Join our mailing list to receive the latest news and updates from our team.
You have Successfully Subscribed!
Governor Gavin Newsom has followed through on a promise to bypass price-gouging drug companies and begin direct manufacturing of low-cost insulin for California diabetes patients.
Gov. Gavin Newsom on March 18th announced the selection of Utah-based generic drug manufacturer Civica 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.
“People should not be forced to go into debt to get lifesaving prescriptions,” Newsom said. “Californians will have access to some of the most inexpensive insulin available, helping them save thousands of dollars each year.”
The contract, with an initial cost of $50 million 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’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 medications, but he declined to elaborate, saying the company is focused on making cheap insulin widely available first.
“We are very excited about this partnership with the state of California,” Coukell said. “We’re not looking to have 100% of the market, but we do want 100% of people to have access to fair insulin prices.”
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—Eli Lilly and Co., Novo Nordisk, and Sanofi—announced they would slash the list prices of some products.
Newsom, who has previously accused the pharmaceutical industry of gouging Californians with “sky-high prices,” argued that the launch of the state’s generic drug label, CalRx, will add competition and apply pressure on the industry. Administration officials declined to say when California’s 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, blasted California’s move. Reid Porter, senior director of state public affairs for PhRMA, said Newsom just “wants to score political points.”
“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,” 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 argued in turn that it’s pharmaceutical companies that are to blame for high prices.
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. Nearly 10% of California adults have diabetes.
Civica is developing three types 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’s 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 $50 million in seed money to build a facility to manufacture insulin; Coukell said Civica is exploring building a plant in California.
California’s 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 vial at $25 per month, Novo Nordisk promising major reductions that would bring the price of a particular generic vial to $48, and Sanofi pegging one vial at $64.
The governor’s office said it will cost the state $30 per vial to manufacture and distribute insulin and it will be sold at that price. Doing so, the administration argues, “will prevent the egregious cost-shifting that happens in traditional pharmaceutical price games.”
Drug pricing experts said generic production in California could further lower costs for insulin, and benefit people with high-deductible health insurance plans or no insurance.
“This is an extraordinary move in the pharmaceutical industry, not just for insulin but potentially for all kinds of drugs,” said Robin Feldman, a professor at the University of California College of the Law-San Francisco. “It’s a very difficult industry to disrupt, but California is poised to do just that.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
KFF Health News is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.
{"id":null,"mode":"form","open_style":"in_place","currency_code":"USD","currency_symbol":"$","currency_type":"decimal","blank_flag_url":"https:\/\/factkeepers.com\/wp-content\/plugins\/tip-jar-wp\/\/assets\/images\/flags\/blank.gif","flag_sprite_url":"https:\/\/factkeepers.com\/wp-content\/plugins\/tip-jar-wp\/\/assets\/images\/flags\/flags.png","default_amount":500,"top_media_type":"none","featured_image_url":false,"featured_embed":"","header_media":null,"file_download_attachment_data":null,"recurring_options_enabled":true,"recurring_options":{"never":{"selected":true,"after_output":"One time only"},"weekly":{"selected":false,"after_output":"Every week"},"monthly":{"selected":false,"after_output":"Every month"},"yearly":{"selected":false,"after_output":"Every year"}},"strings":{"current_user_email":"","current_user_name":"","link_text":"Leave a tip","complete_payment_button_error_text":"Check info and try again","payment_verb":"Pay","payment_request_label":"Factkeepers.com","form_has_an_error":"Please check and fix the errors above","general_server_error":"Something isn't working right at the moment. Please try again.","form_title":"Help Support Factkeepers","form_subtitle":null,"currency_search_text":"Country or Currency here","other_payment_option":"Other payment option","manage_payments_button_text":"Manage your payments","thank_you_message":"Thank you for being a supporter!","payment_confirmation_title":"Factkeepers.com","receipt_title":"Your Receipt","print_receipt":"Print Receipt","email_receipt":"Email Receipt","email_receipt_sending":"Sending receipt...","email_receipt_success":"Email receipt successfully sent","email_receipt_failed":"Email receipt failed to send. Please try again.","receipt_payee":"Paid to","receipt_statement_descriptor":"This will show up on your statement as","receipt_date":"Date","receipt_transaction_id":"Transaction ID","receipt_transaction_amount":"Amount","refund_payer":"Refund from","login":"Log in to manage your payments","manage_payments":"Manage Payments","transactions_title":"Your Transactions","transaction_title":"Transaction Receipt","transaction_period":"Plan Period","arrangements_title":"Your Plans","arrangement_title":"Manage Plan","arrangement_details":"Plan Details","arrangement_id_title":"Plan ID","arrangement_payment_method_title":"Payment Method","arrangement_amount_title":"Plan Amount","arrangement_renewal_title":"Next renewal date","arrangement_action_cancel":"Cancel Plan","arrangement_action_cant_cancel":"Cancelling is currently not available.","arrangement_action_cancel_double":"Are you sure you'd like to cancel?","arrangement_cancelling":"Cancelling Plan...","arrangement_cancelled":"Plan Cancelled","arrangement_failed_to_cancel":"Failed to cancel plan","back_to_plans":"\u2190 Back to Plans","update_payment_method_verb":"Update","sca_auth_description":"Your have a pending renewal payment which requires authorization.","sca_auth_verb":"Authorize renewal payment","sca_authing_verb":"Authorizing payment","sca_authed_verb":"Payment successfully authorized!","sca_auth_failed":"Unable to authorize! Please try again.","login_button_text":"Log in","login_form_has_an_error":"Please check and fix the errors above","uppercase_search":"Search","lowercase_search":"search","uppercase_page":"Page","lowercase_page":"page","uppercase_items":"Items","lowercase_items":"items","uppercase_per":"Per","lowercase_per":"per","uppercase_of":"Of","lowercase_of":"of","back":"Back to plans","zip_code_placeholder":"Zip\/Postal Code","download_file_button_text":"Download File","input_field_instructions":{"tip_amount":{"placeholder_text":"How much would you like to donate? You can change this amount to anything you would like.","initial":{"instruction_type":"normal","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."},"empty":{"instruction_type":"error","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."},"invalid_curency":{"instruction_type":"error","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."}},"recurring":{"placeholder_text":"Recurring","initial":{"instruction_type":"normal","instruction_message":"How often would you like to donate this?"},"success":{"instruction_type":"success","instruction_message":"How often would you like to donate this?"},"empty":{"instruction_type":"error","instruction_message":"How often would you like to donate this?"}},"name":{"placeholder_text":"Name on Credit Card","initial":{"instruction_type":"normal","instruction_message":"Enter the name on your card."},"success":{"instruction_type":"success","instruction_message":"Enter the name on your card."},"empty":{"instruction_type":"error","instruction_message":"Please enter the name on your card."}},"privacy_policy":{"terms_title":"Terms and conditions","terms_body":null,"terms_show_text":"View Terms","terms_hide_text":"Hide Terms","initial":{"instruction_type":"normal","instruction_message":"I agree to the terms."},"unchecked":{"instruction_type":"error","instruction_message":"Please agree to the terms."},"checked":{"instruction_type":"success","instruction_message":"I agree to the terms."}},"email":{"placeholder_text":"Your email address","initial":{"instruction_type":"normal","instruction_message":"Enter your email address"},"success":{"instruction_type":"success","instruction_message":"Enter your email address"},"blank":{"instruction_type":"error","instruction_message":"Enter your email address"},"not_an_email_address":{"instruction_type":"error","instruction_message":"Make sure you have entered a valid email address"}},"note_with_tip":{"placeholder_text":"Your note here...","initial":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"empty":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"not_empty_initial":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"saving":{"instruction_type":"normal","instruction_message":"Saving note..."},"success":{"instruction_type":"success","instruction_message":"Note successfully saved!"},"error":{"instruction_type":"error","instruction_message":"Unable to save note note at this time. Please try again."}},"email_for_login_code":{"placeholder_text":"Your email address","initial":{"instruction_type":"normal","instruction_message":"Enter your email to log in."},"success":{"instruction_type":"success","instruction_message":"Enter your email to log in."},"blank":{"instruction_type":"error","instruction_message":"Enter your email to log in."},"empty":{"instruction_type":"error","instruction_message":"Enter your email to log in."}},"login_code":{"initial":{"instruction_type":"normal","instruction_message":"Check your email and enter the login code."},"success":{"instruction_type":"success","instruction_message":"Check your email and enter the login code."},"blank":{"instruction_type":"error","instruction_message":"Check your email and enter the login code."},"empty":{"instruction_type":"error","instruction_message":"Check your email and enter the login code."}},"stripe_all_in_one":{"initial":{"instruction_type":"normal","instruction_message":"Enter your credit card details here."},"empty":{"instruction_type":"error","instruction_message":"Enter your credit card details here."},"success":{"instruction_type":"normal","instruction_message":"Enter your credit card details here."},"invalid_number":{"instruction_type":"error","instruction_message":"The card number is not a valid credit card number."},"invalid_expiry_month":{"instruction_type":"error","instruction_message":"The card's expiration month is invalid."},"invalid_expiry_year":{"instruction_type":"error","instruction_message":"The card's expiration year is invalid."},"invalid_cvc":{"instruction_type":"error","instruction_message":"The card's security code is invalid."},"incorrect_number":{"instruction_type":"error","instruction_message":"The card number is incorrect."},"incomplete_number":{"instruction_type":"error","instruction_message":"The card number is incomplete."},"incomplete_cvc":{"instruction_type":"error","instruction_message":"The card's security code is incomplete."},"incomplete_expiry":{"instruction_type":"error","instruction_message":"The card's expiration date is incomplete."},"incomplete_zip":{"instruction_type":"error","instruction_message":"The card's zip code is incomplete."},"expired_card":{"instruction_type":"error","instruction_message":"The card has expired."},"incorrect_cvc":{"instruction_type":"error","instruction_message":"The card's security code is incorrect."},"incorrect_zip":{"instruction_type":"error","instruction_message":"The card's zip code failed validation."},"invalid_expiry_year_past":{"instruction_type":"error","instruction_message":"The card's expiration year is in the past"},"card_declined":{"instruction_type":"error","instruction_message":"The card was declined."},"missing":{"instruction_type":"error","instruction_message":"There is no card on a customer that is being charged."},"processing_error":{"instruction_type":"error","instruction_message":"An error occurred while processing the card."},"invalid_request_error":{"instruction_type":"error","instruction_message":"Unable to process this payment, please try again or use alternative method."},"invalid_sofort_country":{"instruction_type":"error","instruction_message":"The billing country is not accepted by SOFORT. Please try another country."}}}},"fetched_oembed_html":false}
