So, how much does an uncontrolled Type II Diabetes patient really cost?

Patients with diabetes incur approximately $10,000 more in health-related costs than matched insured patients without diabetes. Those diagnosed with diabetes incur average medical spend of $16,752 per year, with about $9,601 attributed directly to diabetes. That's the average, with many diabetes patients accounting for many times that amount. On a public health level, “care for people with diagnosed diabetes accounts for 25% of all America health care dollars.”

More than 100 million Americans have diabetes or pre-diabetes. Diabetes therapy linked to HbA1c value contracting has yet to achieve scale and remains a largely underutilized, clinically valid cost reduction tool.

While there are many variables, this urgent public health question is just a practical mathematical problem. In the endless pursuit to lower A1c lab values and the Holy Grail of lowering escalating diabetes-related costs, it’s time for insurers and payers to “flip the table” by limiting brand diabetes Rx reimbursement to tiered performance payments for achieving and sustaining validated A1c outcomes on a per patient basis. There’s no other way out. Manufacturers, PBM and payers must demonstrate diabetes formulary value. Pronto!

It’s simple, right?

  1. The good news is that there is no shortage of quality diabetes-controlling generic and biosimilar medicines marketed by the same innovator pharmaceutical companies that also market brand name medicines. AWP? Forget about it. Rather, focus on packages of therapies, and hub-style services, that can be efficiently bundled on a per plan member basis. A payer’s reimbursement reward can be scaled to the degree of success in attaining maintaining, an appropriate A1c goal.
  2. We’ve come a long way from the early days of Medco-style disease management. Digital technology is transforming the practice of patient care, patient engagement, clinical pharmacy, and lab testing. Even beyond EHRs, newer simplified patient-centered clinical engagement platforms now connect providers and payers. Low-cost lab services exist to clinically validate and monitor A1c values directly from a patient’s home. No trip to Quest or Lab Corp, all without a phlebotomist, without an appointment, without a blood draw. All with CAP and CLIA accreditation and diagnostic quality. Continuous A1c outcomes transparency for diabetes populations has arrived.

What’s the catch?

So, instead of asking, how much poorly controlled type II diabetes patients cost, its more strategic to ask "how much is a well-controlled diabetes patient worth to the Payer/Insurer"? To society? To the patient with high deductible plans? To the PBM team managing the diabetes medication formulary? To society?

Reducing the costs of Type II Diabetes is worth a lot to public and private insurers. And manufacturers have the opportunity to shift to higher and more sustainable per patient reimbursement by getting paid primarily through A1c performance contracts for a defined proportion of a plan’s covered lives. That’s real value-based reimbursement.

Can it be done?

Pharma has the tool set right now: 

  1. Brand, generic, and biosimilar diabetes treatment portfolios
  2. Proprietary and licensed patient engagement services and programs
  3. Professionally staffed digital hub service resources designed to efficiently onboard patients, sustain adherence, and to support safe-use of medication

In seamless combination, one patient/insurer/payer at a time, it can be done.

Rob Dhoble


Adherent Health, LLC