Neem oil has many complex active ingredients. Rather than being simple poisons, those ingredients are similar to the hormones that insects produce. Insects take up the neem oil ingredients just like natural hormones.
Neem enters the system and blocks the real hormones from working properly. Insects "forget" to eat, to mate, or they stop laying eggs. Some forget that they can fly. If eggs are produced they don't hatch, or the larvae don't moult.
Obviously insects that are too confused to eat or breed will not survive. The population eventually plummets, and they disappear. The cycle is broken.
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