Why is insulin dominated by a few companies globally and if bacteria are used to produce human insulin, why can no other company replicate this?
In: Biology
In the USA there are a bunch of laws that make it really expensive, difficult, complicated, and time consuming for new companies to start manufacturing or selling drugs. So there is little incentive to compete with the existing companies when there are so many other things your business could do instead.
From https://slatestarcodex.com/2019/04/30/buspirone-shortage-in-healthcaristan-ssr/:
>The story goes something like this. The FDA demanded that generic drug manufacturers pass FDA inspection before setting up shop. But the FDA didn’t have enough inspectors to review manufacturers in a timely manner. So companies kept asking the FDA for permission to enter the generics market, and the FDA kept telling them there was a several year waiting period. In 2012, Congress recognized the problem. Politicians, FDA officials, and industry leaders agreed on a new policy where generic drug manufacturing companies would pay the FDA lots of money (about $300 million last time anyone checked), and the FDA would use that money to hire inspectors so they could clear their backlog of applications.
>The good news is, the FDA hired lots more inspectors and they are now pretty good at responding to generic drug applications in a timely way. The bad news is that the fees to the companies were designed in a way that subtly encouraged monopolies in generic drug markets. I don’t understand all the specifics, but there seem to be two main problems.
>First, if you manufacture a drug, the FDA will charge you a fee, but the fee doesn’t scale linearly with how much of the drug you produce. So suppose Martin Shkreli owns a very big Daraprim factory. The FDA might charge him $1 million per year to fund their inspectors. Suppose you are a small businessman who is angry at Martin Shkreli’s fee hike, and you want to open a competing Daraprim factory in your small town, using your small amount of personal savings. Probably your factory will be much smaller than Martin Shkreli’s. But the FDA will still charge you the same $1 million per year. At worst this means you make no profit; even at best, Shkreli’s economy of scale gives him a big advantage over you. So you may decide not to enter the market at all
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