Diabetes Test Strip Resale: A Million-Dollar Grey Market

I was doing some reading on the internet and came accross this article on "Test Strips Resale"

It was written up today @ http://kuow.org/program.php?id=25844 Thought it was an interesting article and thought to share...

Diabetes care is a billion–dollar industry. And one of the biggest money–makers is a glucose monitoring strip, a chemically treated one–time–use piece of plastic.

Patients place a small sample of blood on the test strip then insert it into a meter. The reading gives people with diabetes critical information about their blood sugar.

An investigation by KUOW's Patricia Murphy found that this little plastic strip is also at the center of a grey market worth millions.


This story begins in a 7–11 parking lot in North Seattle with a sign posted on the side of the soda machine. It's printed with four simple words and a phone number: I Buy Test Strips.

For those in the know, that is people with diabetes, it's an invitation to connect with a guy like John Bourdeau. He'll pay as much as $20 a box for unused, unexpired, glucose monitoring strips.

The strips normally retail for as much as $125 per box. Many diabetics can't afford them.

Bourdeau: "We're an intermediary. We put people who have test strips who don't know how to dispose of them with people who have a need for them. So it allows them to test their blood."

Bourdeau sells the strips to an online wholesaler in North Carolina for about $40 per box. The wholesaler then sells each box online for around $80.

There are a lot of John Bourdeau's supplying a lot of wholesalers. What they're doing is legal, but just barely. And the market is fueled by poverty, crime and opportunity.

Commercials: "Ibuydiabeticteststrips.com! I pay cash for your unwanted, unexpired and sealed diabetic test strip boxes."

"Test strip rescues quick cash calculator. Using the quick cash calculator, we'll help you calculate how much money you can receive when you package and ship your surplus supplies to our warehouse."

"Would you like to make some money selling your unused diabetes test strips? Here at CGS, LLC, we make it easy for you to sell your extra, unexpired sealed boxes of diabetes test strips for cash."

Bourdeau says his 90 or so clients depend on him. They sell their strips for food and to keep the lights on. In the end, he says, everybody gets a little bit of what they need.

Bourdeau: "These people need this money. They're often unemployed. As we know that the cost of living these days is astronomical, so the $40 that we buy the test strips for really helps them out."

The FDA says it's legal to buy and sell test strips because you don't need a prescription to get them. But if a doctor writes you one, it's usually covered by insurance or Medicare.

Bourdeau: "Unfortunately, some people will request them just to sell. I might as well get that out in the open. They call their doctor and say, I need some more in order to get money to buy food and whatever."

And that's where, legally speaking, things get a bit murkier. It's not clear just how these kinds of transactions affect insurance premiums. And the private insurers we contacted weren't interested in speculating.

One entity that has been paying attention to the potential for dodgy test strip claims is the US Government. Medicare paid out more than $1 billion in claims for test strips in 2009. More than half of that money went to mail–order companies like this one:

Commercial: "At CCS Medical we can send all of your diabetes supplies to your home so you won't need to go to the pharmacy. And we'll deal with Medicare or your insurance to handle the paperwork."

Mail–order pharmacies specifically target senior citizens on Medicare. But these companies, advertised as convenient service for diabetics, are often the subject of complaints. One of the most frequent from customers is that they send way too many test strip refills. The result is a steady product stream for people like John Bourdeau.

Bourdeau: "Most of these people are on a set program with their insurance companies to receive a set amount of boxes every month whether they use them or not."

Mail–order boxes being sold online are easy to spot since they're specially labeled.

Stone: "It's pure theft. That raises some concerns about patient care and safety."

Jean Stone is an integrity officer with the Centers for Medicare and Medicaid services (CMS).

Stone says beneficiaries need to report shipping problems.

Stone: "If they are over shipping, they are supposed to respond to that so when we receive those types of complaints, they are investigated and suppliers can lose their billing privileges."

Problems with mail–order suppliers have been on the US Inspector General's radar for some time. In a series of reports last year the office documented $208 million in what it called inappropriate payments.

Auditors sampling 400 test–strip claims, a small fraction of those filed, found documentation problems with 75 percent of them.

Cases have been prosecuted, but the Medicare system is a vast landscape of paperwork and contractors, which makes it extremely challenging and expensive to police.

Stone says resources and money are always an issue.

Stone: "The more claims that we could examine and review before we pay them, the fewer improper payments we would make. Oxygen supplies, glucose monitoring supplies and power wheelchairs have the highest improper payment rates."

Stone adds that CMS is trying to narrow the field by vetting suppliers more carefully.

The online market for test strips is also fed by more overt theft. In 2007, auditors at Providence Medical Center in Everett were surprised to discover that a large number of diabetic test strips were missing.

Turns out, for years a pharmacy tech named Michael Worley had been shipping stolen insulin and test strips to a man in Jupiter, Florida.

Court documents say over five years, Worley's contact recruited more than 50 suppliers and paid out nearly $10 million. Many of those test strips probably ended up online.

Online ad: "Cheap strips from diabetictestsforless.com. You shouldn't have to pay a fortune for test strips."

Unmanaged diabetes can ravage the cardiovascular system, cause blindness and reduce circulation, which can result in infections, ulcers or gangrene. Most physicians recommend that patients check their blood at least once or twice a day. A lot of the people who sell their strips to Bourdeau aren't doing that. And he can see the affect on their health.

Bourdeau: "One of my clients, I visit him about three weeks ago, and he goes, You'll have to knock and open the door, and I said why. He says, Well, I lost my leg. He's a nice gentleman that I buy from in Seattle and I felt really bad 'cause here he was with his stump."

All of these sources provide a gateway for the online market that many diabetics rely on for discounted supplies, whether it's eBay, Amazon or a large wholesaler.

Most diabetics spend an average of $6,000 per year treating their disease, so it's not hard to understand the reality behind the thriving, quasi–legal test strip resale market. But ultimately even if, like Bourdeau says, everyone gets a little bit of what they need, everyone, including taxpayers, rate payers and patients, are paying the price.

I'm Patricia Murphy, KUOW News.

I think this is the reason insurance companies are always so interested in cutting the number of strips they will pay for. More strips available means a bigger black market selling to the uninsured.

This is dispiriting news. I use all my test strips to help me manage my blood glucose and insulin injections -- I've never even considered selling them. I wonder if the gentleman in the story would rather have the cash or his leg back?

Very sad.

You gotta love America (in the manifest destiny sense) for its free enterprise spirit.

I just hate it that people have to be so desperate. We have the resources in this world, they're just gummed up.

My pharmacist must have read this story! I have an Rx for 3 months of strips testing 10 times a day or 900 strips. The last time I filled it the pharmacist gave me "the look" which said everything he was thinking. He was thinking that my 900 test strip Rx was "unreasonable" and I was doing something "shady". I almost complained to a manager, but figured since he didn't say anything I would not have a leg to stand on.

The whole test strip situation just makes me sad and is a clear picture of what's wrong with medical care in this country. When people who need the strips cannot afford them or are limited as to how many the insurance will pay for, something needs to change. When we spend billions of dollars outside our own country helping others before we help our own with basics like food, medicine, and medical care....pet peeve.

Not long ago, I had my endo re-write my prescription for 10-12X per day to get additional strips covered by insurance. Even with the additional strips, I am still buying 1 or 2 boxes per month online out of pocket.

I've posted links to these before.....



I say screw those blood sucking dirt-bags. At least if we don't see a cure like treatment the testing industry will likely change and for the better.

My insurance company doesn't cover the cost of any of my strips so I am forced to go online and buy them. I can't afford the $120 a box my pharmacy charges. I've never had problems with the ones I get on Amazon. Wouldn't it be nice if the government gave us free strips like they want to do with Birth Control. Then there wouldn't be a Gray Market.

Gary, thanks for the links. Something for us to look forward to huh?

Hey Gary, I just signed up for their clinical trials. Thanks!