California announces plan to produce $30 insulin

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

State Plans Newsom said at a press conference Saturday near Los Angeles that insulin is to be sold for $30 for a 10-ml vial. The insulin will be manufactured by Civica Rx, a not-for-profit pharmaceutical company. The product isn’t expected on store shelves until at least next year.

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

Gavin Newsom
Dr. Tanya Spertos, MD, president-elect of the California Medical Association, left, speaks briefly with California Governor Gavin Newsom, right, after a press conference in Downey, California. Newsom announced that the state has partnered with a company to develop affordable insulin. March 18, 2023.

Francine Orr/Los Angeles Times via Getty Images

In July 2022, Newsom announced that he had passed a budget that allocated $100 million. California makes its own insulin.

However, many questions remain. The state and Sevaca have not yet located a manufacturing facility in California. Regulatory approvals will be required. It is possible that competitors may lower their prices and undercut state products.

This comes even as several major insulin manufacturers recently announced that they would also be cutting prices. Eli Lilly And Novo Nordisk They said that this month they will reduce the price of insulin by 70% and 75% respectively.

Eli Lilly said it would automatically limit out-of-pocket insulin costs to $35 for insured individuals, 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 efforts by California and others to develop competitive generic insulin are a factor forcing manufacturers to reduce their prices.

Still, there are obstacles.

“It will take real time to develop a generic, get FDA approval and establish manufacturing,” Wright said in an email. “There may be more time in the effort to get doctors to prescribe the drug, get insurers and (pharmacy benefit managers) to add it to their formularies, and get acceptance and demand from patients and the public.”

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

Even with the challenges of entering a competitive, established market, Newsom said taxpayers will have “a lot of protections.”

If for any reason the deal doesn’t work out to the state’s advantage, “there are all kinds of provisions that would allow us to … pull out,” he said.

The proposed program could save many patients between $2,000 and $4,000 a year, according to state documents. In addition, lower costs can result in substantial savings as the state purchases products on publicly funded health plans for millions of people each year.

Just a few days ago, President Biden said his administration is “intensely focused” on reducing health care costs, including pressuring pharmaceutical companies to reduce insulin costs. included. Legislation enacted last year capped Medicare beneficiaries’ copays for insulin at $35 per month. Biden has proposed expanding the 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 in injectable form, is considered a key weapon in the fight against the country’s overdose crisis.

“We’re not stopping here,” Newsom said.

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