10 ms·

> Though insulin generally costs less than $10 per dose to produce, some versions of the drug have a list price above $200. This is in part because, in the US,

> Though insulin generally costs less than $10 per dose to produce, some versions of the drug have a list price above $200. This is in part because, in the US, a warped market has allowed three companies to dominate the insulin business. > With California leading the way, a handful of states are considering trying to disrupt the market for essential medications, starting with insulin. The plan would be to manufacture and sell insulin themselves for a price that is roughly equivalent to the cost of production. I feel like I'm missing something here. My understanding of why insulin is so expensive: laws are created and enforced by the government preventing people from competing in the space. If you try to make your own insulin, and you take it to market with 3rd party analysis and certification of it being medical grade (and safe) insulin, you'll start seeing an escalation of the state against you. First angry letters from lawyers and eventually, if you continue head strong and ignore everyone telling you to stop, government officials (possibly with guns) will come and forcibly shut you down. Is California just going to ignore these laws? How will the state not be liable for damages when individuals are? I'm all in favor of revoking the legal structures that pick the winners in this market. It seems like there are plenty of people passionate in this space that would/could make insulin at near-cost if permitted to. It's just that, by my understanding, it's the government that doesn't permit them to. It's weird that people in the government (at the state level) are stepping in to do what people in the government (at the federal, but possibly also the state level?) won't let people in the market do. Edit: substituting “intellectual property laws” with “laws” as it seems there’s more to it than just IP.

rayiner 4y ago
> I don't understand. My understanding of why insulin is so expensive: intellectual property laws are enforced by the government preventing businesses without that intellectual property to compete in the space. That’s not an accurate understanding of intellectual property specifically. Insulin isn’t like a pill, where once you have a chemical formula you can make millions of them very cheaply. It’s a biologic, an artificial hormone. Even leaving aside the patents, it’s very expensive to get approval for a generic biologic (called a biosimilar). That’s why there are few manufacturers of synthetic human insulin, even though that’s out of patent.
- ProjectInsulin 4y ago
  Hi Rayiner, you are spot on with your analysis. My name is Eric, and my non-profit, Project Insulin, is tackling this problem head-on as well. We are developing a biosimilar insulin and will distribute it directly to patients at cost. The drug development process is still expensive but much cheaper because of the Biologics Act that was passed in 2020. When going through the FDA approval process, biosimilar insulin makers don't have to do phase 2 trials, and their phase 1 & phase 3 are focused on interchangeability with the reference product rather than proving that insulin is a way to lower high blood sugars. Another obstacle, as you pointed out, is that there are few manufacturers who produce synthetic insulins. From what I've learned in my discussions with manufacturers is that many are transitioning their facilities to a focus on mRNA drug manufacturing. Therefore there is a limited set of manufacturers who don't make insulin but have the equipment/facilities for it (in the U.S.).
  - coldpie 4y ago
    Hi Eric! I'm a T1D and so super interested in this space. Can you comment on whether it is the case that "modern" insulins (Lantus and Humalog/Novolog, in my case) are both covered by current patents, and also considerably better for patient outcomes (faster acting, more predictable -> lower A1c) than non-covered insulins? That is my understanding for why cheap, high quality insulins are not available, but I'd love to be informed if it is not the case! Thank you for your work in this area!
    - MAGZine 4y ago
      (not OP). some quick googling reveals lantus is no longer covered by patents. patents in the usa last 20y, and they filed the main patent for that drug in 1994. it looks like they tried to patent some pen injection mechanism as a way to artificially extend the patent, but the patents were tossed out. I think that's a similar approach to how the Epi-pen people have maintained control, except their pursuit was successful (epinephrine isn't exactly a new chemical, nor is the process for manufacture). still--manufacture of these drugs is long and expensive process, esp with fda approval. new entrants want to recoup their cost. the public is a great institution to develop generics because it can happily do so without a profit motive.
gamblor956 4y ago
Insulin pricing isn't entirely IP issue; it's been out of protection and available as a generic for many decades now. The issue is that while insulin is actually quite cheap to make once you get started, the startup-costs associated with getting to that point are quite hefty: lab real estate, equipment to make and purify, FDA fees, etc. Newer versions of insulin are "better" than generic insulin: easier to take, fewer side effects, etc. The major insulin producers have been slowly doling out minor improvements over time, about every decade or so, to maintain IP protection on these newer modern versions of insulin, and the high prices associated with these newer versions. They've also been paying off several generics manufacturers to delay them from manufacturing generic versions of these modern versions as the patents expire.
- cma 4y ago
  > They've also been paying off several generics manufacturers to delay them from manufacturing generic versions of these modern versions as the patents expire. Isn't that already illegal (price fixing/collusion)? How are they structuring the deals to avoid prosecution?
- outworlder 4y ago
  > Newer versions of insulin are "better" than generic insulin: easier to take, fewer side effects, etc. Even that is debatable. At least Sanofi has been known to fund some rosy articles about their Lantus® product. When the EU looked into it (for similar initiatives) they were not able to find the large 'performance' gap that was suggested between that insulin and alternatives.
  - davikr 4y ago
    As far as I know, the major difference between insulin types is not their performance, but how long they take to act, when they peak and for how long they have an effect. Some types of insulin, like glargine (as in Lantus®) can be more convenient due to their long-acting response that lasts for an entire day. I suppose off-patent insulin could be produced with some degree of inconvenience to the consumer because they might have to take more doses per day, but they should work nonetheless.
olliej 4y ago
You know developing insulin doesn't require violating patents, right? And the price of insulin in the US is entirely an artifact of monopoly behavior by a small number of pharmaceutical companies? The ability to mass produce insulin at negligible cost has been around for decades, they guy who discovered it made it patent free even. Only in the US do companies get away with this kind of price gouging, and only because of monopolistic (or I get oligopolistic?) behavior and BS legal threats against anyone that might impact their profiteering off the work of others (paying off competitors not to compete, and BS patents on minor changes, with applications carefully scattered to maximize length of coverage). The only reason it's taking someone the size of CA to actually do something, is because the Pharma companies buy out, pay off, or lawyer into oblivion anyone else. All strategies that normally work because the victims of the (to me) clearly illegal monopoly based actions aren't incurring costs if they stop, whereas the gouging and monopoly tactics cost CA huge amounts annually. The only thing Pharma could do to make it worth CA not doing this would be to stop price gouging, which is of course the only reason CA is doing this. That price gouging is illegal if it's some dude hoarding toilet paper, but not when it's insulin being sold by multi-billion dollar corporations remains absurd. That people come to defend the "IP rights" of these organizations and their BS patents is a really American phenomenon.
- deleted 4y ago
  [deleted]
- basch 4y ago
  Insulin is cheap. Long acting insulin is not. They are different products, and the formers patent being free has nothing to do with the later innovations being locked down.
  - zaroth 4y ago
    Even the modern rapid acting insulin that doctors are prescribing (Humalog, Basaglar, etc.) can be very expensive. CVS filled a month supply for me after my insurance number had changed and when I went to pick it up they kindly asked for $1300 before I gave them the new insurance info.
m3kw9 4y ago
It’s only the modified versions that are protected and still only for 10 years, so the govt can choose a mod that has its patent expired
deleted 4y ago
[deleted]
outworlder 4y ago
> Is California just going to ignore these intellectual property laws? How will the state not be liable for damages when individuals are? Insulin can be made without breaking patents. Unless you specifically require something branded as Lantus®, for example(which is in no small part due to publications funded by pharmaceutical companies themselves, but also some 'marketing' straight to doctors). There are other longer lasting insulin formulations that can be made. There are hurdles if you take that route (as described in the article). Many are financial. One is regulatory (biosimilars).
- jjk166 4y ago
  > But pharma companies are savvy about finding ways to extend their monopolies, with insulin and other drugs, by making minor tweaks to the chemical compound and asking for a patent extension. In the case of insulin, the companies can also modify the delivery device to protect their market share. Each product is meant to be used with specific, company-designed injectors. Though the patents on the artificial insulin developed in the 1990s have started expiring, these companies continue to hold and extend monopolies on either their devices or other chemical compounds, making it harder for generic competitors to enter the market. > Other federal regulations have added to the challenge. The FDA began to treat insulin as a biologic drug in 2020 — meaning it is made with living materials instead of combining chemicals like conventional pharmaceuticals — which comes with a different set of standards for generic versions, which are known as biosimilars, as well as manufacturing challenges given the precise conditions these products must be made in. Biosimilars can cost up to $250 million to produce and take up to eight years to bring to the market, versus a one-year investment of as little as $1 million for conventional generics. And unless the FDA recognizes a new generic insulin as interchangeable with the products already on the market, health insurers might not want to cover it and doctors may not be willing to prescribe it. Seems like the barriers for a state entity are exactly the same as the barriers for private generic drug manufacturers, and the state could easily just stop erecting these barriers.
ak217 4y ago
Nothing weird about that, it's the essence of federalism. The resilience of the American system of government is attributable in large part to federalism, the marketplace of ideas from the states competing with each other. There is no patent on insulin, just regulatory capture on which proprietary analogs are approved for medical use. In 2020 the FDA changed the regulatory status of insulin, signaling that it's not going to let that regulatory capture continue. But if it does, there will be a lawsuit, it will go to the Supreme Court, and the pharma companies' arguments will probably get thrown out.
- plussed_reader 4y ago
  [flagged]
voakbasda 4y ago
IANAL, but they may not be ignoring those laws; they may be planning to fight them. That cannot happen without standing, which may be easiest to obtain by trying to move forward with this plan. I suspect they would be breaking federal laws, so I believe consideration of the State's 10th Amendment rights applies here. That would be wonderful and hope that this case brings that topic into the spotlight, because I see 90% of the federal government as being grossly unconstitutional on that basis alone. Personally, I suspect the market leaders would not want to face the courts, because the exposure would be horrible PR that affects all of their product lines. Moreover, an aggressive and concerted effort to block this effort should be viewed as the anti-competitive behavior of a cartel, which is the status quo de facto that the State is effectively trying to disrupt. I don't see such a challenge as anything but a lose-lose for those companies. Hopefully, they take the bait and do something stupid that leads to reform at the national level.
- kmeisthax 4y ago
  We already have precedent for a state outright saying "fuck copyright": Blackbeard's Law[0]. North Carolina copied a photographer's images and then passed a law saying the images were part of the public record and thus not copyrightable. The photographer sued to get the law repealed but SCOTUS decided that sovereign immunity meant there was no standing to overturn the law. An interesting wrinkle is that Congress already foresaw this and passed a law decades ago waiving state sovereign immunity for patent and copyright claims. But then SCOTUS overturned the patent prong of this federal waiver on the grounds that Congress hadn't proven that states had a pattern of telling patent holders to go fuck themselves. And SCOTUS's reasoning for striking down the suit about Blackbeard's Law was that this also held true for the copyright prong of that law... despite being handed a brazen example of a state nullifying copyright law for their own gain on a silver platter. What this technically means is that your state could, tomorrow, run their own pirate streaming site and not get sued for it[1]. The only way to stop it legally would be to sue end users, which would be difficult to do for a direct download service[2]. As for antitrust and cartels, since copyright and patents are legal, government-granted monopolies, most courts are very loathe to attack them even when they are used in ways that violate antitrust law. You can see this in FTC v. Qualcomm, where an appeals court smacked down an antitrust ruling for this reason. Compounding this is the fact that a very large contingent of judges have been slowly nullifying antitrust since the 1980s under the "consumer welfare" theory that every tech company is built to maximally exploit. I could see California getting away with bloodying Eli Lily & Co's nose. But I would not count on this becoming a future model for evading (ab)use of the patent system. Remember, all the states are still part of a federal government that is very much in favor of the patent system as currently constituted, and there are still things they can do to block California. [0] https://nsglc.olemiss.edu/blog/2020/apr/2/index.html https://nsglc.olemiss.edu/blog/2020/apr/2/index.html [1] Assuming your state had not already waived sovereign immunity for copyright [2] It's commonly believed that you can't sue for downloads, only uploads. This isn't quite true. At least one court has outright said that both are illegal but infringe on different exclusive rights. I don't remember which court.
HDThoreaun 4y ago
Insulin is off patent. There are new versions that offer a variety of benefits under patent, but just generic insulin can be made by anyone who passes the governments regulations. Walmart is known for offering generic insulin at lower prices.
- coredog64 4y ago
  Walmart presumably has a bulk sales deal with Novo Nordisk. The latter actually produces the “ReliOn” brand sold at Walmart.
projektfu 4y ago
A lot of formerly protected insulins, e.g. insulin glargine, are off patent now. The remaining moat for generics consists of FDA approval, delivery system patents, and manufacturing process patents/trade secrets. For a generic insulin to get FDA approval it needs bioequivalence which is a lot like running the original safety and effect studies over again, while dealing with spurious injunctions and the like from the company with the name brand. If you get to the finish line as a private company, you're going to price it where you can get some of the market but not get into a price war with the name brand. California, on the other hand, is paying a lot of money to Novo Nordisk et al, and would benefit from reaching a low average price. They can afford to go through the approval process with all the important insulin analogs. And they won't go bankrupt in court before it pays off.
- deleted 4y ago
  [deleted]
- RcouF1uZ4gsC 4y ago
  >. For a generic insulin to get FDA approval it needs bioequivalence which is a lot like running the original safety and effect studies over again That is incorrect. A bioequivalence study is much simpler and cheaper than the original safety and efficacy studies. You do not need to prove that safety and efficacy of the drug, only that you are delivering the equivalent of the originally studied drug at the same doses. https://en.wikipedia.org/wiki/Bioequivalence https://en.wikipedia.org/wiki/Bioequivalence
  - junofan 4y ago
    No, the submission packages for anything chronically administered (like insulin follow-on) are way more comprehensive.
    - projektfu 4y ago
      Thank you. Insulin, being a biological, can't prove equivalence through just equivalent pharmacokinetics and contents.
zackees 4y ago
[dead]
standardUser 4y ago
>> Is California just going to ignore these intellectual property laws? Like they ignored asinine federal drugs laws? I hope so!
- lotsofpulp 4y ago
  California is not ignoring federal drug laws. California has no mandate to enforce federal drug laws. Rather, the executive branch of the federal government is choosing to not enforce federal drug laws (in some situations, for some drugs). Federal agents can walk in and charge everyone in a cannabis store anytime they want, as I understand it.
skeletal88 4y ago
If it was about intellectual property then it would not be tens of times cheaper in the EU and other countries. Insulin is not something new and advanced that needs special protection
blendergeek 4y ago
> Is California just going to ignore these laws? How will the state not be liable for damages when individuals are? IANAL. But would this be similar to Jim Olive Photography v. University of Houston System? https://fairuse.stanford.edu/case/jim-olive-photography-v-university-of-houston-system/ https://fairuse.stanford.edu/case/jim-olive-photography-v-un...
fallingfrog 4y ago
The inventor of insulin sold the patent in 1923 to the University of Toronto for one dollar so that nobody could take advantage of people in the way that's currently being done. This is 100 year old technology. It has nothing to do with development cost. https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expensive https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expe...
- coredog64 4y ago
  There’s not a single word in that entire article that calls out that modern insulin products are not the same animal-derived insulin that was isolated 100 years ago.
vippy 4y ago
nah, that's some goofy libertarian take. easier to blame the government than monopolistic behavior by pharma corporations and private actors.
roenxi 4y ago
Not knowing anything about the specifics of California, but bad law here seems to follow a rough process: 1. Centralise power in a regulatory body that will raise costs every time something goes wrong. 2. The barrier to getting things done rises until there is a crisis. 3. The barrier is so high only someone behaving like a financial illiterate would enter the market, so legislators task government with entering the market or underwriting someone who can. So I'd assume that legal ability that was ever the problem. Usually it is regulatory requirements implying a minimum size of the actor needed to take on the risk. I see a few comments that this time around the technical term implementing this for insulin is "bioequivalence" but the broader pattern applies in a few markets and should be called out.
CodeWriter23 4y ago
What you’re missing here, just like how everything runs in California (and perhaps in most places), the government won’t be in the business of manufacturing insulin. They will choose a winner to be the subcontractor to produce the product. That firm will meet a price point for the duration of the contract and then renegotiate. Or go into the market like the other players.
PragmaticPulp 4y ago
> I feel like I'm missing something here. My understanding of why insulin is so expensive: laws are created and enforced by the government preventing people from competing in the space The article doesn't do a good job of explaining that "insulin" isn't a single drug, or at least how they describe it. Generic insulin is cheap. You can get it for $25/vial from your local Walmart. With production costs, regulation compliance, storage, transport, and paying pharmacists, they're not making much profit on that. Patented insulin analogs are not cheap. They have different characteristics for duration and onset time that make them easier to dose, but the patent means that you can't produce and sell it unless you own the patent or have licensed it. Drug companies who own these patents set their prices according to what they can get insurers to pay, not according to what they expect people to pay out of pocket. One of the weird quirks of the US medical system is that drug companies often have alternate prices for people without insurance. Remember, the high prices aren't designed for you to pay, the high prices are designed to extract as much money as possible from your insurance company. You can see this in action on drug company websites. Lilly has a program that will cap your payments at $35 for even their expensive insulin analogs: https://www.insulinaffordability.com/ https://www.insulinaffordability.com/ You have to renew every 12 months and hope they're still doing it, but they generally keep these programs around because it dampens the outrage about the high prices.
refurb 4y ago
Its ridiculous initiative is why. California will make insulins already off patent. Ones where lower cost versions are already available. It would be far smarter to just subsidize existing versions. But it doesnt solve the problem that the latest cutting edge patented insulins cant be copied by the government.

rayiner 4y ago

> I don't understand. My understanding of why insulin is so expensive: intellectual property laws are enforced by the government preventing businesses without that intellectual property to compete in the space. That’s not an accurate understanding of intellectual property specifically. Insulin isn’t like a pill, where once you have a chemical formula you can make millions of them very cheaply. It’s a biologic, an artificial hormone. Even leaving aside the patents, it’s very expensive to get approval for a generic biologic (called a biosimilar). That’s why there are few manufacturers of synthetic human insulin, even though that’s out of patent.

ProjectInsulin 4y ago
Hi Rayiner, you are spot on with your analysis. My name is Eric, and my non-profit, Project Insulin, is tackling this problem head-on as well. We are developing a biosimilar insulin and will distribute it directly to patients at cost. The drug development process is still expensive but much cheaper because of the Biologics Act that was passed in 2020. When going through the FDA approval process, biosimilar insulin makers don't have to do phase 2 trials, and their phase 1 & phase 3 are focused on interchangeability with the reference product rather than proving that insulin is a way to lower high blood sugars. Another obstacle, as you pointed out, is that there are few manufacturers who produce synthetic insulins. From what I've learned in my discussions with manufacturers is that many are transitioning their facilities to a focus on mRNA drug manufacturing. Therefore there is a limited set of manufacturers who don't make insulin but have the equipment/facilities for it (in the U.S.).
- coldpie 4y ago
  Hi Eric! I'm a T1D and so super interested in this space. Can you comment on whether it is the case that "modern" insulins (Lantus and Humalog/Novolog, in my case) are both covered by current patents, and also considerably better for patient outcomes (faster acting, more predictable -> lower A1c) than non-covered insulins? That is my understanding for why cheap, high quality insulins are not available, but I'd love to be informed if it is not the case! Thank you for your work in this area!
  - MAGZine 4y ago
    (not OP). some quick googling reveals lantus is no longer covered by patents. patents in the usa last 20y, and they filed the main patent for that drug in 1994. it looks like they tried to patent some pen injection mechanism as a way to artificially extend the patent, but the patents were tossed out. I think that's a similar approach to how the Epi-pen people have maintained control, except their pursuit was successful (epinephrine isn't exactly a new chemical, nor is the process for manufacture). still--manufacture of these drugs is long and expensive process, esp with fda approval. new entrants want to recoup their cost. the public is a great institution to develop generics because it can happily do so without a profit motive.

gamblor956 4y ago

Insulin pricing isn't entirely IP issue; it's been out of protection and available as a generic for many decades now. The issue is that while insulin is actually quite cheap to make once you get started, the startup-costs associated with getting to that point are quite hefty: lab real estate, equipment to make and purify, FDA fees, etc. Newer versions of insulin are "better" than generic insulin: easier to take, fewer side effects, etc. The major insulin producers have been slowly doling out minor improvements over time, about every decade or so, to maintain IP protection on these newer modern versions of insulin, and the high prices associated with these newer versions. They've also been paying off several generics manufacturers to delay them from manufacturing generic versions of these modern versions as the patents expire.

cma 4y ago
> They've also been paying off several generics manufacturers to delay them from manufacturing generic versions of these modern versions as the patents expire. Isn't that already illegal (price fixing/collusion)? How are they structuring the deals to avoid prosecution?
outworlder 4y ago
> Newer versions of insulin are "better" than generic insulin: easier to take, fewer side effects, etc. Even that is debatable. At least Sanofi has been known to fund some rosy articles about their Lantus® product. When the EU looked into it (for similar initiatives) they were not able to find the large 'performance' gap that was suggested between that insulin and alternatives.
- davikr 4y ago
  As far as I know, the major difference between insulin types is not their performance, but how long they take to act, when they peak and for how long they have an effect. Some types of insulin, like glargine (as in Lantus®) can be more convenient due to their long-acting response that lasts for an entire day. I suppose off-patent insulin could be produced with some degree of inconvenience to the consumer because they might have to take more doses per day, but they should work nonetheless.

olliej 4y ago

You know developing insulin doesn't require violating patents, right? And the price of insulin in the US is entirely an artifact of monopoly behavior by a small number of pharmaceutical companies? The ability to mass produce insulin at negligible cost has been around for decades, they guy who discovered it made it patent free even. Only in the US do companies get away with this kind of price gouging, and only because of monopolistic (or I get oligopolistic?) behavior and BS legal threats against anyone that might impact their profiteering off the work of others (paying off competitors not to compete, and BS patents on minor changes, with applications carefully scattered to maximize length of coverage). The only reason it's taking someone the size of CA to actually do something, is because the Pharma companies buy out, pay off, or lawyer into oblivion anyone else. All strategies that normally work because the victims of the (to me) clearly illegal monopoly based actions aren't incurring costs if they stop, whereas the gouging and monopoly tactics cost CA huge amounts annually. The only thing Pharma could do to make it worth CA not doing this would be to stop price gouging, which is of course the only reason CA is doing this. That price gouging is illegal if it's some dude hoarding toilet paper, but not when it's insulin being sold by multi-billion dollar corporations remains absurd. That people come to defend the "IP rights" of these organizations and their BS patents is a really American phenomenon.

deleted 4y ago
[deleted]
basch 4y ago
Insulin is cheap. Long acting insulin is not. They are different products, and the formers patent being free has nothing to do with the later innovations being locked down.
- zaroth 4y ago
  Even the modern rapid acting insulin that doctors are prescribing (Humalog, Basaglar, etc.) can be very expensive. CVS filled a month supply for me after my insurance number had changed and when I went to pick it up they kindly asked for $1300 before I gave them the new insurance info.

m3kw9 4y ago

It’s only the modified versions that are protected and still only for 10 years, so the govt can choose a mod that has its patent expired

deleted 4y ago

[deleted]

outworlder 4y ago

> Is California just going to ignore these intellectual property laws? How will the state not be liable for damages when individuals are? Insulin can be made without breaking patents. Unless you specifically require something branded as Lantus®, for example(which is in no small part due to publications funded by pharmaceutical companies themselves, but also some 'marketing' straight to doctors). There are other longer lasting insulin formulations that can be made. There are hurdles if you take that route (as described in the article). Many are financial. One is regulatory (biosimilars).

jjk166 4y ago
> But pharma companies are savvy about finding ways to extend their monopolies, with insulin and other drugs, by making minor tweaks to the chemical compound and asking for a patent extension. In the case of insulin, the companies can also modify the delivery device to protect their market share. Each product is meant to be used with specific, company-designed injectors. Though the patents on the artificial insulin developed in the 1990s have started expiring, these companies continue to hold and extend monopolies on either their devices or other chemical compounds, making it harder for generic competitors to enter the market. > Other federal regulations have added to the challenge. The FDA began to treat insulin as a biologic drug in 2020 — meaning it is made with living materials instead of combining chemicals like conventional pharmaceuticals — which comes with a different set of standards for generic versions, which are known as biosimilars, as well as manufacturing challenges given the precise conditions these products must be made in. Biosimilars can cost up to $250 million to produce and take up to eight years to bring to the market, versus a one-year investment of as little as $1 million for conventional generics. And unless the FDA recognizes a new generic insulin as interchangeable with the products already on the market, health insurers might not want to cover it and doctors may not be willing to prescribe it. Seems like the barriers for a state entity are exactly the same as the barriers for private generic drug manufacturers, and the state could easily just stop erecting these barriers.

ak217 4y ago

Nothing weird about that, it's the essence of federalism. The resilience of the American system of government is attributable in large part to federalism, the marketplace of ideas from the states competing with each other. There is no patent on insulin, just regulatory capture on which proprietary analogs are approved for medical use. In 2020 the FDA changed the regulatory status of insulin, signaling that it's not going to let that regulatory capture continue. But if it does, there will be a lawsuit, it will go to the Supreme Court, and the pharma companies' arguments will probably get thrown out.

plussed_reader 4y ago
[flagged]

voakbasda 4y ago

IANAL, but they may not be ignoring those laws; they may be planning to fight them. That cannot happen without standing, which may be easiest to obtain by trying to move forward with this plan. I suspect they would be breaking federal laws, so I believe consideration of the State's 10th Amendment rights applies here. That would be wonderful and hope that this case brings that topic into the spotlight, because I see 90% of the federal government as being grossly unconstitutional on that basis alone. Personally, I suspect the market leaders would not want to face the courts, because the exposure would be horrible PR that affects all of their product lines. Moreover, an aggressive and concerted effort to block this effort should be viewed as the anti-competitive behavior of a cartel, which is the status quo de facto that the State is effectively trying to disrupt. I don't see such a challenge as anything but a lose-lose for those companies. Hopefully, they take the bait and do something stupid that leads to reform at the national level.

kmeisthax 4y ago
We already have precedent for a state outright saying "fuck copyright": Blackbeard's Law[0]. North Carolina copied a photographer's images and then passed a law saying the images were part of the public record and thus not copyrightable. The photographer sued to get the law repealed but SCOTUS decided that sovereign immunity meant there was no standing to overturn the law. An interesting wrinkle is that Congress already foresaw this and passed a law decades ago waiving state sovereign immunity for patent and copyright claims. But then SCOTUS overturned the patent prong of this federal waiver on the grounds that Congress hadn't proven that states had a pattern of telling patent holders to go fuck themselves. And SCOTUS's reasoning for striking down the suit about Blackbeard's Law was that this also held true for the copyright prong of that law... despite being handed a brazen example of a state nullifying copyright law for their own gain on a silver platter. What this technically means is that your state could, tomorrow, run their own pirate streaming site and not get sued for it[1]. The only way to stop it legally would be to sue end users, which would be difficult to do for a direct download service[2]. As for antitrust and cartels, since copyright and patents are legal, government-granted monopolies, most courts are very loathe to attack them even when they are used in ways that violate antitrust law. You can see this in FTC v. Qualcomm, where an appeals court smacked down an antitrust ruling for this reason. Compounding this is the fact that a very large contingent of judges have been slowly nullifying antitrust since the 1980s under the "consumer welfare" theory that every tech company is built to maximally exploit. I could see California getting away with bloodying Eli Lily & Co's nose. But I would not count on this becoming a future model for evading (ab)use of the patent system. Remember, all the states are still part of a federal government that is very much in favor of the patent system as currently constituted, and there are still things they can do to block California. [0] https://nsglc.olemiss.edu/blog/2020/apr/2/index.html https://nsglc.olemiss.edu/blog/2020/apr/2/index.html [1] Assuming your state had not already waived sovereign immunity for copyright [2] It's commonly believed that you can't sue for downloads, only uploads. This isn't quite true. At least one court has outright said that both are illegal but infringe on different exclusive rights. I don't remember which court.

HDThoreaun 4y ago

Insulin is off patent. There are new versions that offer a variety of benefits under patent, but just generic insulin can be made by anyone who passes the governments regulations. Walmart is known for offering generic insulin at lower prices.

coredog64 4y ago
Walmart presumably has a bulk sales deal with Novo Nordisk. The latter actually produces the “ReliOn” brand sold at Walmart.

projektfu 4y ago

A lot of formerly protected insulins, e.g. insulin glargine, are off patent now. The remaining moat for generics consists of FDA approval, delivery system patents, and manufacturing process patents/trade secrets. For a generic insulin to get FDA approval it needs bioequivalence which is a lot like running the original safety and effect studies over again, while dealing with spurious injunctions and the like from the company with the name brand. If you get to the finish line as a private company, you're going to price it where you can get some of the market but not get into a price war with the name brand. California, on the other hand, is paying a lot of money to Novo Nordisk et al, and would benefit from reaching a low average price. They can afford to go through the approval process with all the important insulin analogs. And they won't go bankrupt in court before it pays off.

deleted 4y ago
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RcouF1uZ4gsC 4y ago
>. For a generic insulin to get FDA approval it needs bioequivalence which is a lot like running the original safety and effect studies over again That is incorrect. A bioequivalence study is much simpler and cheaper than the original safety and efficacy studies. You do not need to prove that safety and efficacy of the drug, only that you are delivering the equivalent of the originally studied drug at the same doses. https://en.wikipedia.org/wiki/Bioequivalence https://en.wikipedia.org/wiki/Bioequivalence
- junofan 4y ago
  No, the submission packages for anything chronically administered (like insulin follow-on) are way more comprehensive.
  - projektfu 4y ago
    Thank you. Insulin, being a biological, can't prove equivalence through just equivalent pharmacokinetics and contents.

zackees 4y ago

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standardUser 4y ago

>> Is California just going to ignore these intellectual property laws? Like they ignored asinine federal drugs laws? I hope so!

lotsofpulp 4y ago
California is not ignoring federal drug laws. California has no mandate to enforce federal drug laws. Rather, the executive branch of the federal government is choosing to not enforce federal drug laws (in some situations, for some drugs). Federal agents can walk in and charge everyone in a cannabis store anytime they want, as I understand it.

skeletal88 4y ago

If it was about intellectual property then it would not be tens of times cheaper in the EU and other countries. Insulin is not something new and advanced that needs special protection

blendergeek 4y ago

> Is California just going to ignore these laws? How will the state not be liable for damages when individuals are? IANAL. But would this be similar to Jim Olive Photography v. University of Houston System? https://fairuse.stanford.edu/case/jim-olive-photography-v-university-of-houston-system/ https://fairuse.stanford.edu/case/jim-olive-photography-v-un...

fallingfrog 4y ago

The inventor of insulin sold the patent in 1923 to the University of Toronto for one dollar so that nobody could take advantage of people in the way that's currently being done. This is 100 year old technology. It has nothing to do with development cost. https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expensive https://www.vox.com/2019/4/3/18293950/why-is-insulin-so-expe...

coredog64 4y ago
There’s not a single word in that entire article that calls out that modern insulin products are not the same animal-derived insulin that was isolated 100 years ago.

vippy 4y ago

nah, that's some goofy libertarian take. easier to blame the government than monopolistic behavior by pharma corporations and private actors.

roenxi 4y ago

Not knowing anything about the specifics of California, but bad law here seems to follow a rough process: 1. Centralise power in a regulatory body that will raise costs every time something goes wrong. 2. The barrier to getting things done rises until there is a crisis. 3. The barrier is so high only someone behaving like a financial illiterate would enter the market, so legislators task government with entering the market or underwriting someone who can. So I'd assume that legal ability that was ever the problem. Usually it is regulatory requirements implying a minimum size of the actor needed to take on the risk. I see a few comments that this time around the technical term implementing this for insulin is "bioequivalence" but the broader pattern applies in a few markets and should be called out.

CodeWriter23 4y ago

What you’re missing here, just like how everything runs in California (and perhaps in most places), the government won’t be in the business of manufacturing insulin. They will choose a winner to be the subcontractor to produce the product. That firm will meet a price point for the duration of the contract and then renegotiate. Or go into the market like the other players.

PragmaticPulp 4y ago

> I feel like I'm missing something here. My understanding of why insulin is so expensive: laws are created and enforced by the government preventing people from competing in the space The article doesn't do a good job of explaining that "insulin" isn't a single drug, or at least how they describe it. Generic insulin is cheap. You can get it for $25/vial from your local Walmart. With production costs, regulation compliance, storage, transport, and paying pharmacists, they're not making much profit on that. Patented insulin analogs are not cheap. They have different characteristics for duration and onset time that make them easier to dose, but the patent means that you can't produce and sell it unless you own the patent or have licensed it. Drug companies who own these patents set their prices according to what they can get insurers to pay, not according to what they expect people to pay out of pocket. One of the weird quirks of the US medical system is that drug companies often have alternate prices for people without insurance. Remember, the high prices aren't designed for you to pay, the high prices are designed to extract as much money as possible from your insurance company. You can see this in action on drug company websites. Lilly has a program that will cap your payments at $35 for even their expensive insulin analogs: https://www.insulinaffordability.com/ https://www.insulinaffordability.com/ You have to renew every 12 months and hope they're still doing it, but they generally keep these programs around because it dampens the outrage about the high prices.

refurb 4y ago

Its ridiculous initiative is why. California will make insulins already off patent. Ones where lower cost versions are already available. It would be far smarter to just subsidize existing versions. But it doesnt solve the problem that the latest cutting edge patented insulins cant be copied by the government.