SACRAMENTO, CA. Gov. Gavin Newsom announced Saturday the selection of Utah-based generic drug maker Civica to produce low-cost insulin for California, an unprecedented move that makes good on his promise to bring the state government into direct competition with the brand. – name pharmaceutical companies that dominate the market.
“People shouldn’t be forced into debt to get lifesaving prescriptions,” Newsom said. “Californians will have access to some of the cheapest insulin available, saving them thousands of dollars each year.”
The $50 million contract, which Newsom and fellow Democratic lawmakers approved last year, calls for Civica to produce the state’s brand-name insulin and make the life-saving drug available to any Californian who needs it. has, 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-reversing drug naloxone.
Alan Kuckel, Civica’s 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 drugs, but he declined to elaborate, saying the company is focused on the first in turn on making cheap insulin widely available. .
“We are very excited about this partnership with the state of California,” Kukel said. “We don’t want 100 percent of the market, but we want 100 percent of people to have access to fair insulin prices.”
As the cost of insulin to consumers has risen, Democratic lawmakers and activists have called on the industry to rein in prices. Just weeks after President Joe Biden attacked Big Pharma for raising insulin prices, the three drugmakers that control the insulin market — Eli Lilly and Co., Novo Nordisk and Sanofi — announced , which will reduce the list prices of some products.
Newsom, who has previously accused the pharmaceutical industry of luring Californians with “high prices,” argued that launching the state’s generic drug label, CalRx, would increase competition and put pressure on the industry. Administration officials declined to say when the California insulin product would be available, but experts say it could be as early as 2025. Kukel said the state-owned brand drug would still require FDA approval, which could take about 10 months.
The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of brand name companies, criticized California’s move. PhRMA’s senior director of public affairs, Reed Porter, said Newsom is just “looking to score political points.”
“If the governor wants to affect how patients pay for insulin and other drugs, he should expand his focus to others in the system that often make patients pay more than they pay for the drugs,” Porter said, blaming drug companies. known as pharmacy benefit managers, which negotiate drug discounts and rebates with manufacturers on behalf of insurers.
The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, in turn argued that drug companies were to blame for the high prices.
Drug pricing experts, however, say pharmacy benefit managers and pharmacists share the blame.
Newsom administration officials say inflated insulin costs are forcing some to pay as much as $300 per vial or $500 per box of injection pens, and that many Californians with diabetes are missing their medication or overdosing. It can lead to blindness, amputation, and life-threatening conditions such as heart disease and kidney failure. Almost 10% of California adults have diabetes.
Civica is developing three types of generic insulin, known as biosimilars, that will be available in both vials and injectable pens. They are expected to be interchangeable with brand-name products including Lantus, Humalog and NovoLog. Kukel said the company will make the drug available for no more than $30 per vial, or $55 for five injection pens.
Newsom said the state’s insulin would save many patients $2,000 to $4,000 a year, though critical questions about how California will get the product to consumers remain unanswered, including how it will convince pharmacies, insurers and retailers. distribute the drugs.
Last year, Newsom also secured $50 million in seed money to build a facility to produce insulin; Kukel said Civica is looking into building a plant in California.
California’s move, though never tested by the state government, could be clouded by recent industry decisions to lower insulin prices. In March, Lilly, Novo Nordisk and Sanofi pledged to lower prices, with Lilly offering a vial for $25 a month; Novo Nordisk is promising big cuts to bring the price of a certain generic vial down to $48; and Sanofi are also cutting prices to $64 per vial.
The governor said it would cost the state $30 per vial to manufacture and distribute the insulin, and it would be sold at that price. The administration argues that doing so would “prevent the egregious cost-shifting that occurs in traditional pharmaceutical price games.”
Drug pricing experts say generic manufacturing in California could further lower insulin costs and benefit people with high-deductible health insurance plans or no insurance.
“This is an extraordinary step in the pharmaceutical industry, not just for insulin, but potentially for all kinds of drugs,” said Robin Feldman, a professor at the University of California, San Francisco’s College of Law. “It’s a very difficult industry to disrupt, but California is poised to do just that.”
This story was prepared by KHN, which publishes California Healthline, an independent editorial service of the California Health Foundation.