduce prices through the power of competition. Monopolized markets, however, are hostile to competition, and typically represent the opposite trends: stagnant innovation and rising prices. With virtually the entire supply of insulin concentrated in the hands of a small number of market players and high entrance barriers precluding any new competition from entering the market, the current situation might fairly be described as a monopoly on insulin.

These monopolies are maintained through “pay-to-delay” tactics. This practice, employed by major pharma companies, involves paying their would-be competitors to delay the marketing of a bio-similar product for some time. This prolongs the time it takes for these bio-similars to become available; when combined with evergreening, by the time the pay-to-delay period expires, the patent has already been updated, rendering the bio-similar obsolete.

Monopolies also enable collusion and price-fixing. While the big three deny allegations of price-fixing, many have pointed to these practices as root causes of price hikes. One would expect competitors who sell nearly identical products to undercut each other’s prices to corner the market. When the opposite occurs, as it did between 2002 and 2013, suspicions arise; one possible explanation is that the companies have agreed to raise their prices to share the increased profits, though this remains speculation.

Red-tape and bureaucracy

Pharma manufacturers are not the only node in the larger pharmaceutical-industrial network that bears responsibility for insulin prices. The US Food and Drug Administration (or “FDA”) is the regulatory body responsible for approving all new drug products available for sale in the US. While all drugs have certain hurdles to jump through to become FDA-approved, generic drugs usually follow an expedited path to approval, due to their simplicity.

For biologics like insulin, the story is quite different. As discussed, biologics are complex – in structure and in terms of production. Even the slightest difference in molecular structure or production technique can have a profound impact on the efficacy or safety of the medication. Therefore, before reaching the market as true alternatives to existing insulin products, bio-similars must navigate extensive red tape and testing.

What is being done about the high costs?

The untenable cost of insulin has crystallized public sentiments about the general cost of healthcare in the US. Facing growing backlash, pharma companies, regulators, and even Congress have taken notice. While the path to truly affordable insulin remains largely ahead, significant strides have certainly been taken in the right direction.

To their credit, major pharma companies have responded to critics’ pressure with some concrete actions. Eli Lilly now offers 40% rebates to their uninsured customers who pay the full retail price for insulin. And all three major insulin producers now offer generics or bio-similar versions at a reduced (though still steep) price. Eli offers Lispro, for example, which is identical to their own Humalog, but sold for half the cost. Novo Nordisk and Sanofi have similar offerings.

Even the FDA, which typically resists change, made significant changes to the regulatory approval pathway for insulin bio-similars in 2020. Such changes should simplify approvals for future bio-similars and abbreviate the overall process. While hopeful, many recall their disappointment following congress’ passing of the 2009 Biologics and Price Competition Act, which had little real impact. Only time will tell whether the 2020 changes will follow a similar fate.