Abubakr Buleshov | 24.04.2025
Eli Lilly, Insulin, and the Price of Profit
Insulin, a lifesaving drug discovered over a century ago, has become unaffordable for millions of Americans, largely due to the pricing strategies of Eli Lilly, a pharmaceutical giant dominating the insulin market. An American pharmaceutical company headquartered in Indianapolis. The company was founded in 1876 by Eli Lilly (a pharmaceutical chemist, Union army veteran during the American Civil War). This company is ranked 127th on the Fortune 500 (a list of the largest 500 companies in the United States ranked by total revenue). By 1923, Eli Lilly was the first company to sell insulin commercially.
With increasing insulin prices over the past two decades, Eli Lilly has controlled the insulin and pharmaceutical market in the US. The company’s control has led to inflated prices, putting patients’ lives at risk.
As insulin is an inelastic good, as it is essential for people with diabetes to sustain life, an increase in price wouldn’t change much in the demand for insulin.
Eli Lilly uses the fact that insulin is an inelastic good to their advantage; Many patients, particularly in the United States where healthcare is privatized, have struggled to afford their medication. Cases of individuals rationing insulin (A Yale study in 2018 found that 1 in 4 Americans with diabetes reported rationing their insulin due to high costs.) sometimes with fatal consequences had triggered public criticism of Eli Lilly. The public has accused Eli Lilly and other major insulin manufacturers of prioritizing profits over people’s lives.
The price of Eli Lilly’s Humalog insulin increased by over 1,200% between 1996 and 2019 — from $21 per vial to around $275 per vial in the US. In contrast, producing a vial of insulin costs as little as $3 to $6.
Eli Lilly, along with Novo Nordisk and Sanofi, forms a powerful oligopoly that controls over 90% of the global insulin market. Among these, Eli Lilly holds a significant share specifically in the US insulin sector, particularly through its popular product Humalog. While Eli Lilly is not the sole producer of insulin, its pricing strategies and long-standing dominance are features of a monopolistic market. Economically wise, a monopoly is when one company has enough market power to set prices without losing a major amount of customers, which is noticeably obvious in Eli Lilly’s repeated insulin price rises over the past two decades. Even though legal this is not a monopoly, the lack of proper competition and the inelastic demand for insulin have allowed Eli Lilly to act as a price maker.
Another main property which shows Eli Lilly’s dominance in the market is that Eli Lilly has bought out several biotech companies to strengthen its position in the diabetes and insulin market. In 2021, Eli Lilly obtained Protomer Technologies, a company specializing in glucose-responsive insulin, for ~1$ billion. This investment was aimed at innovating their product to be a preferred choice in consumers. Building on this, in 2023, Eli Lilly also bought Sigilon Therapeutics, another biotech firm helping people with diabetes.
In conclusion, Eli Lilly’s dominant part in the insulin market has raised serious ethical, economic, and social concerns. While Eli Lilly’s innovations have undoubtedly advanced diabetes treatment, their aggressive pricing tactics highlight the urgent need for regulatory oversight to ensure insulin remains accessible to all who depend on it.
Sources:
American Diabetes Association (ADA)/ Congressional Hearing Reports
Yale University Study
CNN and CBS news
With increasing insulin prices over the past two decades, Eli Lilly has controlled the insulin and pharmaceutical market in the US. The company’s control has led to inflated prices, putting patients’ lives at risk.
As insulin is an inelastic good, as it is essential for people with diabetes to sustain life, an increase in price wouldn’t change much in the demand for insulin.
Eli Lilly uses the fact that insulin is an inelastic good to their advantage; Many patients, particularly in the United States where healthcare is privatized, have struggled to afford their medication. Cases of individuals rationing insulin (A Yale study in 2018 found that 1 in 4 Americans with diabetes reported rationing their insulin due to high costs.) sometimes with fatal consequences had triggered public criticism of Eli Lilly. The public has accused Eli Lilly and other major insulin manufacturers of prioritizing profits over people’s lives.
The price of Eli Lilly’s Humalog insulin increased by over 1,200% between 1996 and 2019 — from $21 per vial to around $275 per vial in the US. In contrast, producing a vial of insulin costs as little as $3 to $6.
Eli Lilly, along with Novo Nordisk and Sanofi, forms a powerful oligopoly that controls over 90% of the global insulin market. Among these, Eli Lilly holds a significant share specifically in the US insulin sector, particularly through its popular product Humalog. While Eli Lilly is not the sole producer of insulin, its pricing strategies and long-standing dominance are features of a monopolistic market. Economically wise, a monopoly is when one company has enough market power to set prices without losing a major amount of customers, which is noticeably obvious in Eli Lilly’s repeated insulin price rises over the past two decades. Even though legal this is not a monopoly, the lack of proper competition and the inelastic demand for insulin have allowed Eli Lilly to act as a price maker.
Another main property which shows Eli Lilly’s dominance in the market is that Eli Lilly has bought out several biotech companies to strengthen its position in the diabetes and insulin market. In 2021, Eli Lilly obtained Protomer Technologies, a company specializing in glucose-responsive insulin, for ~1$ billion. This investment was aimed at innovating their product to be a preferred choice in consumers. Building on this, in 2023, Eli Lilly also bought Sigilon Therapeutics, another biotech firm helping people with diabetes.
In conclusion, Eli Lilly’s dominant part in the insulin market has raised serious ethical, economic, and social concerns. While Eli Lilly’s innovations have undoubtedly advanced diabetes treatment, their aggressive pricing tactics highlight the urgent need for regulatory oversight to ensure insulin remains accessible to all who depend on it.
Sources:
American Diabetes Association (ADA)/ Congressional Hearing Reports
Yale University Study
CNN and CBS news
