[bransonf]

This is great, but (obviously) not purely benevolent.

A vial of analog insulin costs something like $6-7 to produce, probably less at Walmart scale. The distribution costs probably make the net cost somewhere still in the $7-10 range.

That’s a $60-65 or ~90% margin per Vial.

5-10 million or so insulin users in the US, let’s assume Walmart captures 3 million, at 3 vials per month.

$180 * 12 * 3mil ~~ 6.5 Billion.

Current market cap 400B

Lots of assumptions, but Walmart may have just added 2% of market cap per annum by insulin sales?

[PragmaticPulp]

Of course it's not purely benevolent. Walmart is a business and this is a business move.

> A vial of analog insulin costs something like $6-7 to produce, probably less at Walmart scale. The distribution costs probably make the net cost somewhere still in the $7-10 range.

Don't forget the R&D costs of getting a generic drug approved and setting up the manufacturing. It may cost <$10 to produce at scale, but getting there isn't free.

Hopefully Walmart's pricing trends downward toward the $25/vial price of regular insulin.

Actually, I hope this move spurs more chain pharmacies to start developing their own analogs, furthering competition in the space. Race to the bottom would be great.

[brayhite]

Curious how often the “race to the bottom” versus the “planned price floor” applies to healthcare.

Sure, OTC stuff may differ given the different markets, but I’m highly skeptical of this spurring any sort of race to the bottom that doesn’t also come with large asterisks around quality, qualification to purchase, etc.

[gruez]

>A vial of analog insulin costs something like $6-7 to produce, probably less at Walmart scale

Where are you getting the $6-7 figure from? Artisan insulin makers? Feels like every insulin maker out there operates at walmart's scale, if not bigger. If that's where we're getting the $6-7 figure from, then it's not reasonable to expect it to drop any further.

[bransonf]

https://gh.bmj.com/content/3/5/e000850

$5.32-8.87 cost of production depending on the insulin analog.

As noted above, I did not account for R&D and manufacturing capacity.

Regardless, I tried to estimate conservatively at a $12-13 per vial overall cost. My napkin math is certainly wrong.

The point is that Walmart still stands to generate a multi-billion dollar per year profit on the sale of this insulin. (Unless my market capture estimate is wrong by an order of 6+, which it could be)

To be clear, I’m not opposed (in fact grateful) that Walmart is competing in the insulin market. However, I still find it unfortunate that we in the United States pay more for Insulin than any other country in the world, even with this competition.

[deregulateMed]

I trust Walmart as a customer significantly more than the healthcare cartels.

Benevolent? It's not exactly hard to be more benevolent than the medical establishment.