Glucose test strips $$$

[2_More_Bits]

What does it cost to manufacture a glucose test strip? (My uninformed guess is 4¢)

Insurance aside, they retail for about 75¢ apiece.

[Thudlow_Boink]

It sounds like you’re asking about the marginal cost per strip—basically, how much it costs to make one more, once they’re already set up to make them. But it’s important to remember that that’s not the only cost that the manufacturer has to cover in order to break even, let alone make a profit. There are also costs involved in research and development, equipment and facilities, employee salaries and benefits, etc. that have to be covered somehow.

That said, I don’t know the answer to your question, but I did some googling. Here, for what it’s worth, are some of the things I found.

I contacted some of the leading players in the diabetes management field, and not one would discuss the precise costs involved to make test strips.

“That’s proprietary,” a spokeswoman for Bayer HealthCare said.

Dave Detmers, a spokesman for Johnson & Johnson’s LifeScan subsidiary, said the cost of test strips reflects not just research and development but also the practice of frequently giving away blood-glucose meters. “Right or wrong, that’s how it’s done,” he said.

The business model is pretty clear: Companies swallow the under-$100 cost of supplying a typical meter to diabetics because test strips can run hundreds of dollars monthly – for the rest of a diabetic’s life.

That’s basically the same as shaving-cream companies giving away razors so they can get you on replacement blades. Except that people don’t die if they stop shaving.

From this 2007 LA Times article. (Looks like that’s one for the “How many products use the “razor blade” business model?” thread.)

Although modern technology might seem incredible at times, these strips require only about $0.15 to be manufactured, at most. As a result, it is estimated that manufacturers of test strips have a profit margin of over 70% – 80% on these strips.

However, other people who are aware of the industry’s processes state that the manufacturing costs don’t necessarily reveal the whole picture. When people also factor in additional research expenses and costs of machinery, etc., the prices are quite rational, say many industry experts.

From here (January 2020)

The marginal manufacturing cost per strip is pennies, it’s the cost of the factory and distribution that increases the price.

Claims that they cost over a dollar each to buy must be USA based, as I buy them from my local pharmacy in the UK at a retail price of about £18.00 for 50. The NHS pay about £10.00 for the same pack. Just as well, really, as my job can require me to test five or six times per day.

As a aside, I have heard of American citizens buying test strips online for a fraction of the USA price.

From someone’s response on Quora

[Schnitte]

@Thudlow_Boink

It sounds like you’re asking about the marginal cost per strip—basically, how much it costs to make one more, once they’re already set up to make them. But it’s important to remember that that’s not the only cost that the manufacturer has to cover in order to break even, let alone make a profit. There are also costs involved in research and development, equipment and facilities, employee salaries and benefits, etc. that have to be covered somehow.

Your distinction between marginal cost and average cost is valid, of course, but it goes to confirm that the US market for pharmaceuticals is fundamentally broken. Basic economic theory predicts that in a perfect market with no entry barriers, the market price will tend towards marginal cost. Sure, no market is truly perfect, but the one for pharmaceuticals is particularly imperfect.

[2_More_Bits]

Thank you, T.B. It’s probably unanswerable. That being said, I don’t think there have been any improvements in test strip technology for a couple decades so research and development can’t be much of a factor.

[PastTense]

I think Walmart has its own generic brand they sell fairly cheaply.

[Seanette]

They do. I bought 100 for $18 not long ago.

[2_More_Bits]

Based on this and the fact that they all do the same thing and are pretty much equally accurate I amend my guesstimate as to the per strip cost. I say less than a penny.

[bob_2]

@Thudlow_Boink

Claims that they cost over a dollar each to buy must be USA based, as I buy them from my local pharmacy in the UK at a retail price of about £18.00 for 50. The NHS pay about £10.00 for the same pack.

My wife buys them from Amazon. £12.29 for 50 - less than 25p each. Cheaper if you buy 100 and free delivery on Prime.

[Dewey_Finn]

@2_More_Bits

Thank you, T.B. It’s probably unanswerable. That being said, I don’t think there have been any improvements in test strip technology for a couple decades so research and development can’t be much of a factor.

Well, there is new technology. Like continuous glucose monitors, which I don’t think use test strips.

[2_More_Bits]

CGMs don’t use test strips but utilize a “sensor” that needs to be replaced every 7 to 14 days.

[Mean_Mr.Mustard]

Glucose meters are the printer, test strips are the ink.

mmm