The latest issue of Forbes magazine features Steve Forbesobservations about a case in which capitalism has helped save lives.

The other day I read a piece in the Mayo Clinic publication Discovery’s Edge about the institution’s role nearly a century ago in the battle against diabetes. Back then the onset of diabetes was a death sentence. Doctors at Mayo and elsewhere had formulated special diets, which, strictly adhered to, might prolong life for as much as three to five years.

“Bessie B. was placed on a ketogenic diet … [which] consisted of a precise proportion of carbohydrates, proteins and fats determined by her weight, her blood glucose levels and a series of adjustments to customize it for her specific metabolism. … It was one of the first attempts at individualized medicine. The staff accounted for and analyzed everything that went into and was eliminated from her body, and laboratory tests determined how quickly she was metabolizing food so doctors could properly balance and time her feedings. The amount of food she received was small, 850 to 900 calories a day. In order to survive, early diabetes patients had to nearly starve.”

In the fall of 1921 came the news of an extraordinary breakthrough in a Canadian laboratory at the University of Toronto. “Dr. Frederick Banting and medical student Charles Best had been experimenting with dogs in the laboratory of Dr. J.J.R. Macleod. They had isolated, refined and proven the effectiveness of insulin in an arduous series of animal studies. The formal presentation of the discovery was made at a research conference that Christmas in New Haven, Conn.”

Amazingly, patenting discoveries was discouraged in the academic world. “Eli Lilly and his managers had been urging Drs. Banting and Macleod to patent their formula so it could be standardized and safely manufactured.” The Canadians ultimately relented.

What can we learn from this?

Progress comes from new knowledge. Yet gaining this requires constant experimentation and building on the work of others. Preinsulin diets didn’t arrest the onslaught of diabetes. But the research was critical to the development of diets that, with the injections of insulin, enormously prolonged life. Banting, armed with only a bachelor’s degree in medicine, came upon his groundbreaking theory after reading various articles and reports on the pancreas and diabetes.

We need to break Eroom’s Law. The obverse of Moore’s Law, which positively postulates that the computing power of an integrated circuit doubles every 18 to 24 months, this version has the real cost of bringing a new drug to market–from R&D to FDA approval–doubling every nine years. Today the cost of successfully developing a new drug is as high $2.6 billion, and it can take longer than ten years for the drug to clear regulatory hurdles. Insulin, however, was on the market less than 18 months after Banting’s breakthrough–and at an infinitely tiny fraction of inflation-adjusted costs today.

Two other lessons? Animal testing should not be banned, and capitalism enables a life-saving drug like insulin to be created and made available to millions of afflicted people.