SACRAMENTO, Calif. – Governor Gavin Newsom announced the roster of Utah-based on Saturday generic drug manufacturer Civica to produce low-cost insulin for California, an unprecedented move that fulfills its promise to involve the state government direct competition with the branded drug companies that dominate the market.
“People shouldn’t be forced into debt to get life-saving prescriptions,” Newsom said. “Californians will have access to some of the most inexpensive insulin available, saving them thousands of dollars each year.”
The contract, with a initial cost of $50 million that Newsom and his fellow Democratic lawmakers approved last year calls for Civica to produce state-brand insulin and make the lifesaving drug available to every Californian who needs it, regardless of insurance coverage, through mail order and at local pharmacies. But insulin is just the beginning. Newsom said the state will also look into production of the opioid overdose reversal drug naloxone.
Allan Coukell, Civica’s senior vice president of public policy, told KHN the nonprofit drugmaker is also in talks with the Newsom government to potentially produce other generic drugs, but he declined to elaborate, saying the company is targeting making cheap insulin widely available for the first time .
“We are very excited about this partnership with the State of California,” said Coukell. “We don’t want 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 skyrocketed, Democratic lawmakers and activists have called on the industry to rein in prices. Just weeks after President Joe Biden Big Pharma attacked for raising insulin prices, the three drugmakers that control the insulin market — Eli Lilly and Co., Novo Nordisk, and Sanofi — announced they would lower the list prices of some products.
Newsom, who previously accused the pharmaceutical industry of gutting Californians with “skyrocketing prices,” argued that the launch of the state’s generic drug label, CalRx, will add competition and put pressure on the industry. Administrative officials declined to say when California’s insulin products would be available, but experts say it could be as early as 2025. Coukell said the state-brand medication still needs FDA approval, which could take about 10 months.
The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of branded companies, overturned 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 meaningfully influence what patients pay for insulins and other drugs, he needs to expand his focus to others in the system who often make patients pay more than they do for drugs,” said Porter, blaming pharmaceutical middlemen. known as pharmacist benefit managers, who negotiate discounts and rebates on medications with manufacturers on behalf of insurers.
The Pharmaceutical Care Management Association, which represents pharmacy managers argued in turn that it is the pharmaceutical companies that are to blame high prices.
However, drug pricing experts say pharmacy benefit managers and drugmakers share the blame.
Newsom administration officials say high insulin costs are forcing some to pay as much as $300 per vial or $500 for a box of injectable pens, and that too many Californians with diabetes are skipping or rationing their medications. This can lead to blindness, amputations 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 a biosimilar, which will be available in both vials and injectable pens. They are expected to be interchangeable with branded products including Lantus, Humalog, and NovoLog. Coukell said the company would make the drug available for no more than $30 per 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 consumers’ hands remain unanswered, including how it would convince pharmacies, insurers and retailers to distribute medicines.
Last year, Newsom also insured $50 million in seed money build a facility to produce insulin; Coukell said Civica is looking into building a plant in California.
California’s move, while never trialled by a state government, could be blunted by recent industry decisions to cut insulin prices. In March, Lilly, Novo Nordisk and Sanofi pledged to cut prices, with Lilly a vial for $25 per month; Novo Nordisk promise big cuts to bring the price of a certain generic vial to $48; And Sanofi is also lowering priceswith one vial pegged at $64.
The governor’s office said it will cost the state $30 per vial to produce and distribute insulin and will sell for that price. Doing so, the administration argues, “will avoid the blatant cost shifting that takes place in traditional pharmaceutical pricing games.”
Drug price experts said California generic production could fall further costs for insulinand benefit those with high deductibles or no insurance.
“This is an extraordinary step in the pharmaceutical industry, not just for insulin, but potentially for all types 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 about to do just that.”
This story was produced by KHNwho publishes California health linean editorially independent service of the California Healthcare Foundation.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Together with Policy Analysis and Polling, KHN is one of the three major operational programmes KFF (Foundation Family Kaiser). KFF is an endowed non-profit organization that provides information on health issues to the nation.
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