The U.S. Prescription Drug Market Has Changed, But Our Assumptions About It Did Not

The way Americans buy prescription drugs has changed so much that many of the old assumptions we still rely on now have potential to work against us. Ideas such as "health insurance is here to help lower our costs" or "generics are cheaper than brand-name drugs" were once mostly true, but today, those ideas can actually trick people into spending more on prescriptions than they need to spend. Notably, a major study from the University of Southern California (USC) found that paying cash with no insurance [for generic drugs] is actually cheaper about 24% of the time—a surprising reminder that insurance isn't always the bargain we were taught to believe it is. (see link: https://schaeffer.usc.edu/research/u-s-consumers-overpay-for-generic-drugs/)

Part of the problem is that the U.S. drug‑pricing system is confusing by design. For example, drug wholesalers and retail pharmacies can choose from a stunning nine different pricing benchmarks when answering the seemingly simple question: "What does this [drug] cost?", and most of those pricing benchmarks are created by entities with a financial stake in the outcome. Only one of the pricing benchmarks, specifically known as NADAC (the acronym for "National Average Drug Acquisition Cost"), is independently calculated. With so many different competing "prices," it can be nearly impossible for patients to know whether they're getting a fair deal or if they are being robbed. (see the glossary link at: https://www.46brooklyn.com/glossary/ for more on drug pricing terminology)

U.S. insulin pricing has been especially distorted. For years, insulin manufacturers paid Pharmacy Benefit Managers (PBMs) multimillion dollar rebates in order to keep all competing insulins "off-formulary", which drove U.S. insulin prices through the roof. In June 2022, the Federal Trade Commission (FTC) stepped in, studied PBM business practices, published several interim reports including one which focused largely on the insulin market, proceeded to sue the PBMs and secured settlement agreements (the lawsuit specified the 'contemplated relief' the FTC was seeking) that may effectively alter the legally-exempted rebate‑kickback system. However, the FTC settlements were only finalized in 2026, hence they'll apply to new PBM contracts, but not to any existing contracts or contract renewals, so it will take time before U.S. patients necessarily benefit using insurance. As a result, insulin benchmark prices since have fallen sharply, and it is now possible for anyone to buy insulin for $35 per vial [or less] simply by cutting their insurance out of the transaction and paying cash with manufacturer coupons, but it may involve consciously taking insurance or your Medicare Part D plan OUT of the equation.

Even so, many people still believe that paying artificially-inflated pharmacy prices helps them to satisfy their deductibles faster. Unfortunately, that's not how the math works. Deductible credits are based upon the insurer's deeply-discounted, realized "net" prices for a drug—not the inflated amount patients are charged at the pharmacy counter. This means paying more doesn't necessarily get you closer to meeting your deductible.

Medicare Part D adds another layer of complexity. Plans can and do change their preferred insulin brand at any time without notice, forcing patients to non-medically switch to the preferred alternative unless the patients know how to navigate exceptions. Meanwhile, the U.S. insulin market itself is evolving thanks to the advent of follow-on biologic and biosimilar copies of branded insulin molecules. The FDA's updated approval pathway has led to a growing number of insulin copies. These products are often easier to switch to than switching to completely different analogues (such as switching to/from Novolog/Fiasp to Humalog/Lyumjev or vice versa), and they increase the market and pricing options by reducing dependence on just a few insulin manufacturers.

Also, coupon programs like TrumpRx.gov (which is powered by the coupon-generating website/app GoodRx, although the prices may be different) can offer even lower prices on certain insulins, including unbranded Lilly Insulin Lispro which can be attained for a price as low as $25 for a 10 mL vial. Results may vary by pharmacy, but manufacturer coupons remain a reliable fallback option for many people who require insulin.

The good news is that insulin manufacturer redundancy is now increasing. Lantus now has at least eight follow-on and biosimilar versions from different manufacturers, Novolog/Fiasp has three [so far], and Humalog has one copy. Even more are on the way from companies like Biocon Biologics, Civica/CivicaScripts, CalRx, Lanexa Biologics, Meitheal Pharmaceuticals, and Amphastar Pharmaceuticals to name a few. Wholesale Acquisition Costs (WAC) for nearly all branded and several biosimilar insulins fell by more than 70% in 2024-2025. If your out‑of‑pocket costs haven't dropped accordingly, it may be time to explore alternatives.

Conclusion

The U.S. prescription drug market is finally shifting in ways that matter to real people, but the system hasn't suddenly become simple or transparent. If anything, the recent changes make it even more important for those of us living with T1D, or caring for someone who does, to understand how prescription pricing really works and where the underlying price traps still exist. The old assumptions about insurance, deductibles, and "preferred" drug brands were created during a different era, and holding onto those beliefs now mostly benefits the entities that profit from confusion (such as insurance companies and their Pharmacy Benefit Managers or PBMs).

What's emerging instead is a landscape where patients now have more leverage than we've had in decades. Cash prices, manufacturer direct-to-patient sales, manufacturer coupons, biosimilar options, and new market entrants give us choices we never had before. The dramatic drop in insulin reference prices didn't happen because the system suddenly became benevolent; it happened because people and organizations pushed, regulators investigated and sued, and the old rebate‑driven pricing games finally began to show major cracks in its foundation. The lower prices only matter, though, if people know how to get them, compare them, and push back when insurance tries to steer them toward options that don't work for their bodies (or their wallets).

For a community that has spent years navigating a scarcity of manufacturers, unpredictability, and financial strain, this moment is worth claiming. We finally now have more alternatives. We finally have transparency starting to creep in. And by staying informed and connected, sharing what works, what doesn't, and what we've learned along the way, then we can make sure these changes translate into real, lasting affordability for everyone who depends on insulin to live.