Diabetes, Inc.

Image Credit: Bill Oxford at Unsplash

Background: the insulin patent

In 1921, a research team at the University of Toronto’s Connaught Laboratories developed a process to extract insulin from the pancreas of a cow which they used to treat 14-year old Leonard Thompson who was near death. The news of Thompson’s miraculous recovery swept around the world and very soon there was a demand for insulin that overwhelmed the small Canadian laboratory where the pioneering work took place.  

At the time, the regulatory landscape in most countries governing pharmaceuticals was contested territory, with the industry, pharmacists, retailers, physicians and public health bodies vying for position and influence. There were rising concerns about whether a drug was a medicine that could cure you or a poison that would kill you, leading to demands for a regulatory framework to protect the public.[1]

There were public debates about how best to guarantee the effectiveness and safety of drugs. The drug industry argued that newly-patented, branded medicines were safer, more effective and therefore more trustworthy than chemicals compounded in local pharmacies – and certainly safer than home recipes handed down from one generation of women to the next. But the industry didn’t represent the prevailing view. One popular magazine, for example, editorialized that ethical considerations should persuade conscientious scientists to avoid any association with “the rapacious dealers in ‘patent medicine’ – a crew that have plagued human kind for centuries…”[2] 

The discovery of insulin thrust co-discoverers Frederick Banting, Charles Best and James Collip into the midst of this debate. The University of Toronto argued that an insulin patent was necessary to protect patients from unscrupulous manufacturers who would market substandard or even dangerous versions of the new miracle drug. In the end, the co-discoverers became reluctant patentees who very quickly assigned their rights in whole to the University for $1 each. As Professor JRR Macleod, who had directed the research team, explained in 1924, the sole purpose of the patent was to “[prevent] any other person from taking out a similar patent which might restrict the preparation of Insulin.”[3] 

The overriding objective of the University’s newly-established Insulin Committee, Macleod said, was to ensure that “the best Insulin is supplied at the lowest cost” to countries around the world. The patentees insisted that the University widely publish the rationale behind the patent so that their reputations would not be sullied.[4] In the decades that followed, almost every Canadian child diagnosed with diabetes would learn that the co-discoverers had selflessly provided a gift of life to the country and the world, something that would help frame a mythology and culture surrounding the story of insulin. 

Fast forward to the dawn of biotechnology

The environment in which recombinant human insulin (RHI) was developed could not have been more different than the one that existed in 1921. In the United States, there were three main research sites involved in efforts to clone the insulin gene: Harvard, the University of California at San Francisco, and a small San Francisco-based biotech start-up called Genentech.[5] Competition among the researchers was fierce, something encouraged by insulin manufacturer Eli Lilly, which in August 1978 made financial arrangements with two of the three research teams – UCSF and Genentech.[6] That month, Genentech announced they had won the race to clone the human insulin gene sequence. The next day, the young start-up filed a patent on the process used and signed an exclusive licensing agreement with Eli Lilly. Across the Atlantic, meanwhile, Novo Industri, Lilly’s archrival on the world insulin stage, was also rushing its version of synthetic human insulin to the market.

There are differing views as to why insulin was chosen as the first product of the emerging biotechnology industry in the late 1970s. While Lilly and Novo had different versions of what they called “human” insulin, their marketing strategies were remarkably similar, with both claiming the needs of diabetes patients were their top priorities. This, as it turned out, was not the case.

In the early 1980s, the global insulin market, dominated by Novo Industri (later Novo Nordisk) and Eli Lilly, was worth an estimated US $400 million,[7] about 25% of which was earned in the United States where Eli Lilly held near-monopoly control.[8] The two companies were seeking to expand their reach, Novo into the North American market and Lilly into Europe, each using gene technology to boost their fortunes. According to an article in the Financial Times of London, in the “fiercely competitive drug market, a better form of therapy in almost any field can bring its creators billions of dollars in sales.” However, “an imitative product [like human insulin], even if it is produced by dazzling methods, is very likely to flop. The only sure way to turn a so-what product into a sizzler is through aggressive marketing.”[9]

Telling the world that recombinant human insulin was introduced to help further each company’s global marketing strategies and increase profits was not an effective way to win over a public that, at the time, was skeptical about the benefits of biotechnology. So, both companies had to find a different, more compelling back story. Two claims, both false, helped to win over most physicians, industry-funded patient advocacy groups, elected officials and the media. 

The first story, heavily marketed by Eli Lilly, was about a pending shortage of pancreas glands that would leave Type 1 diabetics without access to the only medicine that kept them alive. A new approach to producing insulin was thus urgently needed, the manufacturer claimed. But, in 1978, a Department of Health, Education and Welfare (HEW) study concluded it was “clear that no shortage of insulin is anticipated in the next 20 years.” Furthermore, the study said, the current “model of insulin supply and demand is a dynamic one, … with the components interacting in a manner that would tend to delay a shortage.”[10]

And while it was issuing dire warnings about a future shortage, Lilly was being investigated by the U.S. Federal Trade Commission on allegations that it violated competition laws in the market for pancreas glands. Three complaints had been filed by U.S. meat packers who alleged that, since 1952, Lilly had conspired with domestic and foreign firms to fix prices and monopolize the market for beef and pork pancreas glands as well as for finished insulin.[11]

A second claim by the companies was that diabetics showed a lower immune response to RHI and a decline in insulin antibodies when compared to animal insulin. In spite of the evidence, which showed that antibody levels in people using animal and recombinant insulins “did not show relevant dissimilarities” Novo Nordisk told patients they would develop “fewer antibodies when treated with human insulin.” One Eli Lilly representative argued that “Animal insulin… produces antibodies when used in humans, that is, the body recognizes it as a foreign protein. That is why human insulins were invented and brought to the market in Canada in 1983.”[12]

Nice try, but not true 

These two claims – elevated antibody levels and a pending shortage of glands – were reflected in most of Lilly’s early promotion of its “genetically accurate insulin.”[13] But Robert Swanson, co-founder of Genentech, gave a different and more plausible explanation. In 1984, Swanson told Esquire Magazine that, “the first product [of biotechnology] should have an existing market.” After all, he said, “as a first product you really couldn’t afford to have what they call a ‘missionary’ marketing effort. And the economics of production would have to compare favourably to the way it is produced currently.”[14]

“Missionary marketing” describes efforts to educate consumers about the need for a new, untested creation, something that can cost companies a significant amount of money depending on the product. However, there was no need to create a new market for insulin, which already was being purchased by millions of diabetics. Insulin was, in many ways, the perfect product to launch biotechnology into a world that was not only wary about the science but concerned about the patenting of human genetic material. But very few people needed to be convinced that insulin was essential in the treatment of diabetes, a serious chronic disease. Manufacturers only had to persuade the public that human insulin could guarantee uninterrupted, limitless supplies of a vital medicine and was, if not less expensive, newer and better.

Both insulin producers designed much of their marketing campaigns for recombinant human insulin around the theme that they had responded to an urgent problem. That view was challenged by a number of leading experts, including Peter Watkins, a diabetologist and consulting physician at Kings College of Medicine in London, who pointed out that, “…specific indications for using so-called human insulin are very rare. Insulin allergies occur perhaps once in many thousands of cases.”[15] But it didn’t matter what the science suggested – Eli Lilly and Novo Nordisk weren’t interested in a market made up of exceptions to the rule. Irving Johnson, Vice President of Research at Eli Lilly, foreshadowed that a key marketing tactic to be used by the company would be manipulating public sensibilities about the use of animal glands for medicine. “Which would you like to inject,” he asked a reporter in 1983, “something that’s human, or something from a pig?”[16]

In 1995, Novo Nordisk began to pull all of its animal insulin products from markets around the world and within ten years it announced its plans to withdraw the last of its “old insulins” derived from beef and pork pancreata. In a statement, the company claimed this step was necessary so it could focus on research, although it wasn’t clear how or why older insulins prevented it from investigating improvements in insulin therapy. Two years later, Eli Lilly announced it would cease production of its entire line of Iletin beef/pork insulin products[17] and eight years later it withdrew the last remaining pork insulin, along with two long-acting recombinant insulins, from the global market. 

Governments around the world sat on their hands as Eli Lilly and Novo Nordisk implemented a global withdrawal of animal insulin. The assertion that regulators were helpless to intervene established a dangerous precedent that was repeated in 2010 when Novo unveiled plans to withdraw all of its non-analogue brands, beginning with the most popular rDNA human insulin, Mixtard 30. Like their predecessors who relied on animal insulin, patients were forced to shift to more expensive and patented brands. In 2001, Sanofi introduced its long-acting insulin analogue, glargine (trade name Lantus), and now has filed 74 applications on the heavily marketed brand. Today, the manipulation of the patent systemis allowing insulin producers to keep raising the price on analogues while keeping competitors from introducing lower-cost biosimilar alternatives. Insulin devices, such as pens, inhalers and pumps, have enabled the three global corporations to extend their insulin patents. According to Health Action International, more than half of all insulin patents are actually on the insulin-containing delivery device. 

Conclusion 

The biotech revolution has had a dramatic impact on people with diabetes, undermining secure access to reliable and ongoing supplies of insulin products that work well for them and are affordable. Biotechnology has enabled manufacturers – in the absence of any public oversight, intervention or regulation – to develop a strategy based on the replacement of off-patent insulins with newer and more expensive brands and delivery devices. Animal insulins were the first to be withdrawn, and today the first-run lower-cost rDNA human insulins appear destined for the scrap heap. But instead of having access to a more affordable and broader range of options, patients are being shifted to whatever manufacturers have on offer, in this case high-cost analogues. Many patients report that analogues provide greater flexibility and less harm associated with unexpected, severe hypoglycaemia, including at night, as well as  diabetic ketoacidosis. But the published evidence has not shown analogues are a significant improvement for diabetics in terms of long-term complications and mortality compared to recombinant human insulins.[18] 

Biotechnology has boosted the insulin profits of Eli Lilly and Novo Nordisk, along with newcomer Sanofi. These companies now dominate 95% of the global market, wiping out domestic producers in country after country. In 2019, the world insulin market was estimated to be worth nearly US $26 billion– a far distance from the $400 million market that Eli Lilly and Novo Nordisk dominated in the early 1980s. The price of insulin varies from country to country, but even where it is sold for the equivalent of US $30, the companies spend an estimated US $5 per 10ml vial to produce it and so are making fantastic profits. The introduction of recombinant human insulin products that were less stable and predictable than older, animal-sourced insulins has also increased reliance on external supports such as glucose monitors and insulin pumps, worth an estimated US $32.4 billion in 2018. 

Any technology, including genetic engineering, should be designed to increase options and decrease the burden of diabetes on individuals, families and communities. Instead, the opposite has occurred. The costs associated with the condition have jumped around the world, pricing many who need insulin out of the market, while the reported harms linked to insulin have increased in number and severity during the last 40 years.[19] The United States made up 25% of the world market in 1983; today that figure has jumped to 52%. Many Americans who have Type 2 diabetes should not be treated with insulin at all, yet they are a targeted by manufacturers because they represent a larger market. Meanwhile, half of the world’s people who need insulin face financial and other barriers when trying to access it. People who need insulin struggle to access it either because it is too costly or because manufacturers don’t provide it. Biotechnology has boosted the fortunes of manufacturers, but it has increased the burden for people who need insulin.  

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[1] For a fascinating history of this period, see Malleck, D. “When good drugs go bad.” UBC Press, Vancouver, BC/London, England; 2016.

[2] See Editorial, “A Step Forward in Medical Ethics,” World’s Work Magazine, February 1923. Archived at the University of Toronto, Fisher Library, Digital Collections: The Discovery and Early Development of Insulin, available at http://tinyurl.com/yarm4yfw. 

[3] Statement read by J.J.R. Macleod at the Insulin Committee meeting regarding patents and royalties. 28 April 1924. Available at http://tinyurl.com/y7v98gnh.

[4] Letter from Frederick Banting to Sir Robert Falconer, President of the University of Toronto, 27 January 1923. 

[5] Hall, Stephen S. 1987. Invisible Frontiers: The Race to Synthesize a Human Gene. Redmond, WA: Tempus Press. Hall’s book is an authoritative description of the research that led to the development of recombinant human insulin. 

[6] Scott, Stern. “Incentives and Focus in University and Industrial Research: The Case of Synthetic Insulin” in N. Rosenberg, A. Gelijns and H. Dawkins (eds), Sources of Medical Technology: Universities and Industry. Washington DC: National Academy of Sciences, 1995. 

[7] Brady, R. “Healthy competition.” Forbes Magazine, May 23, 1983. This is about $1 billion in current US dollars.

[8] “Rushing with synthetic insulins,” Chemical Week, March 2, 1983. At the time Novo controlled approximately 60% of the European market. 

[9] “Human insulin fights for a market share,” Financial Times (London), 28 April 1983. 

[10] A study of insulin supply and demand (1978). A report of the National Diabetes Advisory Board. US Department of Health Education and Welfare; Publication No. (NIH) 78-1588, Washington DC. 

[11] United States Federal Trade Commission: Complaint in the Matter of Eli Lilly and Company. Consent Order, etc., in regard to alleged violations of Sec. 5 of the Federal Trade Commission Act and Sec. 7 of the Clayton Act. Docket C-3021. Complaint, April 29, 1980; Decision April 29, 1980.

[12] Letter to Helga Kellner from Mark Fleming, Manager, Boehringer Mannheim/Lilly Canada Diabetes Care, July 8, 1996. Ms. Kellner had written to the company about the harm experienced by her son when he was switched to Humulin. 

[13] Barese, P; Brandenberger, A; Krishna, V. (1992), “The Race to Develop Human Insulin.” Harvard Business School, Case Study No. 191121.

[14] Rothenberg, Randall. 1984. “Robert A. Swanson, Chief Genetic Officer,” Esquire, December: 366-74. 

[15] “Human insulin fights for a market share,” Carla Rapport, Financial Times (London), 28 April 1983.

[16] ibid.

[17] Eastman, Ben. “Essential or Expendable? Eli Lilly Puts Beef/Pork Insulin on the Endangered Species List.” Diabetes Interview, October 1997.

[18] Animal insulins, many noted for their longer and flatter action profiles, are no longer used as a comparator. However, many studies do compare analogues with “human” insulin. A 2006 review of 49 randomised controlled studies comparing short-acting insulin analogues with regular “human” insulin found that none were designed “to investigate possible long term effects (e.g. mortality, diabetic complications), in particular in patients with diabetes related complications.” See Siebenhofer A, Plank J, Berghold A, Jeitler K, Horvath K, Narath M, Gfrerer R, Pieber TR. Short acting insulin analogues versus regular human insulin in patients with diabetes mellitus. Cochrane Database of Systematic Reviews 2006, Issue 2. Art. No.: CD003287. DOI: 10.1002/14651858.CD003287.pub4.

[19] In 1965, insulin was the 4th most cited drug linked to adverse drug reactions among hospitalized patients in Canada. See Ogilvie RI, Ruedy J (1967) Adverse reactions during hospitalization. Can Med Assoc J 97: 1445–1450. Between 1998 and 2005, insulin was the second most frequent suspect drug in reports of disability or other serious outcome in the database of the US Food & Drug Administration. See Moore  TJ, Cohen MR, Furberg  CD.  Serious adverse drug events reported to the Food and Drug Administration, 1998-2005. Arch Intern Med. 2007;167(16):1752-1759.