In the past decade, insulin prices have reached exorbitant levels that many patients cannot afford, even with health insurance. While some of these costs are directly diverted to patients, a large portion of the inflated insulin price falls on private and public health insurance providers, including universities. Concomitantly, as some states eliminate or cap copays, universities providing health care plans are left to shoulder the entirety of these costs on their own while insulin manufacturers make staggering profits.

In New York, the insulin price was capped at $35 per monthly prescription for those without health insurance, leaving all the financial burden on public health care systems. In 2025, the state eliminated the insulin copay for people with state-regulated medical insurance. Because universities offer students these types of health insurance plans, self-funded universities now need to cover the entirety of insurance costs for students with diabetes.

As data shows, insurance costs went up proportionally with costs saved by patients after caps. Because of this, universities with external health care providers, including Binghamton University, may face rising premiums as insurers absorb costs from state-mandated insulin price caps. This could lead to contract renegotiations, cost-shifting to other services or adjustments in coverage tiers.

At Binghamton University, students are automatically enrolled in a health insurance plan unless they can provide evidence of equivalent coverage from another provider. These insurance plans are granted by United Health Care, where Tier 3 medication, including insulin, requires a copayment of $50 from students. With the cap now set at $35, the remaining $15 must be covered by either the insurance provider or the University. In practice, this implies that either one of these organizations will have to increase the price of their health insurance plans, which will ultimately still affect students. Notably, as insulin prices increase, this strategy becomes unfeasible for either students or health insurance providers.

The insulin pricing crisis is a free market gone wrong. According to an independent report by RAND, insulin prices in the United States are nine times higher than those of 33 other developed nations. Currently, insulin manufacturing costs range from $2 to $4, yet the shelf price reaches as much as $500 in some states and even $800 in others. This staggering price difference stems from something market analysts refer to as inelastic demand.

In a free market, price is indirectly regulated through supply and demand. When the supply exceeds the demand, prices inadvertently go down for said product to be sold by enticing buyers through cheaper costs and maintaining a competitive advantage, as other sellers also drop prices in these circumstances. However, when the demand is high, prices are likely to rise.

Yet demand is dictated by need. Somebody may want a new car but not need it. Hence, they may also not buy it. However, when talking about insulin, this product is something that patients need to live. Demand in this case is therefore constant, or inelastic, enabling pharmaceutical companies to drive prices high for profit. In the lack of state regulatory action, these companies are left unchecked and exploit this dependency to maximize their financial gain without concern for patient affordability. Now, this patient affordability seems to have reached a top ceiling.

According to research conducted at Yale University in 2022, over 14 percent of people needing insulin to survive had to spend 40 percent of their income solely on this life-saving drug. In 2018, when prices were noticeably lower compared to 2022, 25 percent of patients on insulin had to ration the medication due to costs.

In 2022, the Inflation Reduction Act set a cap on insulin copayments at $35 per month for those with Medicare. Nevertheless, since this benefit was granted only to those on federal insurance, costs were diverted to these organizations. This approach, therefore, does not cover university insurance plans. New York’s departure from federal legislation in 2023 and the subsequent elimination of copayments under state-regulated insurance plans in 2025 significantly alleviates the financial burden on students but not on universities and their health insurers, which now need to cover the additional costs.

In the absence of state-level intervention, the financial pressures caused by the cost of insulin triggered legal actions. Several states are now part of a Multidistrict Litigation (MDL No. 3080) against insulin manufacturers and pharmacy benefit managers who are accused of artificially raising the prices and blocking cheaper generic options to maximize profits.
Plaintiffs here include various states, local government entities and public bodies such as universities, which raised concerns about the significant increases in health insurance premiums for their students with diabetes. As universities often contribute to or fully cover health insurance for their students, these educational bodies are directly impacted by the rising medical costs.

Notably, this collective legal action makes one thing clear — there is a growing consensus among states and their educational institutions on the urgency of state-level interventions to effectively control and regulate insulin prices. Corporations are unlikely to exhibit pro-social behaviors without these regulatory actions and simply fall back on their for-profit agenda.

Yahn Olson is a skilled attorney working at Environmental Litigation Group, P.C., where he specializes in providing case evaluations and legal representation for those who have suffered due to corporate misconduct.

Views expressed in the opinions pages represent the opinions of the columnists. The only piece that represents the view of the Pipe Dream Editorial Board is the staff editorial.