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
When you invent something you can get a protection for that thing known as a “patent,” which prevents others from taking or using that idea for a period of time, usually 20 years in the United States. This is done to encourage innovation, as even the smallest inventor can take advantage of a good idea and make money off of it. If you invent something a major company cannot just start making your invention and take all the money, because you have a patent and could sue. After the patent expires others can make and use whatever was patented.
With drugs what this means is that 20 years after a pharmaceutical company makes a new drug other companies make it too. These drugs, known as “generic drugs,” are the exact same drug and are usually cheaper, often much more so. When a drug is patented you can charge whatever you want because you are the only one who makes it. You also charge more because you want to make back the money you spent researching and developing the drug, which can be a massive amount of money. Because generics are cheaper pharmaceutical companies usually drop the price of the name brand drug when the patent expires. Since the drugs are exactly the same there is no real reason to pay 10 times as much for the brand name.
However these generic drugs are only covered by most insurance if they are considered “therapeutically equivalent.” So if you are prescribed Examplein your insurance company will cover a generic drug that is exactly the same, but not a generic drug that is similar but not the same.
So when the patent is about to expire the companies that make insulin change the formula or process just enough to get a new patent and make it so that the generic insulin is not therapeutically equivalent to the new stuff. Because the generic is not “therapeutically equivalent” it won’t be covered by most insurance and the companies can continue to charge top dollar.
The obvious solution would be to ban this practice, but that isn’t really possible, or at least it is much harder than it sounds. The companies that are making these changes are actually improving the product, the newer forms of insulin are better than the old ones. Banning this would mean that people would not have a reason to try and improve a pharmaceutical that already exists because they couldn’t make money on it. In addition that kind of change would predominantly hurt small companies and inventors for a bunch of reasons that won’t fit here.
TL;DR: It’s not that nobody else can replicate insulin, it is that you are not allowed to replicate the specific type(s) of insulin that these major companies produce, which means that generic (and much cheaper) forms of insulin are not covered by most health insurance.
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