98-592 STM
Updated July 15, 1998
CRS Report for Congress
Received through the CRS Web
Diabetes: Basic Information and Federal Funding
Donna U. Vogt
Analyst in Social Sciences
Science, Technology, and Medicine Division
Summary
An estimated 8 to 10 million Americans know they have diabetes mellitus, a
metabolic disorder in which the body either fails to produce, or fails to properly use, the
hormone insulin. It is the seventh leading cause of death in the United States,1 the
leading cause of adult-onset blindness, and a significant contributor to several
debilitating health complications, including heart disease, stroke, kidney disease
(nephropathy), nerve disease (neuropathy), and amputations. The American Diabetes
Association estimates that direct and indirect costs of diabetes mellitus in the United
States exceed $98.2 billion each year.2 This report describes diabetes, current treatment
and management, public health impact and cost, innovations in treatment, and federal
spending on treatment and research. This report will be updated periodically.3
Background
Diabetes mellitus, or simply diabetes, is a disease that affects the way the human
body uses food as fuel. This fuel, glucose, is a sugar which comes from other sugars and
starches; human body cells convert glucose into energy to live and grow. Some cells can
absorb glucose only in the presence of insulin. Insulin, a hormone made by the pancreas,
is carried by blood to body cells. Insulin is produced by beta cells which are present in
cell clusters called islets of Langerhans scattered throughout the pancreas. When
someone is diabetic, either the body does not produce insulin or the body does not
respond normally to insulin. When glucose cannot enter the cells, it builds up in the
bloodstream, and causes a condition called high blood sugar, or hyperglycemia. When
1 National Center for Health Statistics, Advance Report of Final Mortality Statistics, 1995,
Monthly Vital Statistics Report, supplement 2, v. 45, no.11, 12 June 1998. Diabetes causes 2.6%
of total deaths in the United States.
2 Department of Health and Human Services Budget Office, HHS and National Cost for
Thirteen Diseases and Conditions, 20 February 1998.
3 This report replaces CRS Report 97-13 SPR, Diabetes: An Overview, by Christine Miller,
18 December 1996.
Congressional Research Service ˜ The Library of Congress

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levels remain high (fasting plasma glucose of $126 mg/dl), a person is considered to have
diabetes. Symptoms of diabetes include frequent urination, thirst, weight loss, and blurred
vision. Untreated chronic hyperglycemia is gradually fatal.4 Even when treated, it may
result in diabetic complications, such as damage to the kidneys, eyes, nerves, or blood
vessels. Diabetics are 2 to 6 times more likely to get heart disease than non-diabetics.
There are two types of diabetes. Type 1, or insulin-dependent diabetes mellitus
(IDDM), develops when beta cells die off, and the pancreas does not produce insulin to
control blood glucose concentrations. Type 1 diabetes, sometimes called juvenile
diabetes, usually strikes children or young adults, and accounts for 7% to 10% of all
diabetic cases.5 Type 2, or non-insulin-dependent diabetes mellitus (NIDDM), develops
when the body’s cells resist insulin made by the pancreas and glucose remains in the
blood stream. Type 2 diabetes usually develops later in life, and accounts for over 90%
of all diabetes cases. Millions of people are unaware they have Type 2 diabetes.
Current Treatment and Management
Diabetes is incurable; a diabetics’s goal is to keep blood sugar levels near normal,
to avoid life-threatening high or low blood sugar incidents, and to stave off diabetic
complications. Optimally, a diabetes management plan is developed by patient and
doctor. The plan is periodically evaluated and altered as needed. Treating diabetes
requires a life-long commitment by the patient to regular medical care.
Some diabetics can manage their condition by monitoring their blood glucose levels
and balancing food intake against insulin and activity. Food raises blood sugar levels;
insulin and exercise help lower them. Very low blood sugar, called “hypoglycemia,” robs
the brain of fuel, and can cause confusion, coma, and death if not detected and treated.
Keeping blood glucose levels in a “normal” range can help diabetics avoid complications.
Most patients are treated with insulin or with oral “hypoglycemic” agents.
Type 1 diabetes is treated with two or more daily insulin injections, exercise, and
strictly regulated diet. Patients may use disposable plastic syringes or pre-filled injection
pens to inject insulin into the body. Some utilize insulin pumps, mechanical devices
attached to or inserted into the body to deliver insulin more continuously. Type 2 diabetes
is treated with exercise, diet, blood sugar monitoring, and oral medication or injected
insulin. Over half of Type 2 diabetics do not require injected insulin. The likelihood that
a Type 2 diabetic will need injected insulin increases with the duration of the disease.6
Patients with diabetes are at risk for diabetic complications. A major clinical trial,
the Diabetes Control and Complications Trial (DCCT) supported by the National
Institutes of Health’s (NIH), National Institute of Diabetes and Digestive and Kidney
4 National Institute of Diabetes and Digestive and Kidney Diseases, Diabetes Overview,
NIH Publication No. 94-3235, 1994.
5 IDDM is the most common chronic disease in U.S. children affecting about one in every
400-500 children.
6 National Diabetes Data Group, Diabetes in America, NIH Publication No. 95-1468, 1995,
2d ed., 528.

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Diseases (NIDDK), tested 1,441 Type 1 patients to determine if strictly controlled blood
glucose levels over several years could delay the onset of complications. In the DCCT,
diabetics who maintained near normal blood sugar levels could dramatically reduce onset
and progression of long-term diabetes complications. For example, there were 40% to
70% reductions in the incidences of kidney, eye, and nerve diseases. The cost for this
close glucose-monitoring approach was double the cost of other treatments, however. The
test group also experienced more hypoglycemia, and showed modest weight gain, so this
strict protocol might not be suitable for patients under 13, the elderly, or overweight
diabetics.7 Any sustained normalization of blood sugar helps slow the progression toward
diabetic complications, and possible side effects must be balanced against the great
benefit in delaying such complications.
Public Health Impact and Cost
Diabetes is the seventh leading cause of death in the United States, the leading cause
of adult-onset blindness, and a significant contributor to debilitating health complications,
including heart disease, stroke, kidney disease (nephropathy), nerve disease (neuropathy),
and amputations. Half of the lower limb amputations in the United States are among
diabetics; diabetes also predisposes people to periodontal (gum) disease, tooth loss, and
skin infections. About a third of diabetics remain undiagnosed, and therefore are not
receiving treatment for their condition, putting them at risk for long term adverse health
effects.
Estimates of economic costs of diabetes vary considerably, and its contribution to
other diseases makes cost estimating difficult. The American Diabetes Association
estimated for 1997 that the direct and indirect cost of diabetes mellitus in the United
States exceeded $98.2 billion annually. This total contains estimates of $44.1 billion in
direct medical costs, for treatment and monitoring, and $54.1 billion in lost productivity
due to illness and premature death.8
In the United States, African-Americans, Hispanics, Native Americans, Asian
Americans and Pacific Islanders, have a greater likelihood of developing Type 2 diabetes.
White Americans are more likely to get Type 1 diabetes than are non-whites. In 1997, the
total prevalence of known, diagnosed cases of diabetes was estimated to be between 8-10
million. At the same time, undiagnosed cases are estimated to be between 4-5 million.
An additional 13 million people are estimated to have impaired fasting glucose (glucose
of between$110 and 126 mg/dl) and 21 million to have impaired glucose tolerance (a
precursor to Type 2 diabetes.)
Risk factors for diabetes include a varied ethnic and racial background, being
overweight, having a family member with diabetes, physical inactivity, and increasing
age. In the United States, increasing numbers of people are overweight, and elderly and
7 The Diabetes Control and Complications Trial Research Group, “The Effect of Intensive
Treatment of Diabetes on the Development and Progression of Long-Term Complications,” New
England Journal of Medicine, v. 329, 30 September 1993, 977-86.
8 American Diabetes Association, “Economic Consequences of Diabetes Mellitus in the
U.S. in 1997,” Diabetes Care 21(1998):296-309.

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minority populations are growing as a percentage of the overall population, so for
Americans as a whole, the number of people with diabetes is likely to increase.
Innovations in Treatment and Management
The underlying causes of diabetes are unknown, although genetic predisposition,
behavior, and environmental factors are believed to play roles. Diabetes may be caused
by various genes, all resulting in high blood sugar. Several chromosomes have been
identified as possible sites for genes which predict or even cause diabetes, but no specific
genes have been determined to be causal. Research continues to try to clarify the
underlying genetic, molecular or cellular causes of diabetes. Also there is ongoing
research on the prevention of the disease. NIH’s Diabetes Prevention Program is testing
whether life style and drug interventions can prevent or delay the onset of Type 2 diabetes
in at-risk individuals including minority populations.

Type 2 diabetes is often treated with oral medications. Four classes of oral drugs are
now available. The oldest, called “sulfonylureas,” work by stimulating the pancreas to
produce more insulin. Maintaining a normal weight, which helps control NIDDM,
becomes more difficult when taking sulfonylureas. A newer class of oral medication for
Type 2 patients, biguanides, includes metformin, which lowers cells’ resistance to insulin
produced by the liver. Glucosidase inhibitors, which include acarbose and miglitol, slow
the digestion of carbohydrates and delay the absorption of glucose from the intestine. The
fourth class, as represented by troglitazone, allows diabetics to make better use of their
own insulin by resensitizing body tissues to the insulin. In March 1998, researchers found
that metformin and troglitazone work even better in combination than they do alone for
hard-to-treat cases of diabetes.9
Currently being tested in clinical trials is a finely powdered insulin which, when
inhaled into the lungs, goes directly into the blood stream. Although it may be two years
before it can be marketed, patients in the trials appear to prefer this new application over
injections. So far there have been no detectable negative side effects reported.10
Type 1 diabetes is an autoimmune disease, in which the body misidentifies its own
beta cells as foreign, and destroys them. This autoimmune response may stem from a
viral infection to which the body over-responds, or from some other cause.11 Prevention
in susceptible individuals is being researched, as well as replacement of damaged beta
cells by transplantation of new pancreatic tissue. The main impediment to transplantation
is the body’s immune system. Once it detects the transplanted cells, it attacks and kills
them, a process called “rejection.” Diabetics who develop kidney failure may be
9 S.E. Inzucchi et al., “Efficacy and Metabolic Effects of Metformin and Troglitazone in
Type II Diabetes Mellitus,” The New England Journal of Medicine, v. 338, 26 March 1998, 867.
10 Thomas H. Maugh II, “Inhaled Form of Insulin Seen as a Breakthrough,” Los Angeles
Times, Wednesday, 17 June 1998, A1,A7.
11 M. Trucco, and R. LaPorte, “Exposure to Superantigens as an Immunogenic Explanation
of Type 1 Diabetes Mini-epidemics,” Journal of Pediatric Endocrinology and Metabolism, 8(1),
January-March 1995, 3-10.

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candidates for kidney transplantation, and some may receive a new pancreas at the same
time. They receive immunosuppressant medication to prevent rejection of both organs.12
An entire transplanted human pancreas is not necessary for insulin production.
Technologies are being developed to introduce clusters of beta cells into areas of the body
without triggering an immune response. Transplant ideas being researched include: (a)
implanting small perforated plastic containers of beta cells, which render the cells
invisible to the immune system, (b) introducing beta cells into the eyes or testes, where
immunoresponse is less, (c) implanting human fetal beta cells, which produce lower
immunoresponse, and (d) simultaneous implants, in which beta cells are transplanted
along with protective tissue which destroys particular immune cells.13
NIH is currently conducting the Diabetes Prevention Trial (DPT-1) to test whether
lifestyle changes and prophylactic administration of insulin can prevent or delay the onset
of Type 1 diabetes in at risk individuals, particularly children. Participants are being
treated with daily oral medications or with exercise and diet modification.
Diabetes-Related Funding
Federal funding for diabetes treatment, prevention education and research will total
about $16.8 billion in FY1999, and is spread throughout the federal government. (See
Table 1.) The Health Care Financing Administration (HCFA) of the Department of Health
and Human Services (DHHS) spends the largest share in the Medicare and Medicaid
programs to help pay medical expenses for eligible diabetics. The Balanced Budget Act
of 1997 extended to those Medicare beneficiaries coverage of outpatient self-management
training services so they could learn how to better control their condition. The Act’s
purpose was to increase Medicare savings over time by reducing hospitalizations and
complications arising from diabetes. The Department of Veterans’ Affairs (VA) also
provides health care benefits to diabetics. Treatments for VA patients accounted for 12%
of the 1994 VA’s medical care budget, and at least 24% of all VA pharmacy outpatient
costs were diabetes related.14 In 1996, the VA served 375,000 diabetic veterans through
its health care system. A total of $2 billion was spent in 1996 for their medical care.
Public Health Service (PHS) programs for diabetes education and prevention are
supported by the Centers for Disease Control and Prevention (CDC) and the Indian Health
Service (IHS).

12 J. D. Pirsch, et al., “Pancreas Transplantation for Diabetes Mellitus,” American Journal
of Kidney Disease, 27 (3), March 1996, 444-450.
13 National Institute of Diabetes and Digestive and Kidney Diseases, Diabetes Overview,
NIH Publication No. 94-3235, 1994.
14 This figure includes all VA medical care for the diabetic veteran, even care not directly
diabetes-related. It does not include $7.946 million spent on research in 1996. Other federal
entities, such as the Federal Employee Health Benefits (FEHB) program, fund diabetes health
care benefits. Information on total FEHB diabetes care funding levels is not available.
TRICARE, the Department of Defense health care organization, also provides a small amount
of funding for diabetes care.

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The majority of federal diabetes research funding is administered through NIH and
agencies within PHS. Research funding has increased substantially since FY1997
because, in the Balanced Budget Act of 1997, Congress committed $150 million, ($30
million each year over 5 years FY1998 through FY2002), for medical research focusing
on Type 1 diabetes. This commitment is in addition to the annual appropriations for NIH.
The Act also included $150 million for diabetes prevention and treatment for Native
Americans. The Act specified that the Secretary of DHHS must evaluate these two
diabetes grant programs and report to Congress with an interim report on or before
January 1, 2000, and with a final report on or before January 1, 2002.

Table 1. Department of Health and Human Services (HHS) Funding of
Diabetes Treatment and Related Research,
FY1994 - FY1998, With an Estimate for FY1999.
($ in Thousands)
Agency
FY1994
FY1995
FY1996
FY1997
FY1998
FY1999d
NIH
293,615
295,142
298,920
319,539
373,215a
414,856a
NIDDK
191,409
193,597
197,542
211,626
229,000
256,641
NEI
22,605
22,001
21,509
21,604
23,172
25,844
NHLBI
19,779
20,393
21,010
21,270
22,744
28,504
NCRR
18,577
19,501
17,952
19,461
20,784
21,387
NICHD
12,329
12,631
13,373
16,042
17,100
17,596
Other NIH
28,896
27,019
27,534
29,536
60,415
64,884
CDC
17,910
19,770
22,991
26,277
48,977a
53,788a
IHSb
6,722
7,701
7,701
7,701
41,001
41,001
AHCPR
1,210
2,733
2,382
2,135
2,000
2,100
TOTAL
312,735
317,645
324,293
355,652
465,193
511,745
PHS
HCFAc
8,713,000
10,303,000
11,951,000
13,269,000
14,611,000
16,278,000
TOTAL HHS
9,025,735
10,620,645
12,275,293
13,624,652
15,076,193
16,789,745
Sources: HHS Budget Office, “HHS and National Cost for Thirteen Diseases and Conditions,” Feb. 20, 1998; HHS
Budget Office, FY1999 Moyer Cross-Cutting Material, Feb. 1998. Budget Office, National Institute of Diabetes, and
Digestive, and Kidney Disease, National Institutes of Health, Jan. 6, 1998.
a Includes transfer of $27 million to NIH and $3 million to CDC for Type 1 diabetes research in accordance with the
Balanced Budget Act of 1997. bIncludes a grant of $30 million each year for FY1998 through FY2002 in accordance
with the Balanced Budget Act of 1997. cThese totals include the total Medicare reimbursement for a diabetic
beneficiary as well as the calculated direct and indirect costs for diabetes. d = Estimate.
Acronyms mean the following: NIH = National Institutes of Health; NIDDK = National Institute of Diabetes and
Digestive and Kidney Disease; NEI = National Eye Institute; NHLBI = National Heart, Lung and Blood Institute;
NCRR = National Center for Research Resources; NICHD = National Institute of Child Health and Human
Development; CDC = Centers for Disease Control and Prevention; IHS = Indian Health Service; AHCPR = Agency
for Health Care Prevention and Research; PHS = Public Health Service; HCFA = Health Care Financing
Administration.

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