Trends in Medicaid Reimbursements for Insulin From 1991 Through 2014

Abstract

Importance: Insulin is a vital medicine for patients with diabetes mellitus. Newer, more expensive insulin products and the lack of generic insulins in the United States have increased costs for patients and insurers.

Objective: To examine Medicaid payment trends for insulin products. Cost information is available for all 50 states and has been recorded since the 1990s.

Design, setting, and participants: A time-series analysis comparing reimbursements and prices. Using state- and national-level Medicaid data from 1991 to 2014, we identified all patients who used 1 or more of the 16 insulin products that were continuously available in the United States between 2006 and 2014. Insulin products were classified into rapid-acting and long-acting analogs, short-acting, intermediate, and premixed insulins based on American Diabetes Association Guidelines.

Main outcomes and measures: Inflation-adjusted payments made to pharmacies by Medicaid per 1 mL (100 IU) of insulin in 2014 US dollars.

Results: Since 1991, Medicaid reimbursement per unit (1 mL) of insulin dispensed has risen steadily. In the 1990s, Medicaid reimbursed pharmacies between $2.36 and $4.43 per unit. By 2014, reimbursement for short-acting insulins increased to $9.64 per unit; intermediate, $9.22; premixed, $14.79; and long-acting, $19.78. Medicaid reimbursement for rapid-acting insulin analogs rose to $19.81 per unit. The rate of increase in reimbursement was higher for insulins with patent protection ($0.20 per quarter) than without ($0.05 per quarter) (P<.001).Total Medicaid reimbursements peaked at $407.4 million dollars in quarter 2 of 2014. Total volume peaked at 29.9 million units in quarter 4 of 2005 and was 21.2 million units in quarter 2 of 2014.

Conclusions and relevance: Between 1991 and 2014, there was a near-exponential upward trend in Medicaid payments on a per-unit basis for a wide variety of insulin products regardless of formulation, duration of action, and whether the product was patented. Although reimbursements for newer, patent-protected insulin analogs increased at a faster rate than reimbursements for older insulins, payments increased for all products we examined. Our findings suggest a lack of price competition in the United States for this class of medications.