Chelsea Arnold was getting into debt over tiny pieces of plastic: diabetic test strips. When Arnold was first diagnosed with diabetes she needed to test her blood sugar 10 times a day. She went to Wal-Mart and found that one box, which contained only a five-day supply of test strips, was $80. Arnold called her parents and told them she didn't know what to do. She didn't have the money.
Arnold then did what a lot of people do when they need help: She searched on Google. She typed in the words "cheap test strips," and Craigslist came up. She bought eight boxes for less than $100. At Wal-Mart, she would have paid $640. Arnold said, "it was like having a life sentence and then realizing that there's a cure."
With this Google search, Arnold stumbled into an underground economy for diabetic supplies. It's a market that offers a lower-cost option for test strips, though it is hard for customers to know where the boxes come from. Some boxes may be repackaged and unsafe to use, and some boxes are sold by diabetics who are desperate for cash. But many of them come from people who have health insurance and have accumulated extra test strips.
Trey falls into this category. (He asked us not to use his last name, because he fears retribution from his insurance company, even though he feels he hasn't broken any laws.) He moved from one type of blood sugar monitoring system to another type of monitoring system and ended up with 20 extra test strip boxes.
At that point, Trey began researching. He said, "Obviously No. 1: Is it legal to be able to sell test strips?" Trey realized that it is legal, with a caveat. "It's kind of a gray market as long as you don't get them from Medicare and Medicaid," he said. Trey then found a local buyer on Craigslist.
It starts to look a little seedy here. He put the 20 boxes in a brown paper lunch bag. "When I went to sell the test strips we met in a McDonald's parking lot," Trey said. "I came out with the bag full of test strips, and he had his wallet full of money and it was like we were doing a geriatric drug deal in the McDonald's parking lot to get rid of some test trips."
Trey made $300 off the geriatric drug deal. He jokingly calls the cash he made "blood money." He used his "blood money" to buy Christmas presents for his kids.
As far as we can tell, his test strips went on to the next stop: a gray market middleman, something like a wholesaler, someone like Christa Kral. Along with her cousin, Kral purchases diabetic test strips from people like Trey. Their website is called sellusdiabeticteststrips.com.
To advertise, Kral used to post fliers near the train station in her town. Now her ads are online. She thinks the company's unusual tagline has also brought in customers: "Two moms will buy your test strips."
Kral operates her business out of her dining room. She has a cardboard box with about 20 boxes of test strips inside. She might pay $50 a box. It depends on the brand, the condition of the box, and the expiration date for the test strips.
Then she sells them at a markup to the next part of this chain: retailers. Arnold, the woman who bought test strips off Craigslist because they were too expensive at Wal-Mart, is now a retailer. That time when she couldn't afford her test strips and keep her blood sugar in check — it scared her, and it made her decide to change her career path.
Arnold had been planning to go to medical school. But "that's what really made me think I shouldn't be a doctor and that I should go and help people try to afford the test strips," she said.
Arnold started a website, glucomart.com. It's a place where people can buy affordable test strips. She turned her garage into a kind of pharmacy. Her floor is epoxied, and she has pharmacy shelves.
Arnold realizes that if manufacturers or insurance companies lowered the price of test strips, she could be put out of business. She's actually OK with that, because, she said, "the business exists to help people afford the test strips they need."
Arnold would be happy to go back to her original plan and trade in her pharmacy shelves for a doctor's coat.