California Governor Gavin Newsom announced Saturday that the state has launched a 10-year partnership with the drugmaker to produce insulin for its residents at a much lower cost.
the state plans Insulin sells at a cost of $30 for a 10-milliliter vial, Newsom said at a news conference Saturday near Los Angeles. The insulin will be manufactured by Civica Rx, a non-profit pharmaceutical company. The product isn’t expected to hit store shelves until at least next year.
“Thank you for being willing 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.”
Francine Orr/Los Angeles Times via Getty Images
Back in July 2022, Newsom announced that he had approved a budget of $100 million California to make its own insulin.
Many questions remain, however. Neither the state nor Civica has located a California-based manufacturing facility. Regulatory approvals will be required. It is likely that competitors will be able to lower their prices and undercut the country’s product.
This also comes after many of the major insulin manufacturers recently announced that they would be cutting prices as well. Eli Lilly And Novo Nordisk This month they said they would cut the cost of insulin by up to 70% and 75%, respectively.
Eli Lilly said it will automatically cap out-of-pocket insulin costs at $35 for insured individuals, and expand the Insulin Value program.
Anthony Wright, executive director of Health Access California, a statewide consumer healthcare advocacy group, welcomed Newsom’s announcement, saying that efforts by Californians and others to develop a competing generic drug were likely a factor in driving insulin manufacturers to lower their prices.
There are still obstacles.
“Working on developing a generic, getting FDA approval and setting up manufacturing is going to take real time,” Wright said in an email. “There may be more time in efforts to get doctors to prescribe the drug, insurers and (pharmacy benefit managers) to include it in their allowances and patients and the public to accept and order it.”
There may 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 well-established market, Newsom said taxpayers will have “very significant protection.”
If for any reason the deal doesn’t work out in favor of the state, he said, “there are all kinds of provisions that would allow us to opt out.”
According to state documents, the proposed program could save many patients between $2,000 and $4,000 annually. In addition, lower costs can result in significant savings because the state buys the product each year for millions of people on its publicly funded health plans.
Just days ago, President Biden said his administration was focusing “intensively” on lowering health care costs, including pressuring drug companies to lower insulin costs. Legislation enacted last year capped insulin co-payments 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 in an injectable form, is a key tool in the fight against the nationwide overdose crisis.
“We’re not stopping here,” Newsom said.
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