Professionalism/Insulin: The Deadly Price

Background: Diabetes and Insulin
Diabetes is a chronic disease that results in an excess of sugar in the blood. Insulin is a hormone that regulates blood glucose levels, and in diabetes, the body’s ability to make or use insulin is impaired. This can lead to serious health problems such as heart disease and kidney disease and when it is not treated it is fatal. There are two types of diabetes; type 1 and type 2. Type 1 diabetes is an autoimmune disease, in which the pancreas makes no insulin. Type 1 diabetes is also known as juvenile diabetes or insulin-dependent diabetes, and can be caused by genetics or by a virus. Type 1 diabetes has no cure, and treatment is directed toward managing sugar levels in the blood using insulin, as well as changes in diet and lifestyle. Glucose is a main source of energy for cells in muscle and tissue, and is enters cells from the bloodstream with the help of insulin. Low blood sugar results in the pancreas putting less insulin into the bloodstream. In type 1 diabetes, there is no insulin to move glucose from the bloodstream into the cells. Sugar then builds up in the bloodstream, causing complications. Type 2 diabetes develops from habit, and is when the pancreas makes less insulin as well as having developed resistance to insulin. It is more common in older adults, and can be caused by obesity. In type 2 diabetes, the role of insulin doesn’t work well, and sugar builds up in the blood. With higher blood sugar, the pancreas releases more insulin, and eventually the pancreas cannot make enough insulin for the body’s needs.

There are two types of insulin; natural insulin and synthetic “human” insulin. Natural insulin is an essential hormone made by the pancreas that helps the body turn food into energy while balancing blood sugar levels, helping glucose from blood move into cells in the body. Synthetic “human” insulin is a prescribed injectable, made to act like naturally produced insulin to help those with diabetes. It helps stop the liver from producing more sugar than the body can handle. Insulin was discovered in 1921 by Frederick Banting and Charles Best, where it was first isolated from the pancreas. After initial success in a dog, insulin was tested in 14 year old Leonard Thompson, whose blood sugar dropped to normal levels. Before this discovery, all children with diabetes died within 1-2 years of diagnosis, with no effective treatments and harsh diets.

Previous production of insulin consisted of extracting insulin from the pancreas of cows and pigs that were slaughtered for food. Now, insulin is produced industrially with recombinant DNA. Recombinant DNA technology is when human genes can be inserted into genetic material of a common bacterium, where the recombinant microorganism is then able to produce the protein encoded by the human gene. The human insulin gene is created in the laboratory. A loop of bacterial DNA known as a plasmid is removed and the human insulin gene is inserted into the plasmid. The plasmid is then returned to the bacteria and the recombinant bacteria is put in large fermentation tanks. The recombinant bacteria uses the gene to produce human insulin, where it is then harvested for medicine.

Timeline of Insulin
Over the last 30 years, the price of insulin has skyrocketed. In 1996, insulin was considered affordable, at $24 per vial. In 2023, the cost of insulin ranges from $65 to over $300, depending on the type of insulin. A timeline of the discoveries and associated prices paints the picture of the dramatic increase in cost over the last century.

1889 : Oskar Minkowski and Joseph von Mering, German researchers, conducted experiments on dogs. They removed the pancreas from the dogs, causing the dogs to develop symptoms of diabetes. The dogs quickly died after the pancreatic removal. Minkowski and von Mering concluded that the pancreas was where "pancreatic substances" were produced.

1910: Sir Edward Albert Sharpey-Shafer coined the term "islets of Langerhans," which were responsible for producing insulin.

1921: Frederick Banting and Charles Best were able to extract insulin from a dog's pancreas. Banting and Best sold the patent to the University of Toronto for only $1. They believed it was unethical for a doctor to profit from a discovery that could save lives.

1922: Mass production of insulin extracted from pigs and cows used to produce vials for diabetic patients. Eli Lilly became the largest producer of insulin. The cost of insulin was approximately $9 per vial for insulin.

1982: Recombinant DNA technology was introduced to E. coli to produce human insulin. Price increased to $14 per vial.

1996: Insulin analogs introduced. Analogs are designed to mimic the body's natural pattern of insulin release. The analogs are completely synthetic. Humalog insulin, produced by Eli Lilly, price listed at $24 per vial.

2019: Humalog insulin cost $332. Price of production ranges from $2-4.

Based on the timeline, insulin price increases correlated with new discoveries related to insulin. Currently, the average price of insulin is $275 per vial. 13 vials of insulin are required per year per diabetic to survive. Solely looking at covering the cost of production, it would cost $71 for a year supply of insulin. However, the current price of insulin comes out to $3575 for a year supply of insulin. The profit margin is 98% on insulin.

Insulin Monopoly
The insulin price increase can be initially understood by analyzing the industry of insulin production. Currently, there are 3 pharmaceutical companies that own 95% of the insulin market: Eli Lilly, Sanofi, and Novo Nordisk. Governments have given 100% of the supply of insulin control to these three companies. These pharmaceutical companies use 3 main arguments to justify the high prices of insulin, but are illogical: high cost of development, free market economy pricing, and high costs are essential for continued innovation. First, the high cost of development is not relevant to insulin because the drug is over 100 years old. Second, there is no free market economy for a product (insulin) where the customer (diabetic) is not in a position to negotiate price, because they need the product to survive. Third, the high costs are not essential for innovation. Inherently there is limited innovation with insulin, and the need for affordability is more pressing.

The insulin monopoly has been the status quo and is the contributor to insulin’s high cost. Governments have historically been hesitant to impose price caps because insulin companies have halted production of insulin and shut down entire factories in protest to government sanctions. In the 1980s, Argentina was going through an inflation crisis of up to 800%. To combat this, the government placed price controls on all products, including insulin. Argentina’s only insulin-producing company at the time was Eli Lilly, who closed their insulin-producing plants, creating a sudden insulin shortage for 73,500 men, women, and children. The company eventually returned to Argentina in the 1990s, due in large part to a new convertibility exchange policy, which pegged the Argentine peso to the US dollar.

Insulin is still out of reach for many Americans, but there are possible solutions at the state and federal policy level :


 * Protection against monopoly.
 * Reforms to the regulatory and legal processes that prevent generics and biosimilars from entering the market.
 * Reforms to the patent system to prevent abuse.
 * Creation of an agency to oversee pricing.
 * Nonprofit generic manufacturing.
 * Creation of laws that provide access to affordable insulin in cases of emergency.
 * Greater advocacy from professional and patient organizations.

Insulin Price Capping
There are several strides being made to cap the price of insulin, both by companies and the government. Several members of Congress have made proposals to address insulin pricing - such as creating a generic insulin manufacturing plant owned by the federal government, or by proposing legislation to create an insulin pricing model. In January 2019, Congress held hearings on insulin prices with insulin company executives and launched a bipartisan probe in the next month. State governments have also been contributing to the fight against insulin prices. In 2019, Colorado became the first state to legislate a price cap on insulin, with several other states following suit. In 2017, Nevada passed legislation to mandate insulin pricing transparency. In 2022, the passing of the Inflation Reduction Act capped the price of insulin at $35 per month for diabetics covered by Medicare. A proposal to do the same for diabetics with private insurance was killed in the senate, with certain members of Congress claiming that capping insulin will hurt competition in business and innovation in research. In President Biden’s 2023 State of the Union Address, he called for this cap to be extended to those with private insurance.

Insulin companies initially took smaller strides to insulin price capping, but have started to take bigger leaps. In a 2019 response to mounting public pressure, Eli Lilly announced it would provide a generic version of its insulin analog Humalog. This generic version is identical to Humalog, but would cost half the price. Since then, Novo Nordisk announced it would also sell a generic version of their insulin analog Novolog at half price, and Sanofi announced it would cap insulin at $99 a month for those without insurance. Following the passing of the Inflation Reduction Act and industry competition, Eli Lilly announced that they would cap insulin prices at $35 a month. The cap went into effect immediately, and has already encouraged other companies to do the same.