The logcial way around both problems is to transplant into diabetics pancreatic beta cells from pigs — which could be made available in unlimited amounts — and then protect them from the immune system by encapsulating them in a membrane which would keep out the immunologically active cells but still allow nutritional substances to enter and insulin to escape. This was first accomplished by Dr. Valdes working in Mexico in 1996.
The problem is that while the membrane protects the encapsulated cells, it does not permit a normal nutrition supply to reach the cells, which only receive their nourishment by mechanical diffusion across the membrane, rather than normally through the vascular system. This means that the toxic by-products of metabolism build up and insufficient oxygen and other nutrients reach the cells, so they function poorly and die off quickly. One study found that encapsulated pig islet transplants produced only a 30% reduction in the insulin dose the recipients required and lasted for only 49 weeks, after which the pre-transplant status returned.
While it is theoretically possible simply to transplant diabetics again and again with encapsulated islets every time they wear out, one company working on this treatment estimates each islet cell insertion operation will cost about $100,000, which could mean diabetics would have to pay about $50,000 a year for their entire life to maintain normal blood sugar levels — assuming the transplant can be made to work more effectively. Also, with repeated surgery, the abdomen will form scar tissue and may become unavailable to receive further implants. There is also a theoretical danger of massive peritonitis from repeated insertion of capsules into the abdomen, or from degraded cellular material leaking out of the pores of the differentially permeable capsule membrane.
Another danger of concern to regulators is that the pig islets may contain novel viruses which have not yet jumped to humans, and that if this happens, there may be a lethal epidemic in the human population from sudden exposure to a virus for which humanity has no immunity. Also, hybrid viruses may form from mixing porcine and human viral strains in the same body, and the abdomen is the perfect petri dish for growing new infective agents.
This seems unlikely, however, since millions of humans since 1931 have already been treated with fresh cell implants from various animals to boost the functional capacity of diseased organs, and the feared viral transmission from animals to humans generating a lethal pandemic has not yet occurred. However, various governments are now saying that any diabetics receiving encapsulated pig cells will have to agree never to have children afterwards, to report to local government health officials whenever they travel to a new jurisdiction, and never to donate blood. They also insist that only pigs raised in a sterile environment be used, which vastly increases the costs, even though fresh cell therapy has been allowed to operate in Europe for the past 80 years with no such restrictions.
Sources: R. Elliott, et al, "Live encapsulated porcine islets from a type 1 diabetic patient 9.5 years after xenotransplantation," XENOTRANSPLANTATION, vol. 14, no. 2, p. 157 (2007); J. Isaac, et al, "Transplantation of neonatal porcine islets and sertoli cells," TRANSPLANTATION PROCEEDINGS, vol. 37, no. 1, p. 48 (2005)