I’ve done a quick literature search from 2015 onward. What I’ve found has not impressed me about the potential for C-peptide replacement. (The usual qualifications: I don’t specialize in this, and scholars outside their own fields often look like idiots.)
Briefly, C-peptide has been linked in early studies with reducing retinal, kidney, and nerve damage in T1D (e.g., this paper reviewing its potential as a therapy for kidney disease). These studies are at least based on reasonable guesses given our mechanistic understanding of what C-peptide does, molecularly.
The situation with respect to T2D is far less clear and I would not assume based on what I have read that it works the same as in T1D–see here for the role of C-peptide in T2 as well as the abstract of this paper.
As for therapies, there seems to be good reason why research into them has dropped off. This, from 2017, is the best review of the then-current literature and it offers what I think are plausible reasons why it stalled out. Two of them are methodological, having to do with the variable purity and formulation of the C-peptide used in replacement studies. This is a huge problem in molecular biomedicine. The third is a fundamental problem I’ve mentioned before, namely whether the standard animal model of T1 is a good analogue of what happens in human diabetics, especially those who have had the disease for a long time. An example of the kind of inconsistencies they found:
“C-peptide proved to be effective in improving motor nerve conduction velocity (MNCV), a common metric of nerve damage in diabetes, in both the STZ and BB/Wor rat. However, in a study titled ‘‘Amelioration of Sensory Nerve Dysfunction by C-Peptide in Patients With Type 1 Diabetes’’ the authors report no improvement in MNCV in humans following 12 weeks of C-peptide treatment. Similarly, in 2015 it was published that a PEGylated C-peptide analogue (Peg-C-peptide) was able to significantly prevent losses in sensory nerve conduction velocity, paw thermal response latency, and other indices of peripheral neuropathy in STZ mice. However, in 2016 it was published that a large-scale 12 month human trial of Peg-C-peptide showed no improvement in sural sensory nerve conduction velocity in Type 1 Diabetic patients when compared to placebo.”
It’s hard to disagree with the conclusion the authors draw: “Clearly, there are stark inconstancies between the diabetic-animal model and the diabetic human, and these inconsistencies have repeatedly caused misperceptions in the efficacy of diabetic treatments.”
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