California awards contract to produce its own affordable insulin

California Gov. Gavin Newsom announced a new contract with nonprofit drug maker Civica Rx, a move that brings the state one step closer to building its own line of insulin to lower the cost of the drug.

Once the drugs are approved by the Food and Drug Administration, Newsom said at a press conference on Saturday, Civica — under a 10-year, $50 million deal with the state — will begin making the new CalRx insulins in end of this year.

The contract covers three forms of insulin – glargine, lispro and aspart. Civica expects them to be interchangeable with well-known brands of insulin: Sanofi’s Lantus, Eli Lilly’s Humalog, and Novo Nordisk’s Novolog, respectively.

State-brand insulins will cost no more than $30 for a 10-ml vial and no more than $55 for a box of five pre-filled pen cartridges for both insured and uninsured patients. Medicines will available throughout the country— reported in the akimat.

“This is a big deal, folks,” the governor said. “That doesn’t happen anywhere else in the United States.”

A 10-ml vial of insulin can cost up to $300, according to Newsom. Under the new contract, out-of-pocket patients can save up to $4,000 a year. This year, the federal government has set a $35 per month cap on out-of-pocket insulin spending for some Medicare members, including seniors.

Advocates have been pushing for years to make insulin more affordable. According to a report published last year in the journal Annals of Internal Medicine1 in 6 Americans with diabetes who use insulin said the cost of the drug is forcing them to ration their supply.

“This is an extraordinary step in the pharmaceutical industry, not just for insulin, but for all kinds of drugs,” Robin Feldman, a professor at the University of California, San Francisco College of Law, told Kaiser Health News. “This industry is very difficult to disrupt, but California is ready to do just that.”

The news comes after several drug makers that dominate the insulin market recently announced they would cut list prices for their insulin. (The list prices set by the drug manufacturer often represent what uninsured patients—or those with high deductibles—have to pay for the drug out of pocket.)

After rival Eli Lilly announced a plan to cut prices on some their insulin by 70%, Novo Nordisk and Sanofi followed suit last week, announcing they will cut the list prices of some of their insulin products by as much as 75% next year. Together, these three companies control about 90% of the insulin supply in the US.

Newsom said the state’s efforts are addressing a major problem of insulin inaccessibility by not forcing taxpayers to subsidize drug manufacturers’ inflated prices.

“What this does,” he said of the California plan, “is a game changer. This fundamentally reduces the cost. Dot. Dot”.

Insulin is an important drug for people with type 1 diabetes, whose bodies do not produce enough insulin. Type 1 people need insulin daily to survive.

The insulin contract is part of California’s broader CalRx initiative to produce generic drugs under the state’s own brand. Newsom says the state is pushing for the production of generic naloxone.