Serious question: what stops a company in the US from, tomorrow, setting up shop and making the insulin recipe from 14 years ago? Is it FDA regulations?
Nothing much. FDA regulations are a major hurdle though, and means you'd need to sell a pretty high volume to break even, but nothing insane.
Problem: You set up shop, you make up a big batch of generic insulin and then...you don't sell any, because doctors aren't prescribing it. Why would they? Most probably haven't heard of it, and the ones who have will also know (correctly) that the patented improvements may be minor improvements, but they are improvements. All you've got to compete on is cost, but the doctors aren't paying the cost. Nor are the majority of their customers; they have insurance. The minority who are paying the cost directly would probably prefer a cheaper option, but that would require them to hear of it, and it's not clear there's enough of them to cover your overheads even if they did hear of it, and your generic drug margins don't cover the cost of the massive marketing campaign you'd need; you're not selling Viagra here.
Your success will rely on getting the big insurers to stop covering the better forms of insulin, or at least stop covering it in the general case. Which they absolutely should do! And the second one of them tries the "insulin cartel" will do a little lobbying, and some patient groups will express outrage, and a congressman will start talking about hearings, and the NYT will run an nominally balanced news piece about insurance company greed forcing diabetics onto archaic, inferior forms of insulin, and the insurance company will give up, because hell, they just pass the costs on in the form of premiums; it's no skin off their nose.
And you'll go under. And the worst part is, there's no big conspiracy or villain. The system is just incredibly screwed up.
From your story, it sort of sounds like doctors are the villains. Isn't it their job to choose the best medicine for their patients. If an uninsured patient asks for a cheaper older one, then they should be prepared to find that. But then perhaps you could pass the buck to the patient for not finding a doctor willing to search for cheap drugs. It just goes round in circles.
For insulin, is there even such as thing as "better"? It's not treating a disease with some probability of success that you want to maximize. It either works or it doesn't. At least that's my limited understanding.
Well presumably, if current regulations did not turn out to be a lethal roadblock and a pharma company was lucky enough to become successful - and new regulations were not created as a response to new market entrants (via lobbying/agency collusion) nor were illegal marketing practices utilized [1] - then they will likely just get acquired by the big corps.
There are plenty of good reasons there are only ever ~6 pharma companies and most have been around for 150yrs. There are few markets where oligopolies have maintained power for as long and as consistently as pharma. A few reasons why:
- Plenty of capital to support M&A
- Legendary regulatory hurdles for new entrants
- An obedient judicial system where the annual major legal cases for illegal marketing by big pharma cos result in a slap on the wrist
