Is the cost of insulin price gauging or just free market pricing?

[independentusa]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

 

[Napoleon]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

It depends on what kind of insulin we’re talking about. Designer insulin comes with designer prices. This kind of insulin has the benefit of faster absorption and fewer shots required, i.e. convenience. It’s developed via years of R&D at great cost using genetically modified bacteria. Analogue insulin on the other hand is very cheap because it’s easy and cheap to produce and doesn’t require any R&D. There’s no medical reason why any diabetic needs one over the other.

 

[Phys251]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

Both. It's an example of when unrestrained capitalism fails to do the right thing.

 

[Napoleon]

Both. It's an example of when unrestrained capitalism fails to do the right thing.

No different than complaining that Hermes bags aren’t priced the same as some sack you found in the bargain bin at Walmart.

 

[Phys251]

No different than complaining that Hermes bags aren’t priced the same as some sack you found in the bargain bin at Walmart.

Irrelevant and dismissed.

 

[independentusa]

It depends on what kind of insulin we’re talking about. Designer insulin comes with designer prices. This kind of insulin has the benefit of faster absorption and fewer shots required, i.e. convenience. It’s developed via years of R&D at great cost using genetically modified bacteria. Analogue insulin on the other hand is very cheap because it’s easy and cheap to produce and doesn’t require any R&D. There’s no medical reason why any diabetic needs one over the other.

The last new insulin came on the market two years ago. Can you tell me why older insulin that has been out for over 50 years and costs as low as $2.28 a vial to produce will cost $25.00 a vial to buy?

 

[independentusa]

No different than complaining that Hermes bags aren’t priced the same as some sack you found in the bargain bin at Walmart.

In economic terms this is called the price we pay for allowing monopolies to exist instead of breaking them up. And so you know I have a degree in economics and a monopoly is one or more companies with enough market share to determine the price of a product. It means that the companies collude on pricing which violates the law.

 

[What if...?]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

The original patent was sold for a dollar.

And the vast majority of “new” insulins were changed just to allow extension of patents.

It’s some really shady shit.

Insulin is a global product, but it is only ridiculously expensive here.

So there’s something shady going on if the same product is several times what it costs in the rest of the first world.

 

[Napoleon]

In economic terms this is called the price we pay for allowing monopolies to exist instead of breaking them up. And so you know I have a degree in economics and a monopoly is one or more companies with enough market share to determine the price of a product. It means that the companies collude on pricing which violates the law.

No, what it means is that medically unnecessary higher end products are more expensive than their basic counterparts. No different than anything else for sale.

 

[washunut]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

There are several companies selling insulin. So two solutions that may work. First state and federal governments are the most likely the largest consumers of this drug, so why not put it out for bid. Next if there is price fixing as there seems to be why doesn't the DOJ take them to court for price fixing.

 

[mrjurrs]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

No part of the healthcare system in America is a free market.

 

[Napoleon]

The last new insulin came on the market two years ago. Can you tell me why older insulin that has been out for over 50 years and costs as low as $2.28 a vial to produce will cost $25.00 a vial to buy?

The drug companies don’t decide the retail cost. That is a question for pharmacies.

 

[Callen]

The original patent was sold for a dollar.

And the vast majority of “new” insulins were changed just to allow extension of patents.

It’s some really shady shit.

Insulin is a global product, but it is only ridiculously expensive here.

So there’s something shady going on if the same product is several times what it costs in the rest of the first world.

It isn't shady at all. It's right out in the open for all to see. Big pharma has managed to successfully lobby the US government, especially through campaign donations, to keep drug prices high. They are making a fortune off Americans while other countries negotiate prices enjoy relatively inexpensive drugs. I just don't get why Americans put up with this.

 

[Callen]

The drug companies don’t decide the retail cost. That is a question for pharmacies.

That's not quite true. Yes, they control the price at the till but they are not the group raking in the big bucks. US pharmacies are charged orders of magnitude more by big pharma than Canadian pharmacies are...for the exact same product.

 

[OrphanSlug]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

The cost of insulin is an example of vulture capitalism, it is not free market force based.

Roughly 90% of the global market for insulin is controlled by 3 companies and those same ones control virtually all of the insulin production in the US, insulin itself is a biological product not a chemically synthesized product as most other generics, and if you shuffle over to OpenSecrets you will find a wide range of members of Congress end up with a whole lot of money to look the other way.

This all results in marketing campaigns, shady pay for support (and sometimes pay to not produce or compete) with resulting price coordination between the major players in insulin production, often called "market control coopetition."

Cost to make is not terrible, but the markup results in profits of hundreds of millions per year off one drug.

When you can coopetition your way into quadrupling the cost of insulin inside of a decade it makes for the best example of vulture capitalism on record.

 

[dockside]

The drug companies don’t decide the retail cost. That is a question for pharmacies.

The drug companies don't need to decide the retail cost. They decide, collude, on the price they will charge the retailers. The retailers, in order to stay in business, have to make a profit. So, they add something to the wholesale cost.

Duh. Of course you knew that. But you wouldn't be able to take the focus off the drug companies if you correctly explained the pricing of drugs and almost every product sold at retail.

 

[Napoleon]

The drug companies don't need to decide the retail cost. They decide, collude, on the price they will charge the retailers. The retailers, in order to stay in business, have to make a profit. So, they add something to the wholesale cost.

Duh. Of course you knew that. But you wouldn't be able to take the focus off the drug companies if you correctly explained the pricing of drugs and almost every product sold at retail.

I haven’t seen any evidence that drug companies “collude” on the wholesale price of insulin. I also haven’t seen anyone lay out the difference between the wholesale price and the retail price established by pharmacies. So you can show your work by starting there. How much do the drug companies sell it the pharmacies for per vial?

 

[jnug]

Is the cost of insulin price gauging or just free market pricing?​

Well I would like to say its the free market run amok. But I can't even say that. Its the effect of Big Pharma lobbyist money that attracts the IDIOTS we elect to Congress. They thus do nothing to prevent what is a tragedy. I just hope the released texts of the whacko bunch from the hill texting with the COS opens people's eyes to the lack of any ability to think by Congress Critters. They appear to believe that their only function is to get elected. After that its not just all downhill. Its right off a cliff edge.

 

[jnug]

The drug companies don’t decide the retail cost. That is a question for pharmacies.

Actually the Pharmaceutical companies and the Insurance companies and the pharmacies all in deadly combination decide what is paid. What from Insurance, what from you, what based on the discount schedule by pharmacy. The pharmacies are the least responsible for this mess but still responsible to some degree.

 

[Gateman_Wen]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

Straight up price gouging.

 

[Stealers Wheel]

Every therapeutic drug approved by the FDA has an end to its patent. When that point is reached, generic companies are free to copy the original formula and market their own cheaper generic versions - at least that is what is supposed to happen, in theory. However, the big pharmas have figured out a way to keep competing generics out of the market. They market their own generics.

 

[Lloyd Christmas]

It is hard to find the cost of producing insulin and the price to buy, but after looking at many articles the best I could find that for insulins, from the older types to the newer, the average cost to produce a vial of insulin in 2018 was between $2.28 and $6.16. The average cash price to buy that vile in the US in 2022 was between $25.00 and $300.00 depending on the type and age of the product. Older products cost less to make and were lower in price and the newer products cost more to produce and had a much higher markup. When asked about the price of their products, the companies producing the products said that there were few companies that made insulin and thus the supply was limited. So you tell me, is this price gauging or just the free market at work?

Is there a difference? Seems to be the same. It's pure greed, plain and simple. And that's a problem with much of this country, gigantic corporations own everything not just in their primary field, but everything. Some own the entire supply chain or are involved in it. So they can get away with jacking up prices and being greedy.

The original patent was sold for a dollar.

And the vast majority of “new” insulins were changed just to allow extension of patents.

It’s some really shady shit.

Insulin is a global product, but it is only ridiculously expensive here.

So there’s something shady going on if the same product is several times what it costs in the rest of the first world.

Yeah, every industrialized country in the world has universal healthcare where they have bargaining power over the price of drugs. And the US market, by far the largest, subsidizes that. We have a government of the corporation, by the corporation, for the corporation, so this is what we get. We get robbed blind by greed. Now, I'm cautious about total price controlling as it will stifle new innovations which is extremely risk and requires insane capital,which people pursue, particularly venture capital firms, because the high reward. But this is an off patent drug so there is no way it should be priced as high

 

[Metric Mouse]

It isn't shady at all. It's right out in the open for all to see. Big pharma has managed to successfully lobby the US government, especially through campaign donations, to keep drug prices high. They are making a fortune off Americans while other countries negotiate prices enjoy relatively inexpensive drugs. I just don't get why Americans put up with this.

Another example of America subsidizing the planet.

 

[Court Jester]

Hey OP, how do you measure insulin price "gauging", with one of these?

 

[independentusa]

There are several companies selling insulin. So two solutions that may work. First state and federal governments are the most likely the largest consumers of this drug, so why not put it out for bid. Next if there is price fixing as there seems to be why doesn't the DOJ take them to court for price fixing.

If you knew economics you would know that monopolies are not always one company, but can be several who price collude. And the reason that the DOJ can not deal with this is the basic, do not out anything in writing that large corporations use to hide their tracks. That makes it impossible to prove collusion. Look at gas prices in your area. Fifty years go there were gas wars and prizes for buying gas at a particular station. Now you can not find stations in the same area with prices more than aa cent apart. Two things happened in the fast fifty years. The government allowed the big fish to eat the little fish and the big fish closed the little fishes refineries. Now the few big fish left collude to keep prices high.