California announces $30 insulin production plan

California Governor Gavin Newsom announced Saturday that the state has launched a 10-year partnership with a drugmaker to produce insulin for its residents at a significantly lower cost.

The state plans sell insulin for $30 for a 10-milliliter vial, Newsom said at a Saturday news conference near Los Angeles. The insulin will be manufactured by Civica Rx, a not-for-profit pharmaceutical company. The product isn’t expected to hit store shelves until at least next year.

“Thank you for wanting to disrupt the market,” Newsom said. “Thank you for being willing to save lives without fear of failure, but most importantly without money being your motivation.”

In July 2022, Newsom announced that he had approved a budget that allocated $100 million for California to manufacture its own insulin.

Many questions remain, however. The state and Civica have yet to locate a California-based manufacturing plant. Regulatory approvals will be required. It is possible that competitors will reduce their prices and undermine the state’s product.

It also comes after several major insulin makers recently announced they would also cut prices. Eli Lily And Novo Nordisk said this month they would cut the cost of insulin by up to 70% and 75%, respectively.

Eli Lilly said it would automatically cap insulin costs at $35 for policyholders and expand its insulin value program.

Anthony Wright, executive director of Health Access California, a statewide consumer health care advocacy group, welcomed Newsom’s announcement, saying the efforts of California and others to develop a competing generic are likely a factor in inducing insulin manufacturers to lower their prices.

Yet there are obstacles.

“The work to develop a generic, get FDA approval, and set up manufacturing will take real time,” Wright said in an email. “There may even be more time in the effort to get doctors to prescribe the drug, insurers and (drug benefit managers) to include it on their formularies and patients and the public to accept it and to ask.”

There could be other risks. State analysts have warned that California’s entry into the market could prompt other manufacturers to reduce the availability of their drugs, a potential unintended consequence.

Even with the challenges of entering a competitive and established market, Newsom said taxpayers would have “very broad protections.”

If for some reason the deal doesn’t work out for the benefit of the state, “there are all kinds of provisions that would allow us to … walk away,” he said.

According to state documents, the proposed program could save many patients between $2,000 and $4,000 a year. Additionally, the lower costs could result in substantial savings, as the state purchases the product each year for the millions of people benefiting from its publicly funded health plans.

Just days ago, President Biden said his administration was “intensely” focused on cutting health care costs, including pressuring pharmaceutical companies to cut insulin costs. . Legislation enacted last year capped copayments for insulin at $35 per month for Medicare beneficiaries. Biden has proposed extending that cap to all Americans.

The state of California is also exploring the possibility of bringing other drugs to market, including the overdose drug Naloxone. The drug, available as a nasal spray and as an injection, is seen as a key tool in tackling a nationwide overdose crisis.

“We don’t stop here,” Newsom said.