SACRAMENTO, Calif. 鈥 Gov. Gavin Newsom on Saturday announced the selection of Utah-based to produce low-cost insulin for California, an unprecedented move that makes good on his promise to put state government in direct competition with the brand-name drug companies that dominate the market.
鈥淧eople should not be forced to go into debt to get lifesaving prescriptions,鈥 Newsom said. 鈥淐alifornians will have access to some of the most inexpensive insulin available, helping them save thousands of dollars each year.鈥
The contract, with an that Newsom and his fellow Democratic lawmakers approved last year, calls for Civica to manufacture state-branded insulin and make the lifesaving drug available to any Californian who needs it, regardless of insurance coverage, by mail order and at local pharmacies. But insulin is just the beginning. Newsom said the state will also look to produce the opioid overdose reversal drug naloxone.
Allan Coukell, Civica鈥檚 senior vice president of public policy, told KHN that the nonprofit drugmaker is also in talks with the Newsom administration to potentially produce other generic medications, but he declined to elaborate, saying the company is focused on making cheap insulin widely available first.
鈥淲e are very excited about this partnership with the state of California,鈥 Coukell said. 鈥淲e鈥檙e not looking to have 100% of the market, but we do want 100% of people to have access to fair insulin prices.鈥
As insulin costs for consumers have soared, Democratic lawmakers and activists have called on the industry to rein in prices. Just weeks after President Joe Biden attacked Big Pharma for jacking up insulin prices, the three drugmakers that control the insulin market 鈥 Eli Lilly and Co., Novo Nordisk, and Sanofi 鈥 announced they would of some products.
Newsom, who has previously accused the pharmaceutical industry of gouging Californians with 鈥渟ky-high prices,鈥 argued that the launch of the state鈥檚 generic drug label, , will add competition and apply pressure on the industry. Administration officials declined to say when California鈥檚 insulin products would be available, but experts say it could be as soon as 2025. Coukell said the state-branded medication will still require approval from the FDA, which can take roughly 10 months.
The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of brand-name companies, . Reid Porter, senior director of state public affairs for PhRMA, said Newsom just 鈥渨ants to score political points.鈥
“If the governor wants to impact what patients pay for insulins and other medicines meaningfully, he should expand his focus to others in the system that often make patients pay more than they do for medicines,鈥 Porter said, blaming pharmaceutical go-between companies, known as pharmacy benefit managers, that negotiate with manufacturers on behalf of insurers for rebates and discounts on drugs.
The Pharmaceutical Care Management Association, which represents pharmacy benefit managers that it鈥檚 pharmaceutical companies that are to blame for .
Drug pricing experts, however, say pharmacy benefit managers and drugmakers share the blame.
Newsom administration officials say that inflated insulin costs force some to pay as much as $300 per vial or $500 for a box of injectable pens, and that too many Californians with diabetes skip or ration their medication. Doing so can lead to blindness, amputations, and life-threatening conditions such as heart disease and kidney failure. of California adults have diabetes.
Civica is of generic insulin, known as a biosimilar, which will be available both in vials and in injectable pens. They are expected to be interchangeable with brand-name products including Lantus, Humalog, and NovoLog. Coukell said the company would make the drug available for no more than $30 a vial, or $55 for five injectable pens.
Newsom said the state鈥檚 insulin will save many patients $2,000 to $4,000 a year, though critical questions about how California would get the products into the hands of consumers remain unanswered, including how it would persuade pharmacies, insurers, and retailers to distribute the drugs.
Last year, Newsom also secured to build a facility to manufacture insulin; Coukell said Civica is exploring building a plant in California.
California鈥檚 move, though never previously tried by a state government, could be blunted by recent industry decisions to lower insulin prices. In March, Lilly, Novo Nordisk, and Sanofi vowed to cut prices, with Lilly offering a , Novo Nordisk that would bring the price of a particular generic vial to $48, and one vial .
The governor鈥檚 office said it will cost the state $30 per vial to manufacture and distribute insulin and it will be sold at that price. Doing so, the administration argues, 鈥渨ill prevent the egregious cost-shifting that happens in traditional pharmaceutical price games.鈥
Drug pricing experts said generic production in California could further lower costs for insulin, and benefit people with high-deductible health insurance plans or no insurance.
鈥淭his is an extraordinary move in the pharmaceutical industry, not just for insulin but potentially for all kinds of drugs,鈥 said Robin Feldman, a professor at the University of California College of the Law-San Francisco. 鈥淚t鈥檚 a very difficult industry to disrupt, but California is poised to do just that.鈥
This story was produced by , which publishes , an editorially independent service of the .
