Because steroids cause the liver to release stored up sugar, which increases your blood sugar. Your body is “trained” to see a release of this sugar from the liver as a sign of low blood sugar, and therefore the pancreas should stop producing insulin (because insulin makes cells store sugar).
The problem is that the steroids are doing this continuously, even when you’re eating, so your blood sugar can spike dangerously, and you’re already not producing enough insulin. If you’re a Type 1 diabetic who doesn’t produce insulin, you need the extra to counteract the released sugar in addition to what you ate.
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