Pharmaceutical companies are alarmed that shadowy companies are buying and selling diabetic testing supplies, largely online, at cut-rate prices.

And well they should be.

Resold strips used to test for diabetes, once taken out of an accredited pharmacy’s supply chain, have a greater risk of being defective. They may have been stored at improper temperatures, tampered with or replaced with counterfeits.


The danger of that, of course — as one expert told Sun-Times reporter Stephanie Zimmermann in a story this week — is that a person with diabetes who uses these defective test strips might greatly overuse or underuse insulin — a “really critical health issue.”

Clearly, this is another new industry in the booming sharing and resale economy, made possible by the rise of the internet, that begs for tighter federal controls. And that should include stricter oversight of Medicare claims for diabetic test strips. A 2011 federal inspector general’s report, according to Zimmermann, found that Medicare had “inappropriately allowed” $6 million in claims for the test strips, sometimes to people who didn’t have a proper diagnosis.

But let’s also understand why this grey market — in which at least one company, Surplus Diabetic Supplies of Chicago, has been slow to pay people for their unused test strips — even exists.

Diabetes test strips, like many pharmaceutical supplies and drugs, are expensive. The strips can cost an average of $2 apiece at a licensed pharmacy, and some diabetics use up to 12 strips a day to monitor their blood sugar levels. That works out to $24 a day, or $168 a week, or $8,736 a year. Private insurance and Medicare pay for the strips, but not necessarily all the strips, and not necessarily the entire cost.

A reseller of test strips on the grey market, which by and large is legal, might sell the strips for about 70 cents apiece, a fraction of what the pharmacy charges.

Government can and should better regulate the sale of unused diabetes test strips, but grey markets such as this will continue to exist, and even thrive, as long as the cost of drugs and pharmaceutical supplies remain prohibitively high for millions of Americans. And as long as insurance coverage remains inadequate.

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