I always carry insulin etc in hand luggage, and rarely even bother mentioning it beyond the check in desk. A couple of times security has queried what it was on the scanner, but it's never been an issue.
I don't carry a doctor's letter - I've got an "Insulin user's ID card" from Diabetes UK that I've had for 10+ years now. Looks nice and official.
My only 1 time I had any real concern was coming back to the UK 4 days after 9/11, when security was jumpy. But after a quick chat they were happy enough.