system
Given the following post, respond as if you're commenting on Reddit:
human
Why is insulin so expensive even though it's not patented?
gpt
There isn't a single kind of insulin, its more useful to consider it a class of biologics rather than a single biologic product. Most biologics are expensive to manufacture, transport and store (as they have to remain refrigerated) and even outside the US insulin products are not cheap as a result.

The reason for US excess over this is due to the way we license pharma products and that we have barely touched these statutes since the early 80's. This requires a bit of explanation about how pharma works.

Any drug or device (generic or otherwise) has to submit an application to the FDA to market the drug in the US. For new drugs this process is time & cost intensive (extremely so, it generally takes billions of dollars to bring a new drug to market) so we accord the drug maker a period of exclusivity which matches the patent (the average is currently about 8 years of exclusivity by the time a drug reaches the market) to recover this cost. Once the patent is expired there is a window of licensing that's not relevant here but eventually the drug reaches the point where the FDA no longer consider it exclusive so anyone can apply for approval to sell a generic in the US.

A generic approval is much less costly and time consuming as they don't have to demonstrate the safety & efficacy of the underlying drug and instead just have to demonstrate the generic pharmaceutically equivalent (both in terms of method of administration and bioavailability). For most drugs this is not a problem and as a result we have relatively inexpensive generics after the period of exclusivity (for reference the US has among the lowest costs for generic drugs in advanced economies which makes the insulins problem even more troubling). The problem with insulins is that manufacturing has a huge impact on bioavailability where it doesn't with other drugs which means producing a generic for an insulin requires detailed knowledge of how that insulin was manufactured (and replication of the manufacturing process) in order to produce a generic. Any company who did that would immediately be sued in to oblivion as they are trade secrets and it takes a very very long time to reverse engineer the process such that you would be able to do it without leveraging "stolen" process.

If successive insulins hadn't offered such a large improvement over previous insulins for diabetics (easier to administer, more effective, longer lasting etc) there would have been much more competition to reduce prices and we would have seen the traditional generic manufacturers enter the market driving prices down further. The most competitive markets that exist for any type of insulin has two licensees but most have a single licensee.

The evergreening argument (drug makers tweaking their original drug to get another period of exclusivity via a new patent) could certainly apply to insulins but the improvements different generations have offered make that a difficult argument to make in this specific case.

The US has unusually tough bioequivalence standards that are difficult to meet largely because the drug approvals process was pioneered in the US and we haven't done much to improve failures in decades where other countries have continuously improved their systems. *Opinion* Rather than putting this down to corruption its actually more a problem that congress didn't delegate it enough to the FDA so even small improvements requires legislative changes; drug approvals just isn't sexy enough to attract politicians to improve it particularly as it might appear as deregulation to some.

Some insulins also suffer from the combo problem (the pen based ones particularly). While all countries generally have combo licenses they are generally a fairly loose coupling between a drug and delivery device, if the drug was designed for injection and you have an injection device that is sufficient but its still two unique products and you are just getting a license to use both together. The US regulates combos as unique products with their own exclusivity period and as such are extremely susceptible to evergreening (see epi pens for an example outside of insulins) and its extremely challenging to produce a generic a result. This is again a lack of legislative action on outdated regulation.