“Freeing up the insulin market would allow for a significant decrease in cost of insulin.”
My morning starts the same way every day. Coffee and insulin. I was diagnosed with Type 1 Diabetes when I was 17 and since then I have relied on insulin to get me through the day. I am no stranger to the cost of insulin and how that impacts my fellow diabetics and I. The price for a month-long supply of insulin has increased by 1200% since 1996. Diabetics, especially Type 1, have virtually no substitutes for insulin outside of rationing or sugar surfing – two options that can be detrimental. To protect diabetics, many call for government interventions like price ceilings to stop the hockey stick curve of insulin prices. But less government, not more, would reduce costs for diabetics, making insulin available for all.
An FDA-Sanctioned Monopoly
Three companies have a government granted monopoly over the insulin market. That means only three businesses can supply insulin to the 7.4 million Americans who need it. Through grants of special privilege from the Food and Drug Administration, the three companies have been in a race to the top – leading to astronomical price increases. Regulations by the FDA make it incredibly difficult for any competitors to enter the insulin market and push prices down, leaving diabetics to choose between three expensive items.
Freeing up the insulin market would allow for a significant decrease in cost of insulin. If the FDA was to lower their regulatory barriers, more insulin would be available. A lower cost alternative to biologically manufactured insulin is animal insulin – which has been removed from the white market by the FDA. While dosages are higher for animal insulin, it can be a low-cost alternative for those who need it. Allowing animal insulin would be especially valuable to those without health insurance.
The Harm of Patents
Another option to reduce insulin prices is removing patents. Sanofi, the company producing Lantus, an insulin I relied on for many years, has filed over 70 secondary patent protections, which if all are granted would give Lantus patent protection for 37 more years – almost double the duration given under US Law. This patent protection preserves the monopoly and allows Sanofi to hike prices without risk of competition. In countries where there are not these patents, Lantus is drastically cheaper. In the US, a five-pen carton of Lantus costs $280. In Mexico, for the exact same product, it costs only $50. Removing patents would allow for generics to enter the market. In Europe and Japan, insulin prices fell dramatically when patents were removed. This allows for everyone who needs it to have access to insulin.
It is easy to blame capitalism for insulin price increases. Greedy companies exploiting people reliant on insulin to survive are convenient scapegoats. But the real culprit is government grants of special privilege. By removing the monopoly given to insulin companies, the supply of insulin can increase, thus pushing prices down. Getting the government out of the insulin market would dramatically improve the lives of 7.4 million Americans, including myself.
Susannah Barnes is a senior economics major from Midland, Michigan. Susannah has loved politics and policy since she began speech and debate in eighth grade. Since then, her passion for economic and political freedom has only grown. On campus, Susannah is the co-captain of the Debate Society and serves as the Executive Administrative Editor for the Grove City College Journal of Law and Public Policy. Additionally, she works in the Admissions Office and as a Public Relations manager and Teacher’s Assistant for the Economics Department.
Susannah interned at the Mercatus Center at George Mason University as a Media Relations Intern first through the Koch Internship Program in 2019 and again in 2020. Before that, she interned as a Communications Intern at the Mackinac Center for Public Policy. After graduation, Susannah hopes to work in communications for a think tank and get a graduate degree in economics.