China’s Diabetes Cure: America’s Last Hope?

The other day, I came across an interesting tweet.
It mainly said that the U.S. pharmaceutical industry has promised to lobby the Senate and Congress to impose sanctions on China due to its latest breakthrough in the treatment of diabetes.

This suddenly reminded me of a video I had done before.
It was about how the Shanghai Changzheng Hospital, in collaboration with a team of experts from the Chinese Academy of Sciences, used stem cells to regenerate pancreatic islet tissue in vitro, successfully curing a 59-year-old patient with severely impaired pancreatic function, completely eliminating the need for insulin injections.

This technology is a godsend for the 10% of the global population suffering from diabetes – it means nearly 1 billion people around the world now have hope to be completely free of the torment of this disease.
However, before we could even celebrate this, the threat of sanctions looms. Why would the U.S. want to sanction something that is clearly beneficial to all of humanity? The reason is simple – money.
Let’s take a look at how the insulin industry in the U.S. makes its money. The U.S. has over 300 million people, of which around 34 million are diabetics, many of whom rely on insulin injections to maintain a normal, even life-sustaining, existence.
In China, insulin is not an expensive medication – a vial can cost anywhere from a few dozen to a hundred yuan, and the monthly cost for most diabetics is only a hundred or two hundred yuan.
But in the U.S., prior to 2023, the price of insulin was at least 10 times higher, with the cheapest vial costing $275.

In April 2020, then-Senator and current U.S. Vice President Kamala Harris said that one in four American diabetics could not afford insulin.
For the average American with a disposable income of only $20,000 per year, which amounts to around $1,600 per month, the basic treatment costs of at least $275 per vial and at least $6,000 per year are still too high. This accounts for around 10% of the U.S. population, who have to spend 30% of their disposable income just on this medication – an immense burden.
Moreover, the price of insulin in the U.S. market has seen a staggering increase over the past nearly 40 years. Since 1984, the prices of ordinary consumer goods have only risen by a little over double, while the price of insulin has skyrocketed by nearly 14 times.
Novo Nordisk’s insulin, which rose from $40 in 2001 to $289 in 2018.
Eli Lilly’s products, which rose from $21 to $275.
Sanofi, which rose from $35 to $270.
So why are they so expensive? It all starts with the operations of the major insulin giants in the US.
The US currently has only three main insulin suppliers: Eli Lilly, Novo Nordisk and Sanofi.
Over the past decades, the production cost of insulin has not increased significantly. According to a report published on March 27, 2024 by the American Medical Association’s Open Research network, the minimum production cost of a 1000 unit vial of insulin in the US is even less than $1.

The production cost of more portable insulin pen or cartridge formats is $3.7 and $2.14 respectively. Furthermore, the costs of other categories are shockingly low, mostly just a few dollars or even just cents, not even enough to buy a fried chicken. And insulin is not a new drug, so there is no need to recoup R&D costs.
So the outrageous prices of hundreds of dollars per vial are entirely due to the machinations of these three pharmaceutical companies.
To illustrate, let’s look at their annual reports: In 2023, Eli Lilly had total revenues of $34.124 billion and a net profit of $5.24 billion, with R&D spending reaching $9.313 billion. However, their net profit was as high as $6.245 billion in 2022, a $1 billion difference entirely due to price cuts in the US domestic market. In 2023, Novo Nordisk had total revenues of $33.7 billion and a net profit of $12.142 billion, with R&D spending of $4.7 billion. Sanofi had revenues of $47 billion, a net profit of $5.88 billion, and R&D spending of $7.297 billion.
Therefore, we can say that Eli Lilly, Novo Nordisk and Sanofi, the three companies approved to produce insulin, have used patents and distribution channels to control the market and monopolize the US insulin market, constantly manipulating prices.
The so-called new insulins they develop are largely to repeatedly change the manufacturing process and packaging of old drugs, apply for new patents, and obtain legally sanctioned “monopoly” licenses. It’s just like ordinary vitamins – change the bottle, change the packaging, and dare to sell it for hundreds of dollars. The only difference is they’ve applied this tactic to the life-or-death insulin. And it’s the patients who are footing the bill.
Other countries have never seen insulin prices this high. For example, in Europe, which has a development level similar to the US, about 1 in 11 adults has diabetes, totaling about 61 million people. According to the IDF 2021 report, the total diabetes expenditure in Europe is $189 billion, or an average of only $3,100 per person per year, less than half the cost of what Americans pay for insulin alone, which doesn’t even include their hospitalization costs. So the amount each person spends on insulin will be even lower.

In China, through centralized government procurement and the hard work of our employees, we’ve managed to cut the prices of these expensive medical consumables by more than half.
For example, in this year’s medical insurance pricing negotiations, these three American giants were also present, but in China, their prices per vial are only a few tens of RMB, which is less than $10 when converted. Even at these prices, they are still making a profit, so you can imagine the level of profiteering happening in the US at hundreds of dollars per vial.
However, the situation has changed in the last two years, as domestic Chinese insulin companies led by Tonghua Dongbao and Gan & Lee have also been “going global.” For example, in 2023, Gan & Lee Pharmaceutical’s third-generation insulin products have achieved staged victories in their applications in Europe and the US. Their core insulin products Glargin, Lispro, and Aspart not only had their US FDA applications accepted, but also had their European EMA applications formally accepted and entered the scientific evaluation stage. This can be seen as a victory in their global expansion.
At the same time, according to 2023 annual report data, of the three giants, nearly 60% of Eli Lilly’s $200 billion in revenue comes from diabetes-related products, Sanofi has $20.243 billion in revenue from the US market, accounting for nearly 40% of its total revenue, while Novo Nordisk has $14 billion in revenue from its Semaglutide series of antidiabetic drugs, accounting for over 40% of its total revenue.
This means that once the cost-effective Chinese products enter the market, their revenue streams could be severely threatened, although Semaglutide can be transformed into a specialized weight loss drug, which we won’t go into here. So the American giants had to make a show of responding to Vice President Harris’s proposal and announce insulin price reduction plans in the US. On March 1, 2023, Eli Lilly announced that its insulin products will be discounted by 70%, with patient out-of-pocket costs not exceeding $35 per month. On March 14, 2023, Novo Nordisk announced a 75% price cut for its Novolog insulin and 65% price cuts for its human insulin and Levemir.
But do you think they suddenly developed a conscience? Of course not. Because just 8 months after the announcement, Novo Nordisk stopped producing its Levemir insulin product.
Shortly after, in March this year, Eli Lilly announced production constraints on Humalog and said they may discontinue it.
So, have the prices really come down? If they did, it was only temporarily.
Because within a couple months of the prices coming down, the cheaper products were discontinued. The meaning is very clear – my pharmaceutical company’s cheap products are fine, but you all need to be prepared for there being no medicine.
As for Chinese products, with tens of billions of dollars in annual profits, just take out a billion or two, lobby the senators, and write up a proposal to enact a ban. These days, who doesn’t know that shouting “China” is politically correct? And if the common people can’t buy medicine, won’t they take to the streets and make trouble for the federal government?
When the federal government wants to resolve the situation, even if it makes their skin crawl, don’t they still have to kneel down and beg us to resume production? Then wouldn’t the final say on the amount of money be up to us? You see, in the end the Americans will still have to buy what they need, there’s no escaping it.
So the only ones celebrating will be the American pharmaceutical companies. Originally, according to this script, the American pharmaceutical companies could have done it – as long as they didn’t allow Chinese companies access, everything would have developed in a “good” direction.
Whether it’s Trump or Biden, if they want to be president, they have to shout about China. Shouting about China, these companies can then get bans enacted, preserving their domestic market’s excessive profits.
However, these pharmaceutical companies never imagined that China’s new breakthrough would directly overturn the entire industry’s underlying logic. Originally these pharmaceutical companies could rely on the lifelong nature of diabetes, collecting the diabetes “tax” from patients for life. But the new technology can directly cure diabetes, with one-time treatment solving the lifelong problem.
In other words, if this technology matures and the price comes down, the insulin products can basically be thrown away. It’s like the Polish winged hussars charging into battle with their long lances, only to find German tanks charging at them – they’re left completely stunned.
What to do? Sanction! We have to sanction them so they have no market and can’t develop! But the question is, will these sanctions really be effective?
This depends on the domestic market. First, we need to mention a statistic – the number of diabetes patients in China is 140 million. This has already caught up to half of the population of the United States.
At the same time, diabetes has long been synonymous with “affluence disease” in China, and the data also confirms that the incidence of diabetes is closely related to the level of economic development. According to statistics, the provinces with the highest diabetes prevalence are mainly concentrated in Northeast, North China and East China, with Beijing having the highest incidence at 14.8%.
This can also indirectly prove one point – the consumption ability of diabetes patients is generally better than that of other common basic diseases.
Therefore, the market-oriented process of diabetes-related products and technologies will also move relatively faster than those with small markets, low patient bases, and insufficient consumption ability.
Moreover, in the long run, China’s diabetes incidence will continue to grow. According to statistics from The Lancet, China’s adult diabetes DALY rate rose from 547/100,000 person-years in 1990 to 825/100,000 person-years in 2019, an increase of 50.8%, and is expected to further rise to 1165/100,000 person-years by 2030.
It can be said that the diabetes market in China not only has a huge stock, but also a very considerable increment, and is a relatively common public health problem that needs to be urgently solved in the future, with huge long-term demand.
At the same time, according to a market research report on diabetes drugs released by Beige Consulting, in 2022 the global diabetes drug market reached 347.057 billion yuan, while the size of China’s diabetes drug market has already reached 131.673 billion yuan, accounting for 38% – the highest in the world, almost three times that of the United States.
And the competition in China’s diabetes-related market is still in the stage of opening up new territory. According to the data of the “Status of Diabetes Care Standards in China: A Nationwide Cross-Sectional Study”, the comprehensive treatment standard rate of diabetes in China is only 4.4%, far below the 21% standard in the United States. With a huge base of 140 million patients, this means there is an increment of 23 million patients to be tapped, which is equivalent to nearly 70% of the total number of diabetes patients in the United States.

The US diabetes-related industry chain has been supported by a market of only tens of millions of patients. Then our blank market of tens of millions of people is more than enough to support the development and improvement of a new technology.
At the same time, due to the early cost issue, in the short term, the new technology will not affect the development of traditional insulin companies, avoiding large-scale homogeneous competition. Instead, some domestic consumers with relatively strong purchasing power and urgent health problems are willing to pay for it. Relevant medical institutions can fully satisfy this demand, gradually accumulate experience, and let the technology move from theoretical to standardized in practice, form scale, industrialize new research, develop a huge industrial chain, and then drive down prices to benefit the masses, becoming another choice for diabetes patients to solve their illness.
From this point of view, US sanctions not only cannot stop our progress, but are more like the late Qing dynasty’s policy of closing the country. In a few more years, when our technology is industrialized, who knows, the scene of “Dying to Survive” may be played out across the ocean. Let’s wait and see!