Insulin Price - A Capitalistic Evil or A Necessary Raise?

Diabetes affects 37.3 million people in America and the only way these 37.3 million people can stay alive is by getting prescribed insulin. Insulin has made headlines not because of its life-saving abilities but because of its extraordinary prices. For the past eight years, the average cost of insulin has increased by 54%. Meaning that at a time, diabetic patients were paying $3944.28 annually. But now, they are paying $4412.27 annually. Hospitals end up having it worse as they need to spend $16,752, which is more than double the amount most hospitals spent in 2018. So why is insulin so expensive now? Is the price justified? Insulin prices are high due to the limited number of manufacturers synthesizing the drug allowing them to raise the cost of their product without worrying about any loss in revenue.

Insulin prices have increased because companies know they can receive more money while demand for their product stays the same. Insulin is a life-saving drug for diabetic patients and the only one of its kind in the global market. There is no ‘generic’ one for all insulin making it the main reason why prices skyrocket. Insulin is a biological drug that is made by extracting chemicals in certain types of bacteria. This is done by inserting the human gene for insulin in a bacteria’s plasmid DNA (where all of the genes are stored in a bacteria). Then, in a fermentation tank, the insulin produced by the bacteria is extracted.

Although biosimilars (the equivalent of generics but for biological drugs) exist, most of the vials tend to be more expensive as the price to make the insulin is much higher. Insulin is pricier due to patents on each manufacturer’s insulin products. In the insulin industry, three companies control the market. Eli Lilly, Novo Nordisk, and Sanofi have dominated the market since insulin was introduced and their long-lasting patents caused them to have a monopoly in the market. Even though America has laws that state that patents only last for twenty years in the market, those companies have found a way to make their patents last much longer through certain loopholes in the system (called evergreening). Since they have these patents, exact replicas of the product are not allowed to be made. Once the patents are exhausted, prices will plummet as more competitors enter the market.

The bigger question for the rise in the price of the life-saving chemical is: Is the price raise justified? Almost all diabetics believe that the cost of insulin is way too high for its own good. It is important to realize that the majority of diabetic patients come from low income families and the high prices of insulin do not help their chances of getting out of poverty. Middle class individuals are also affected by the high costs but not as vastly as the low income group. Low income families end up eating food with poor nutrition and high cholesterol content which is a leading cause of type two diabetes. The price raise being caused by companies’ greed for green is not a valid reason and the most that patients can do is plead and beg companies to reduce the prices. The chances of the companies listening to the voices of the people? Close to none.