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Diabetes Medication Can Be Manufactured at Lower Cost, New Study Says

April 24, 2024
by Sarah L. Spaulding

A recent study published in Journal of the American Medical Association (JAMA) Network Open found that key diabetes medicines can likely be manufactured at costs far below their current market prices. The economic evaluation, led by Yale postdoctoral associate Melissa Barber, PhD in conjunction with collaborators from Doctors Without Borders (Médecins Sans Frontières (MSF)), calculated the manufacturing costs for insulins, sodium-glucose cotransporter 2 inhibitors (SGLT2Is), and glucagon-like peptide 1 agonists (GLP1As) – all widely used diabetes medicines.

Cost-based prices for SGLT2Is (except canagliflozin) ranged from $1.30 to $3.45 per month, while GLP1As ranged from $0.75 to $72.49 per month. Current prices for newer types of insulin, insulin analogues, ranged from 1.3 to 38.9 times their estimated cost-based price. Perhaps unsurprisingly, the highest prices across all insulins were in the United States. The lowest is in China, France, the Philippines, and South Africa.

What allows for these prices to remain far above their manufacturing cost? “It is well known that there is limited competition in these markets, with only a handful of companies, for example, manufacturing the majority of the world’s insulin. At the same time, companies do not disclose their manufacturing costs,” says Barber. “More information on manufacturing costs in the public domain is foundational to any policy discussion of what is a fair price.”

Indeed, Barber and her co-authors argue that understanding the manufacturing costs of these life-saving medications is a key first step towards increasing access for people living with diabetes around the world. This information can help health systems reach more affordable prices in negotiations with pharmaceutical companies, with the potential for profound impact in both countries where prices are currently the highest, such as the US, as well as countries with limited health budgets, such as many low- and middle-income countries.

As for arguments that reducing the prices of diabetes medicines isn’t feasible, Barber is unconvinced. “There are real constraints in the world, but the cost of manufacturing these medicines isn’t one of them,” she says. Her findings include a manufacturing cost of $61 per year for twice-daily mixed human insulin NPH and $111 per year for basal-bolus treatment with insulin glargine and aspart. “For type 1 diabetes, where access to insulin is a matter of life or death, enabling access at these prices – a hundred dollars a year – would be a great step forward.”

To enact change based on these findings, manufacturing generic and biosimilar medications would play an essential role in widening access to affordable diabetes management. Other roadblocks include patent rights on some of the medicines and injection devices, according to Barber.

To her, the work is far from done. “Insulin was discovered in public labs, the patent was given to a university to protect public health, and yet between one in four and one in seven Americans still ration their insulin because they cannot afford it. Analysis of manufacturing costs highlights that the status quo of unaffordability is not inevitable but instead a policy choice. Universal access to diabetes treatment is achievable, even in low-resource contexts.”

Diabetes impacts over 500 million people globally.

In addition to Barber, other authors include Dzintars Gotham, MBBS; Helen Bygrave, MBBS; and Christa Cepuch, MPH.

Barber MJ, Gotham D, Bygrave H, Cepuch C. Estimated Sustainable Cost-Based Prices for Diabetes Medicines. JAMA Netw Open. 2024;7(3):e243474. doi:10.1001/jamanetworkopen.2024.3474

The Department of Internal Medicine at Yale School of Medicine is among the nation's premier departments, bringing together an elite cadre of clinicians, investigators, educators, and staff in one of the world's top medical schools. To learn more, visit Internal Medicine.

Submitted by Julie Parry on April 24, 2024