Estimates find that some 10 percent of all Americans have diabetes, but just three companies manufacture the life-saving medicine needed to treat it. That’s believed to explain why diabetes has become the most expensive chronic condition in the United States, with prices doubling between 2012 and 2016.
An organization called Open Insulin hopes to change the calculus by creating open-source alternatives to the insulin made by the Big Three. The non-profit group is producing not only the compositions for insulin, but also hardware equivalents to the production equipment used by major pharmaceutical companies. The idea is that any community around the world could use the instructions to spin up their own small-scale manufacturing and meet local needs.
Profit incentive — It may seem crazy that healthcare could be the subject of patents, but that’s effectively the issue around insulin today. Because it requires billions of dollars to research and develop new medicines, the U.S. rewards that innovation by allowing for 20-year exclusivity periods on new drugs. But pharmaceutical companies have found loopholes in the U.S. patent system that prevent others from duplicating their insulin formulas and allow them to keep prices high for decades — which is what they’ve done.
Fact-checking watchdog PolitiFact found in a recent investigation that it can cost the average person with Type 2 diabetes as much as $2,341 every month for the needed dosage. Between 2012 and 2018, prices have increased about 14 percent annually, according to one estimate. Manufacturers of insulin have an incentive to keep prices high because insurance providers and pharmacies negotiate discounts and pocket some of that as profit.
In July 2020, the Trump administration signed an executive order that would require those savings to be passed directly to patients, but it didn’t go into effect before the Biden administration froze Trump’s executive orders.
Bipartisan support — The Open Insulin project could be something to watch. There exists bipartisan agreement that access to life-saving insulin shouldn’t be dependent on means, but that’s where America is today. By open-sourcing everything needed to make insulin — essentially giving anyone the instructions — three companies alone wouldn’t have the power to determine people’s lives based on investor demand for profit growth. Prices could be set at cost, rather than at a level that would make a few people wealthier.