Thursday, October 1, 2020

The Diabetes Industry

 

    Anyone paid $250 for half an ounce of water recently? Didn’t think so. When Trump, between shouts and interruptions made the outrageous claim that “He” had made insulin as “cheap as water”, insulin dependent persons who had ever voted for him must have been at least a little surprised.  With a coupon, Humalog insulin right now, as I write, costs $230 for a box of five 3 milliliter shots. That’s about half an ounce. “But”, you will say in his defense, “So he exaggerated a little.”  No, Jethro, he lied his ass off!

    Like Polio vaccine, insulin was seen by its discoverers as so important a breakthrough that profiting from it would be immoral. Three researchers discovered insulin back in 1921.  Dr. Frederick Banting and Charles Best were the main two, along with Dr. James Collip — all three had their names attached to the patent awarded in January 1923 to their method of making insulin. Their original intellectual property rights were sold for just $3 Canadian. When the researchers were ready to turn over the patent of their discovery to the University of Toronto for production purposes in 1923, they agreed to receive only $1 each (the equivalent of $14 today) in compensation.

    Here’s a narrative of the early days from a 2002 article: “For $1.00 to each, the three discoverers assigned their patent rights to the Board of Governors of the University of Toronto. The application had stressed that none of the other researchers in the past had been able to produce a nontoxic anti-diabetic extract. A patent was necessary only to restrict manufacture of insulin to reputable pharmaceutical houses who could guarantee the purity and potency of their products. It would also prevent unscrupulous drug manufacturers from making or patenting an impotent or weakened version of this potentially dangerous drug and calling it insulin.”

    The university granted Lilly several and other pharma companies the right to make it, royalty-free, and also offered them the ability to improve the original formulation and patent anything they created down the road.

    Looks like Insulin should be really inexpensive, right? That’s before the “business” of diabetes was invented. Lilly who owns the patent in Humalog, a synthetic insulin, admits to shareholders that their profits have recently been driven by arbitrary price hikes to Insulin. Of course, there is little market pressure on the drug, since neither Medicare nor Medicaid can, by law, bargain cheaper pricing. The VA, as an example does negotiate drug prices, however; this results in a 30-day supply of Humalog insulin for about $8.

    Once upon a time, drug companies used to claim that R & D costs were what made drugs costly. This simply isn’t true for any major drug company at present. What’s today’s number one on the cost side of the balance sheet? Advertising!   Well, OK then, perhaps insulin is just expensive to produce, right? Wrong again Rufus. A 2018 study estimated that one vial of human insulin costs $2.28-$3.42 to produce, and one vial of analog insulin costs $3.69-$6.16 to produce. Meanwhile a vial (the same 10 ml size) of the human insulin retails at $95 and the analog at $185. I did the math, since it’s easy. That’s a 3000% profit per vial for analog insulin.  The 2018 study concluded   that a year's supply of human insulin could cost $48-$71 per patient, and analog insulin could cost $78-$133 per patient per year.  The dismal reality is that for most patients 3 vials a month is typical, meaning the yearly retail cost of diabetes for an analog insulin user could be $6,660 annually (might well be less to the patient depending on insurance, but someone’s going to pay)! For the drug company that equates to quite a handsome profit, as is, but wait…there’s more.

        Considering the success of the Epi-pen and the huge profit to be made for selling a simple plastic auto injector at another huge profit, Lilly also sells the Kwik Pen. Does the same thing a syringe does, hurts about the same as a plastic disposable syringe but costs sooo much more. This is from Lilly’s own web site: “The list price1 of a 5-pack of 3 mL Humalog U-100 KwikPens (15 mL or 1,500 units) is $530.40.”  Again, breaking it down, three of these packs would be an average monthly dosage. Yes, that’s right, the annual cost of diabetes if you pay retail and use Kwikpens is over $19,000!  That’s a bit more than the cost of water.

        The coda to this song of woe is that contrary to Trump’s blustering, he didn’t do jack to lower drug costs. Some governors, Colorado’s as an example, have, however by simply banning the sales of insulin at more than $100 monthly. And here’s the odd part…they still sell insulin in Colorado.

        In truth and in direct contrast to Trump’s bloviation the latest attempt to enact meaningful drug price control legislation was introduced as the Affordable Drug Act by Senator Liz Warren, who, the reader is reminded is not of Trump’s party. As expected in a McConnell controlled Senate, it died a slow death fueled by massive Pharma lobbying efforts. Hopefully next January will see the dawn of a new day,

VOTE, Dammit!

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