Why Are People Paying More to Manage Their Diabetes

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The out-of-pocket cost to manage diabetes is going up. Or is it?

New research from GoodRx finds that the average out-of-pocket cost for diabetes medications has increased by more than 129% since 2018. That's the amount a person (even with insurance) would pay at the pharmacy for their medication(s).

You'd think that this means that the price of insulins is rising. But nothing is that simple when it comes to healthcare.

So, what does this increase really mean? To be sure, the cost of managing diabetes is going up. But only those taking the newest, most innovative medications will likely be feeling this increase.

Let's dive deeper.

People are paying more out of pocket for the newer, innovative medications

People with Type 2 diabetes may take a host of medications to manage their condition. For example, they might take an insulin with a newer class of medication like a SGLT2 inhibitor or a GLP-1 agonist.

This cocktail greatly contributes to the out-of-pocket burden that people face every month.

The chart below details how much people spend (with or without insurance) on average each month at the pharmacy for popular classes of diabetes medications. Some classes of diabetes drugs, such as GLP-1 agonists, stand out.

So why do some classes seem to cost more and have more volatile pricing than others?

For one, insurance coverage plays a huge part in how much someone will pay out of pocket every month. GLP-1 agonists, for instance, have the highest out-of-pocket costs - even more than insulins. Many may be paying high out-of-pocket costs for these medications because they're not covered under their insurance plan.

In fact, a report from the obesity care provider Found observed that coverage for GLP-1 agonists declined from 27% in 2022 to 12% in 2023. They attribute most of this decline to an increase in demand for the medication.

Out-of-pocket prices can also vary when the price of a medication fluctuates, or if insurance adds or drops that drug from its formulary. People may also see their monthly costs rise if they switch to a more expensive medication or take more medications.

Seasonality also affects out-of-pocket costs. At the beginning of the calendar year, deductibles reset. So out-of-pocket spending is at its highest. Throughout the year, this spending decreases as people meet their deductibles and their insurance starts to absorb more of these prescription costs.

However, the out-of-pocket maximums reset each year, creating the cyclical pattern of out-of-pocket spending on medications seen in the graph above. This can lead to even higher prices at the beginning of the year. If people are aware of this cyclical nature, they can set aside additional funds at the beginning of the year, or take advantage of their flexible spending account (FSA) or health savings account (HSA).

Prices for older medications have remained steady

In contrast to the volatile newer diabetes drug classes, the cost of older medications like biguanides and glitazones have remained relatively inexpensive and stable over the last couple of years.

These classes, which include medications such as metformin and pioglitazone, respectively, have been around for several years. In addition, these medications are inexpensive to produce, coming in forms such as pills and oral solutions. All of these factors may contribute to their consistent affordability.

The data also reveals that average monthly out-of-pocket costs for insulins have remained relatively stable from 2018 through 2023. People should expect this pattern of stability to continue - and perhaps a decrease in prices. Insulin manufacturers Eli Lilly and Sanofi put in place $35 out-of-pocket spending limits for commercially insured people on their insulin medications. These limits will begin to go into effect in late 2023 and into early 2024.

The expensive, innovative medications are increasingly popular

Above we saw that newer, more innovative medications tend to cost more. And they're becoming more popular.

GLP-1 agonists, for instance, have seen a substantial rise in fills since 2021. While some of this increase is likely due to off-label prescribing for weight loss, more clinicians are prescribing these newer therapies to help people more effectively manage their diabetes and other chronic conditions. These people may have other comorbid conditions, leading to even more prescriptions and even higher out-of-pocket costs.

Mounjaro has seen the highest cost increase

People taking Mounjaro are paying more out of pocket than ever before. Mounjaro was the first medication approved in the new GIP receptor / GLP-1 receptor agonists class, hitting the market in mid-2022. But it is only FDA approved for the management of Type 2 diabetes.

It's clear that this class is seeing the largest spike in out-of-pocket costs. And yet again, the reason mostly boils down to insurance. It's likely that people taking these newer medications may find that their insurance has never covered, or is no longer covering, this class of drugs. So they are forced to pay more out of pocket, and many are likely covering the full cost on their own.

What's more, Medicare excluded coverage for weight-loss medications for people who are prescribed medications for obesity but have not developed diabetes. While there is some debate over covering weight-loss medications, preventing patients from accessing them by removing coverage will likely lead to higher costs for the healthcare system overall.

Going forward, it's important to keep in mind that the price of a medication isn't the only factor in what a person pays out of pocket. For instance, if the price of a medication declines, people may still find themselves paying a hefty price tag if their insurance doesn't cover that medication. On the other hand, if the price of a medication spikes, insurance coverage can help shield people from this rise.

How can you save?

According to our research, patients are now paying over $30 per fill out of pocket for their diabetes medications. This is up from $13 in 2018. While there are some generic diabetes medications on the market, they aren't available for everyone. So, how can people save?

First, if your insurance doesn't cover a newer medication, you can submit an appeal to your insurance provider to reconsider their coverage decision. The medication's manufacturer may also offer a savings program, such as a copay card, that could help lower the cost of treatment.

If your insurance doesn't budge and manufacturer financial support is unavailable, talk with your healthcare professional to see whether a more affordable medication is possible. This may involve taking older medications that have cheaper generic alternatives. You can also explore prescription coupons through GoodRx.

Like we mentioned earlier, out-of-pocket spending on prescription medications is cyclical. On average, people spend the most at the beginning of the year before they meet their deductible. So contributing to a flexible spending account (FSA) could be a budgeting option. With an FSA, you contribute monthly but have access to the funds immediately. This could help offset high out-of-pocket costs until you meet your deductible and insurance takes over.

Methodology

Share of prescription fills:Using a representative sample of U.S. prescription fills, we calculated the fill count for different classes of diabetes medications. Share of total claims was calculated by taking the fill count for medications in a particular class as a percentage of fills for all Type 2 diabetes medications. Share of claims was calculated by month over the period of January 1, 2018 to December 31, 2023

Out-of-pocket payment amount: Using a representative sample of U.S. prescription fills, we calculated the average out-of-pocket patient responsibility. This amount refers to any copay, coinsurance, deductible amount, or other form of payment for which the person is fully responsible. This sample only includes commercial insurance claims, excluding other forms of coverage such as Medicare or Medicaid. Out-of-pocket payment is reported by month from January 1, 2020 to December 31, 2023.

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