Background on Insulin and Diabetes

Insulin is a hormone created by the pancreas, helps the human body convert sugar into energy, and lowers blood sugar. Insulin can be injected into the body or inhaled. An insufficient amount of usable insulin could lead to high blood sugar, which can lead to long-term issues like heart disease, impaired cognitive functions, and nerve damage. If one has diabetes, it means their body cannot make sufficient levels of insulin or is unable to use insulin properly. Diabetes is associated with higher health-related costs, as those over 65 and with diabetes “spend roughly double on per capita annual health care expenditures than any other age group above the age of 18.”

As of 2023, an estimated 40.1 million Americans have diagnosed or undiagnosed diabetes, according to the Centers for Disease Control and Prevention (CDC). Additionally, the CDC estimates 115.2 million Americans 18 years old or older have prediabetes, or have higher than normal blood sugar. 7 million Americans use insulin daily, according to an insulin fact sheet published by the American Diabetes Association in 2023. 

U.S. State Insulin Caps and International Comparisons

In the U.S., there is no singular, comprehensive law that limits or “caps” the maximum amount a patient would have to pay out-of-pocket for an insulin prescription. At the federal level, insulin is capped at $35 for those on Medicare, which is medical insurance for those 65 years old or older. However, individuals without Medicare part B or D, or who have different forms of insurance, do not benefit from this policy. 

Currently, 29 states and the District of Columbia have different insulin copayment caps for state-managed commercial healthcare plans. Colorado was the first to pass an insulin capping legislation, which came into effect January 2020. California became the final state to cap insulin prices in October 2025. 

Insulin is more costly in the U.S. compared to other countries, as costs and regulation vary per state. According to one study, the “average American insulin user spent $3490 in 2018 on insulin, compared with Canadians who spent $725 per user: a 381% difference.” In 2018, the average price per vial for all types of insulin were drastically different depending on the country: $6.94 in Australia, $11 in Germany, $12 in Canada, and $14.40 in Japan. The most expensive was the United States at $98.70, with the second most expensive being Chile at $21.48. 

Arguments for Insulin Caps

One main concern advocates for state-level insulin caps seek to address is the high cost of insulin. Adjusting for inflation, insulin costs increased by 24% from 2017 to 2022. In 2022, an “estimated 37% of households with individuals with diabetes were unable to afford insulin” which has led to “approximately 25-30% of Americans with diabetes report[ing] rationing or skipping their insulin due to its high cost.” A vial of insulin can cost more than $300 without insurance. Newer generic versions of insulin may be less expensive at $45 per vial, yet are still more expensive compared to the average costs per insulin vial abroad. 

Another economic benefit proponents of insulin caps point to are the potential savings for uninsured insulin users. In 2024, the National Center for Health Statistics reported that 27.2 million Americans of all ages were uninsured. The Journal of the American Medical Association calculated a potential $273 million saved for uninsured insulin users in the United States if insulin co-payments were capped at $35, using data from 2022. The author of the commentary article, Rebecca Myerson, a professor of population health sciences at the University of Wisconsin’s School of Medicine and Public Health, wrote that “Ultimately, addressing insulin affordability for all insulin users, including the uninsured, will be needed to prevent the tragic loss of life due to insulin rationing.”

Supporters of the state-level caps also raise alarm around healthcare companies seeking to increase insulin prices. Sanofi, a biopharma company, developed Lantus, “a long-acting man-made-insulin used to control high blood sugar in adults and children with diabetes mellitus.” In 2016, Sanofi raised the price of a vial of Lantus from $35 in 2001 to $249.06. A U.S. Senate Finance Committee staff report found that Sanofi’s intent behind the price increase was to maximize profits against competitors like healthcare company Novo Nordisk. Proponents of insulin caps highlight how companies like Sanofi prioritize profits over patient wellness and safety without federal regulations. 

Arguments Against Insulin Caps

Some critics of state-level insulin caps argue that the caps may lead to higher costs. In an article written by U.S. Representative Kevin Hern (R-OK), “regulations and price controls almost always result in higher health insurance premiums.” This occurs for various reasons; when prices are reduced, billing practices may change, providers may lower the quality of services, or undergo other actions to offset losses in revenue. In a study analyzing Utah’s insulin capping policy at $30 for a monthly supply, it was “found that patient insulin out-of-pocket costs decreased and insulin costs for the health plan increased.” However, it was noted in the study that the increase in insulin costs for the health plan may be offset by improved health, but longer periods of study would be required to investigate this possibility. 

A concern some critics raise is the possibility that state-level insulin caps will discourage research and innovation. A working paper from the National Bureau of Economic Research published in 2005 finds that if pharmaceutical research costs in the U.S. are cut by 40-50%, then less research and development projects will be pursued during early stages by an estimated 30-60%. Similarly, the Cardinal Team at the Cardinal Institute for West Virginia Policy argues that the outcome of these caps will be the “profits…funneled away from research and innovation.” 

Some point to biosimilar insulin as an alternative to state-level insulin caps. Biosimilar insulin is a similar version of FDA-approved insulin but is made with biological material like animal cells. The first rapid-acting biosimilar insulin was approved by the FDA in 2021. In a study published by the Journal of Diabetes Science and Technology, it was noted that the costs for developing biosimilar insulin “can be 10-20% of the price of developing a new biological entity” and that this “may allow more patients who are eligible…to be treated with these effective medications.” Another article estimates that “if there were a competitive biosimilar market, treatment with biosimilar insulins could cost [the] US $72–133 per year or less.” For those against insulin caps, biosimilar insulin is a relevant, effective alternative without the disadvantages of restrictive price laws.