Recently, we published a blog that addressed the question of how many people with diabetes would a small-scale system could serve. Through our calculation, we estimated that a small-scale production system could serve an expected total of 13,000 people with diabetes; the estimates range from 4,000 to 45,000. In this post, we would like to evaluate the cost and feasibility of this solution.
The two main costs are upfront costs and recurring costs. The upfront price for new commercial equipment will be $73 per person with diabetes served; however, it can range from $7 to $20 if some equipment is second hand. If we project the use of open production hardware, this cost could come down to $4 per person. The upfront price only takes into account the equipment, not the cost of R&D provided by the Open Insulin Project to remain in the commons. The recurring cost will cover consumables, salaries, quality processes, packaging, and rent. The recurring cost will be around $7 per vial so ~$14 per month for a person with diabetes.
Still, looking at the cost of such a system using the excessively expensive proprietary hardware shows that even in the worst case, producing insulin in small scale, locally based groups is economical and can deliver prices to insulin users far below those charged to users under the current system, even after insurance.
Equipment – $73/person with diabetes served (~13,000)
The overall price of the equipment will be $949,500. If divided by the number served with small scale production, the cost per person with diabetes will be $73. The cost could be divided by three if second-hand equipment is used.
Open Insulin Project is also working on developing Open source hardware, cheap, reliable and easy to use, to lower the barrier of producing biomedicine. We expect the open-source equivalents we are working on to cost an order of magnitude less than their commercial counterparts. For example, a widely used proprietary PCR machine costs $7,200.00 new while the Open PCR costs $399. We expect similar reductions in cost when we move to open-source hardware for protein production and purification.
The small-scale production system will have six main components:
- Upstream (microorganism grow) – $540,000
- Downstream process (protein purification) – $210,000
- Quality control (excluding quality control on final product) $165,000
- Maintain a sterile environment – $12,000
- Storage (strain and final product) – $22,500
If a $1 per vial is added, a small scale production could in 13 months get the investment to start a new production in another location (40 months if new equipment is acquired). That means that the number of small scale production could double every year.
Salaries – $1/vial
A small scale production could run at 40% capacity with one worker; although, would l need at least 3 workers to run full capacity 24/7. If the packaging is also done on-site, it will require an additional half time worker. Depending on the structure, another worker may be needed for the administrative side of the production. The cost of labor will be less than $1 per vial.
* Open Insulin Project advocate for a living wage so we did our calculation with the worst-case scenario, a worker living in the San Francisco Bay Area with a salary of $70k/month.
Quality process- $2.7/vial
As an injectable medicine, insulin will require a strict quality process to determine the purity, stability, and efficiency of the molecule. This process can be done by a third party contractor. We are waiting for quotes from US manufacturing companies, but researchers in the Netherlands estimated it to be 356 Euro per 5g batch, translating to $2.7 per vial of Insulin.
Packaging – $1/vial
This step can be done by a third party contractor and should cost no more than $1 per vial. It can also be done on-site, but will require an additional half time worker as well as additional equipment.
Consumables – $1/vial
The two main consumables would be the cell culture media and the resin for the chromatography system. Both should some up to $0.7 per vial1. We decide to increase to $1 per vial to cover other consumables expenses (cones, membranes, gloves)
Rent – $1.3/vial
This variable is hard to predict as is related to the question where the insulin will be produced. If we look at renting a space with lab equipment, it could go around $10k/month. In this case, the cost per vial could go from $1.3 to $0.4.
We didn’t calculate a cost per year for equipment and just considered it as an upfront expense. For information, the average life expectancy for manufacturing of biopharmaceutical products is 15 years (1).
 Schellekens, Huub & Aldosari, Mohammed & Talsma, Herre & Mastrobattista, Enrico. (2017). Making individualized drugs a reality. Nature biotechnology. 35. 10.1038/nbt.3888.
Magistral drug preparation offers a model to circumvent many of the technological, regulatory and financial challenges that prevent the provision of the right drug at the right time to the right patient.
The publication is available on ResearchGate with a free account
 Gotham D, Barber MJ, Hill A. (2018). Production costs and potential prices for biosimilars of human insulin and insulin analogues. BMJ Global Health ;3:e000850.