Estimation of the Share of Net Expenditures on Insulin Captured by US Manufacturers, Wholesalers, Pharmacy Benefit Managers, Pharmacies, and Health Plans From 2014 to 2018

IMPORTANCE: Recent US media and policy attention on insulin affordability has focused on the role of manufacturers in setting prices; however, the role of other drug distribution intermediaries in determining prices has received less attention. OBJECTIVE: To estimate the share of net expenditures on insulin captured by manufacturers, wholesalers, pharmacy benefit managers, pharmacies, and health plans from 2014 to 2018. DESIGN, SETTING, AND PARTICIPANTS: This cross-sectional study of the US insulin market was conducted in 2020 using 2014-2018 data from multiple sources, including list and estimated net prices from SSR Health for 32 insulin products, mean use weights from a commercial pharmacy claims database, mean acquisition costs and reimbursements from the Centers for Medicare & Medicaid Services, mean spread and share of rebates retained by pharmacy benefit managers from state Medicaid and drug transparency reports, and profit margins from the public filings of distribution system participant companies. Participants were insulin manufacturers, drug wholesalers, pharmacies, pharmacy benefit managers, and health plans. MAIN OUTCOMES AND MEASURES: Mean list and net insulin prices, mean net expenditures on insulin, share of expenditures retained by each distribution system participant. RESULTS: Between 2014 and 2018, mean list prices of 32 insulin products increased by 40.1% (from $19.60 to $27.45), while mean net prices received by manufacturers decreased by 30.8% (from $10.53 to $7.29). Net expenditures per 100 units of insulin increased by 3.2% (from $15.11 to $15.59) while the share of a hypothetical $100 insulin expenditure accruing to manufacturers decreased by 33.0% (from $69.71 to $46.73) and the share accruing to health plans decreased by 24.7% (from $13.82 to $10.40). The share of insulin expenditures retained by pharmacy benefit managers increased by 154.6% (from $5.64 to $14.36), the share retained by pharmacies increased by 228.8% (from $6.21 to $20.42), and the share retained by wholesalers increased by 74.7% (from $4.63 to $8.09). CONCLUSIONS AND RELEVANCE: Results of this cross-sectional study of the distribution of insulin expenditures suggest that policies to control insulin costs should consider all entities throughout the insulin distribution system. Manufacturers represented a decreasing share of insulin expenditures, and pharmacies, pharmacy benefit managers, and wholesalers accounted for a growing share; all entities play a role in increasing insulin costs.