Making Money from Diabetes
Originally published on September 12, 2024.
Last Updated on September 15, 2024.This morning I read an article that described how Frederick Banting (the man who discovoured Insulin and how to produce it safely) sold his patents for insulin to the University of Toronto for $1 back in 1923. The U of T then gave drug companies permission to produce the product royalty free. Apparently this was to prevent drug companies from rushing an inferiour product to market in an effort to gain the patents. Banting said, ‘When the details of the method of preparation are published, anyone would be free to prepare the extract, but no one could secure a profitable monopoly.’
Yet a mere 18 years later, on April 1st, 1941, the 3 main producers of Insulin in the US pleaded no contest to charges of price-fixing to ‘bring about arbitrary, uniform, and non-competitive prices for insulin and to prevent normal competition in the sale of the drug.’ See newspaper articles here. (A curious side note, is that this charge was brought against the drug companies a mere month after the death of Sir Frederick Banting. There maybe no connection, but it is certainly an interesting fact.)
It is reported that those companies were eventually fined $5000.00 each and corporate officers were charge $1500.00 each for their part in the corruption.
Suspicion continued to surround the companies producing Insulin, especially Eli Lilly and Company which was accused of attempting to control the international supply of pig and cow pancreases which were the source of insulin before the advent of artificial insulin.
Flash forward to 2016 and the accusations of massive price fixing continue with calls for an investigation into the exorbitant price of Insulin. Reports show that even though the patents on Insulin have long expired, the price of the drug have continued to rise artificially by what appears to be collusion among the drug companies.
Electronics manufacturers have jumped on the ‘lets make a pile of money from this disease’ bandwagon with their production of small portable blood glucose measuring devices. While these devices are a true lifesaver for those who take control of their diabetes, the price of the essential ‘strips’ are prohibitive for many. The electronics and plastics bits of these meters cannot cost more than a dollar or two to mass produce in China (which is why manufacturers often give the devices away for free,) yet the price of the ‘strips’ that accept the blood sample have stayed what appears to be artificially high. While the strips are marvels of ingenuity, they are still mass produced from inexpensive materials – so why do they cost so much? ‘Generic’ and ‘store brand’ strip prices have come down providing evidence that the prices being charged by the leading medical device manufacturers is inflated. I’m a capitalist at heart, but if there was true competition between the device manufacturers, the price would naturally come down … not consistently rise. This all has the stench of collusion and corruption.