In light of all the outrage over high insulin costs these days, we thought it would be interesting (to say the least!) to take a “Wayback Wednesday” walk through the history of this topic in the US…
Remember those guys who actually 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.
Well, did you know that their original intellectual property rights were sold for just $3 in Canadian money?
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 an excerpt from a 2002 article chronicling this:
“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 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.”
Since insulin was in such high demand, the university granted Lilly (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.
Whoa, it was all done the benefit of human kind at that point…
But it opened the door to big profit-chasing — and the business of diabetes was born not long thereafter.
Flash forward a couple of decades to 1941, when Eli Lilly and two other insulin companies were accused of illegal anti-trust violations in overcharging for insulin to rake in profits (!)
This Chicago Daily Tribune story from April 1, 1941, reports that a federal grand jury indicted a corporate trio — insulin manufacturer Eli Lilly in Indianapolis, distributor Sharp & Dohme in Philadelphia, and drug maker and distributor E.R. Squibb & Sons in New York — for conspiring to unlawfully “bring about arbitrary, uniform, and non-competitive prices for insulin and to prevent normal competition in the sale of the drug.” That was a federal charge of violating the Sherman Antitrust Act, the landmark legislation preventing anti-competitive business practices.
In my sleuthing I also found an Indianapolis Star story from that same day with more detail, including a statement from Mr. Eli Lilly himself, pointing to how proud he was of the company’s insulin history and how 13 price decreases had supposedly been made between 1923-41.
He’s quoted as saying: “Our price is now 3.5% of what it was when it was first sold in 1923, and today it costs the average diabetic just 7.5 cents per day.”
All three companies eventually pleaded “no contest,” but never admitted any wrongdoing. In July 1941, newspapers reported that the accused companies were fined $5,000 each and their corporate officers each faced $1,500 in individual fines for the price-fixing charges.
Later, Sharp & Dohme merged with Merck in the early 50s, while Squibb became the sole distributor of insulin in the U.S. for Novo Nordisk in the late 70s and early 80s before that was eventually taken over by Novo solely. Squibb became a part of pharma giant Bristol-Myers Squibb, without any insulin production of its own.
Amazing that even back in the “diabetes dark ages,” old-school insulin was the subject of price-gouging! As things change, so much remains the same…
Turns out we’re not the only ones mulling over “How it used to be.”
Last year at the ADA’s annual Scientific Sessions, well-known endo and type 1 himself Dr. Irl Hirsch in Washington state actually gave a presentation about the evolution of insulin prices, including a chart with a great historic view of how costs have escalated over time — in particular when newer insulins appeared post-1970.
We also came across a conversation thread on the TuDiabetes community about just how low insulin prices were, way back when…
“Unless memory fails me, I seem to remember $1.98 for R and $2.00 for N. That was in 1959 and 1960. Since I live in a different city, I’m sure prices did vary. In those old days there were no disposable syringes. I had a glass syringe that I would boil each timed I took shots.” – BettJ
“I remember in the ‘old days’ the cost for a bottle of insulin (the pork stuff NPH) was only $1.49. That was 1972. I remember going to the local drug store in North Miami. No CVS, no Walgreens, no mail-order. The pharmacist’s name was Herbie. When we walked in the drugstore, Herbie would pull out one bottle of insulin and a box of syringes and say ‘Here you go Sweetie.’ My mother would sign for it. BD plastic disposable syringes were the newest and greatest… The drugstore would send a bill to the house every month. That was a big expense for a family of five then. I thank my parents for what they gave and did for me.” – DarGirl
“I remember, circa 1974-76 at Spelman College in Atlanta, getting a couple of bottles of insulin (NPH, beef and pork) for about $2.50 each, and a 30-day, one-injection-daily supply of syringes for either $10 or $15. My parents bought it for me and mailed it to me freshman year. I bought them for myself from my little student paycheck in junior and senior year… I paid about $20 to $25 a month for diabetes supplies, which was significant as I don’t think I made but about $60-$75 monthly, but I was on a half-tuition scholarship; and parents/grants paid for the rest, as well as room and board, so I felt blessed and fortunate!! Hard to imagine that my three to four bottles a month cost $10.00 or less, and now my Apidra is listed at $103.00 a bottle.” – Brunetta
There are still some doctors around who remember that reality too.
You may recall our past interviews with renowned endocrinologist Dr. Fred Whitehouse, who’s now retired after a long career stretching from practicing with Dr. Eliot Joslin himself back in the mid 50s to working in Detroit where he treated the original insulin-user Elizabeth Hughes Gossett in the years before her death.
How does he feel about what’s going on now? Not surprisingly, he tells us he’s disappointed with how insulin pricing has become such a difficult topic over the past 15 years or so.
Dr. Whitehouse says that in 1938, when he was 12 years old and his 8-year-old brother was diagnosed with type 1, he doesn’t remember hearing his parents ever talk about the cost of insulin as a barrier. His brother went on the first slow-release insulin called PZI, which lasted 24-36 hours in the body. Not long after that, he started on a new trial insulin known as NPH. Since the brother was involved in a study, the new insulin was sent to their house for free from the manufacturer for a full three years.
Eventually, NPH hit the market in 1950, according to a very intriguing History of Insulin report.
Dr. Whitehouse worked at Joslin Diabetes Center in Boston for more than a year in 1954-55, after which he joined Henry Ford Hospital as a resident. He says he doesn’t ever remember hearing complaints from patients, family members, or other medical professionals regarding prices at the time.
He does note that for folks with “marginal incomes,” cost would have always been a factor to some degree, with some patients skipping insulin doses or oral agents, prescribed daily, because they couldn’t afford them.
But for the most part, Dr. Whitehouse points out that cost became a factor when insurance companies started using co-pays for prescriptions, and when newer insulins (like Humalog, Novolog, Lantus, etc.) and delivery systems such as disposal pens, became available circa 2000.
“Generally I think it has been an issue in the last 10-15 years for more people,” he tells us. “We started to fill out forms that would make it possible for the insulin pharmaceutical companies to send patients ‘free’ insulin vials, but usually not pens.”
“To me it is interesting that insulin cost rose after human insulin became available. It was never an issue with animal insulin,” he added, noting that this may “reflect the suppliers’ view re: compensation from the market of ‘development costs.’”
We also checked in for a historical perspective from Dr. Stephen Ponder, who many know as the fellow type 1 who crafted the popular Sugar Surfing method of using CGM tech to better monitor glucose levels and stay in range.
He recalls how back in the late 60s and early 70s, Lilly was actually pitching the idea for newer, recombinant DNA types of insulin that would be a synthetic human insulin. Seeing the huge demand and how supply could dwindle, the pharma company was pushing then to go beyond animal resources and move into human insulin as a way to not only increase supply, but to help lower the cost of insulin!
“They created charts protecting the number of people with diabetes versus population of available animals,” Dr. Ponder told us. “Looking back, it seems rather ludicrous. But at the time, it was justified for creating rDNA insulin. Despite the ability to create an unlimited supply, the forces of supply and demand have now been turned upside-down, in my opinion.”
He doesn’t recall that same “lower price” rationale being used in the late 90s when analogue insulins (ie Humalog and Novolog) were being introduced on the market — a point that other diabetes historians and longtime endos echo, including Dr. George Grunberger and Dr. Irl Hirsch who are respected for their knowledge and advocacy on access and affordability issues.
Obviously, times have changed and insulin prices are extraordinarily higher than they were at the time when analogues were introduced 20 years ago.
We can’t help wondering what Drs. Banting and Best would’ve thought about this turnaround: the desperate demand for insulin across the globe by many who don’t have adequate access to this life-sustaining medication, in the face of business dealings that have forced prices to skyrocket.
It’s too bad we can’t take a step back into the past when insulin was considered a resource for the public good rather than a product ripe for a high-growth billion-dollar market.
Guess that’s not possible — anymore than finding a way to travel back in time and kickstart our pancreases 🙁