For years, people with Type 1 diabetes in the United States have been told some version of the same thing at the pharmacy counter: that's not covered [by your insurance].
It didn't matter whether it was the insulin that worked best for your body or the continuous glucose monitor you relied on most. If it wasn't on your insurance company's formulary, it was effectively off-limits, unless you were willing to fight, appeal, or pay out of pocket.
That system, known as "formulary exclusion", is starting to disappear. And it is not because insurers suddenly decided to be more flexible. It is because they are being forced to change.
What's Changing, and Why It Matters
At the center of this shift is action by the U.S. Federal Trade Commission (FTC), which investigated how Pharmacy Benefit Managers (PBMs) decide which drugs and devices are covered. As you may realize, PBMs are the middlemen that create and manage formularies for insurance plans, and for years they have had enormous control over what patients can and cannot access, and what they are charged.
The FTC subpoenaed data from the PBMs, and learned that the decisions were driven primarily by legally-exempted rebate kickbacks from drug manufacturers. In simple terms, the products that paid the largest kickbacks were the ones most likely to be covered, while others were excluded even if they were generics with lower costs or worked better for certain patients.
After suing the largest PBMs, the FTC has since forced major changes. PBM companies like Express Scripts (owned by Cigna) and CVS Caremark/Aetna have already agreed to settlements that will fundamentally alter how formularies work. One of the most important outcomes is this: PBMs will no longer be allowed to maintain "exclusionary formularies" that block clinically appropriate alternatives simply because they do not generate large rebate kickbacks for the PBMs. Patients will now have access to a wider range of insulins, CGMs, test strips, glucagon rescue kits and other diabetes-related treatments. Non-preferred products may still cost slightly more out-of-pocket, but coverage will no longer be outright denied, restoring real therapeutic choice.
What This Means for Insulin
For people with Type 1 diabetes, this change is especially important when it comes to insulin.
Many patients have been forced to non-medically switch between different rapid-acting insulins because of formulary changes. If your plan "preferred" one product over another, that was usually the end of the discussion, even if your blood sugars were better managed using something else.
As formulary exclusions go away, that dynamic begins to shift. When your doctor prescribes a specific insulin, your insurance will be more likely to cover it. Instead of being limited to a single "preferred" option, patients will soon be able to choose from multiple insulins within the same therapeutic category. Some covered options may still cost slightly more out-of-pocket, but the key difference is that your choice is no longer completely blocked by rebate-driven restrictions.
This means you'll be able to select based on how the insulin actually works for you, such as how fast it acts, how predictable it works, and how well it matches your physiology rather than which manufacturer paid the PBM the biggest kickback. For many patients, that level of choice simply has not existed.
It Doesn't Stop at Insulin
The same changes apply to diabetes technology. CGMs only became available under patients' pharmacy benefits starting around 2021, and since then, formulary design has increasingly influenced which systems are covered. In some cases, patients have been steered toward one system over another not because of clinical differences, but because of how contracts and rebate arrangements were structured.
If your insurance plan favored a system from Dexcom, then alternative options such as Freestyle Libre from Abbott might have been effectively unavailable, and vice versa.
With the FTC litigation and settlements dismantling these exclusionary formulary practices, patients can now potentially access a wider range of CGMs, even if some may still have slightly higher out-of-pocket costs. This expands therapeutic choice, allowing patients to select devices based on factors other than rebate arrangements with their insurance company's PBM. The same principle applies to other parts of diabetes care, including glucagon, test strips, and certain medications that were historically excluded for financial rather than clinical reasons.
A Shift Toward More Choice
At the same time that exclusions are going away, pricing is becoming more transparent.
Programs like TrumpRx (which is powered by GoodRx https://www.businesswire.com/news/home/20260205677365/en/GoodRx-Powers-Pricing-for-Leading-Brand-Medications-on-TrumpRx/), make it possible to access certain medications at straightforward cash prices that may be lower than what insurance has historically offered. Importantly, under the FTC settlement agreement with Express Scripts, payments made through TrumpRx will be required to count toward your deductible and out-of-pocket maximums. This means that using TrumpRx won't just save money upfront—it also counts toward your overall insurance protections, giving patients both more choice as well as meaningful financial credit.
This creates a new layer of flexibility and complexity. In some cases, patients may still choose to use their insurance. In others, they may decide it is preferable to pay cash due to lower prices, or they prefer unbranded Lilly Insulin Lispro offered through TrumpRx instead of the Novo Nordisk insulin preferred due to kickbacks paid to their insurance company's PBM. Either way, the key difference is that there are now real options that respect both patient choice and offer financial protections.
What About Medicare?
For people on Medicare, these changes still matter, but come with some added complexity.
Insulin costs are currently capped at $35 per month for Medicare Part D, which provides important protection. But as lower cash prices on different insulins become more widely available, some patients may face a choice between using that cap, or paying less through a direct pricing option (or using a preferred insulin, rather than the one paying the biggest kickback to their Part D administrator). Maybe their Part D plan administrator prefers Novo Nordisk or even Biocon Biologics insulins, but the patient prefers a Lilly insulin.
The trade-off is that cash purchases do not count toward annual out-of-pocket limits under Part D. While you might save money in the short-term, although it could affect your overall costs later in the year. It is not a simple decision, but it is also not a choice most patients have ever had before.
The Bigger Picture
You may hear about new legislative proposals, like the INSULIN Act of 2026, which aims to lower insulin costs for patients covered by commercial health insurance. But one of the biggest barriers patients have faced, specifically "formulary exclusions", is already being dismantled through government litigation led by the FTC. Nevertheless, by disabling "formulary exclusions" will result in more therapeutic options being available to patients.
Earlier laws like the American Rescue Plan Act of 2021 also played a key role by removing an arbitrary cap on rebates reimbursable to Medicaid, helped to make insulin more affordable for everyone, and improved price transparency for patients.
For years, access to diabetes treatments in the U.S. was shaped by a system that limited choice so much that many came to accept that as normal. That system is now changing.
For years, decisions about your diabetes care have often been made by someone you have never met, based on financial incentives you were never shown. That is starting to change. As formulary exclusions are dismantled, the ability to choose your insulin, your CGM, and your overall treatment approach is moving back where it belongs: with you and your doctor. For many people living with Type 1 diabetes, that kind of control has been out of reach. Now, it is becoming possible.
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