By Dr. Robert Gordon, CPC
Faculty Member, Dr. Wallace E. Boston School of Business, Reverse Logistics Management and Government Contracting and Acquisition
In recent decades, the cost of insulin has become so high that some diabetics have resorted to rationing their supply of insulin with often fatal results, according to NPR. But on March 1, 2023, Eli Lilly announced that it had cut the out-of-pocket cost of insulin by 70%. Now, Eli Lilly will offer this medicine at a price of no more than $35 per dose, which is far more in line with what is charged in other nations.
But what caused this drastic change in price? Was this drug manufacturer influenced by a Twitter parody account announcing that insulin was now free? There are likely other reasons for the change.
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The History of Insulin
To understand what has made insulin such a lightning rod of public opinion, it’s necessary to examine the history of insulin. Four people are credited with the discovery of insulin; however, only two people put their names on the patent.
When Frederick Banting and John Macleod discovered this medicine in 1921, it was understood to be such a life-saving drug that it seemed criminal to want to profit from its discovery. Frederick Banting refused to put his name on the patent.
His position was clear; he felt that trying to patent and monetize this discovery would violate his Hippocratic oath as a doctor. Similarly, John Macleod agreed and also declined to be part of the patent process.
The remaining two stakeholders, Charles Best and James Collip, patented the invention of insulin and sold that patent to the University of Toronto in 1923 for $1, according to Diabetes.org.uk. They intended for insulin to remain in the hands of a research university that would ensure that this medicine would remain available to everyone at little to no cost.
However, that is not where the story ends. The University of Toronto sold the patent for insulin to others, who did precisely what insulin’s creators feared the most – monetize it for profit.
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Insulin Becomes Highly Expensive in the US, Forcing Many Diabetics to Take Drastic Measures
By 2019, the price of insulin in the U.S. increased to $332 a dose, unaffordable for many American diabetics. Consumers have resorted to using social media rather than pharmacies to get the medicine they need, according to STAT News.
But due to manufacturing efficiencies, the average dose costs around $12. In other countries, the price of insulin is substantially lower so that everyone can get this critical medicine.
Due to manufacturers charging such a high price for insulin, the U.S. government began looking into the situation. In fact, two Presidential administrations have investigated rising healthcare costs and expensive medicines like insulin.
In March 2020, pharmaceutical giant Eli Lilly announced the introduction of a lower-priced insulin product, Humalog, in response to public pressure. Later, the company stated that a new product, called Insulin Lispro, would be 50% cheaper than Humalog. In addition, Eli Lilly announced in September 2020 that it would be lowering the list price of several of its insulin products by up to 50% through the Lilly Insulin Value Program.
The Twitter Parody Account Causes Additional Public Pressure on Eli Lilly
Although lawmakers continued to investigate and pressure Eli Lilly, the situation came to a head in early 2023 when a Twitter parody account of Eli Lilly declared that insulin would be free for everyone. Eli Lilly was quickly made aware of this situation, which set the Internet on fire.
The parody tweet was widely shared. Although Eli Lilly tried to explain that the tweet did not come from their official account, public opinion again was on them about the high cost of this drug.
So Why Did Eli Lilly Change Its Mind on Insulin’s Price?
While social media campaigns and satirical Twitter accounts may bring attention to healthcare issues, it is unlikely that either was the sole reason for Eli Lilly’s decision to lower the price of insulin.
Rising insulin costs have been a topic of concern for years. Many individuals and organizations have called for lower prices, including patient advocacy groups, healthcare providers and lawmakers.
Eli Lilly likely decided to change its high prices based on various factors, including public pressure, competition, governmental pressure and regulatory considerations. However, it is interesting to see that impact came at a time shortly after the Twitter parody account struck Ely Lilly deep and caused a shift in public opinion about the company.