Diabetics sell insulin and test strips on black market for extra cash

E-Bay & Craigslist often don't catch illegal sales

TAMPA, Fla. - Diabetes is at epidemic levels in Florida.

In this year’s annual report, the Florida Diabetes Advisory Council estimated that nearly 2.4 million Floridians have the disease and more than 5.8 million have pre-diabetes.

And the cost is huge, an estimated $24.3 billion a year is spent on direct medical expenses and indirect costs, which add up to about $1,200 a year for every man woman and child in the state.

We're paying the cost through higher insurance rates and higher taxes to support programs like Medicare and Medicaid.

But some are cashing in, profiting on the black market for diabetic supplies.

While others who sell their medicine and test supplies risk getting sicker.

In recent months, the I-Team found dozens of people posting ads on sites like Facebook and Craigslist from people offering to sell their insulin, which is illegal.

One man we contacted showed up with his wife and kids to show us what he had to offer.

He had multiple insulin pens he said he purchased before his doctor switched his prescription to an insulin pump.

When we told him we were doing an investigation into the diabetic supply black market, he agreed to an interview, if we didn’t identify him.

“My kids have to eat,” he said, acknowledging that insulin is “very expensive”.

“People don't have the money either to get it. People don't have insurance,” he said.

The pens he was selling for $30 each have a retail price of close to $100 each.  

He said he sold the pens to help other diabetics out, noting “You can die if you don’t have it.”  

We contacted another woman who advertised insulin on Craigslist.

She showed up with two unpackaged pens she said her son got from Medicaid.

She said she knows selling insulin is illegal, but said her family needed the money.

We found other people offering to sell insulin on Craigslist in Orlando, Miami and Jacksonville in Florida, as well as in other major U.S. cities like New York, Los Angeles and Washington, D.C.  

University of South Florida Healthcare Vice President Dr. Jay Wolfson says the diabetic black market is growing fast.

“We don't know if they've been contaminated. And we don't know what happens when people don't use what they're given and place their health at risk,” Wolfson said.

He said when people fail to manage diabetes by testing and taking prescribed insulin, they put their own health and risk and can end up in the hospital.

Road signs around Tampa offer sellers cash for test strips.

Online videos show how to get rich buying and selling.

“You're gonna have to put a Craigslist ad out or you're gonna have to put an ad in the newspaper,” said a woman in an online testimonial posted on YouTube.

She admits in the video that many people who sell testing supplies are nurses who have easy access to patients’ diabetic strips.

Websites offering to buy strips show they pay about 20 cents on the dollar for the product.

“It works because you have enough vulnerable people, low income people, people who are willing to take the risk that they might get a little sick,” said Wolfson.

Testing supplies are then resold on Amazon and E-Bay for up to three times that price, but still at cheaper than at retail pharmacies.

We bought test strips for less than $20 from a Polk County E-Bay re-seller who had recorded 7,800 transactions

While it's against the law to sell prescription drugs online, you can legally sell diabetic testing supplies, unless the come from a free government health program like Medicare, Medicaid or the VA.

A recent inspector general report says Medicare spends more than a billion dollars a year on test strips.

The report describes that diabetic test strip program as vulnerable to "fraud, waste and abuse."

“My income was not supporting a house, a life and the strips,” said Haitham Khalil of Wesley Chapel, who is a diabetic.

He said he often bought test strips from Medicaid recipients who advertised them on Facebook.

He eventually started his own online company, www.Pharmaonlinestore.com, representing a small Tennessee-based diabetic testing supply brand.

His strips sell for 14 cents each, unlike major brands, which retail for up to $2 each.

When asked how much he thinks it costs to make those strips, Khalil said “two to three pennies.”

“In other countries, the government can force product pricing. We don't do that here, and it affects access,” said Wolfson.

“We're up to 50 orders a day,” Khalil said.

His sales are doubling every month, and he's happy to help other diabetics.

“It's got to be managed. And without being tested, you're not gonna know,” said Khalil.

The man who attacked us in the parking lot gave his insulin away to an uninsured friend.

“I cannot imagine people who don't have a way to get it,” he said.

Medicaid now pays for his medicine, but he says the high costs of diabetes already ruined his life.

“Especially because I have family and kids,” he said.

We reached out to both Craigslist and Facebook concerning people illegally selling insulin on their sites.

Craigslist did not respond.

Facebook issued the following response:

"The sale of insulin is against our Commerce Policies, which explicitly prohibit the sale of “illegal, prescription or recreational drugs”: https://www.facebook.com/policies/commerce[facebook.com]
We work to prevent items that violate our policies or local laws from appearing on Marketplace, but there are instances of prohibited goods or services that we don’t catch. As soon as we discover an item that doesn't belong on Marketplace, we will remove it and evaluate if any additional action is necessary.
We have built capabilities for people to report any items that they feel don't belong in Marketplace. When an item is reported, Facebook quickly reviews and takes the appropriate action.
We use automation to help us identify items that may violate our policies, but given Facebook’s scale we rely in large part on our community to report violations."

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If you have a story you’d like the I-Team to investigate, contact us at adam@abcactionnews.com.

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