Gov. Gavin Newsom announced over the weekend that California will provide $30 insulin for those who need it, with a 10 ml vial of insulin significantly reduced from the average cost in the $175-$300 range.
Since the start of the decade, California lawmakers have been trying to lower the cost of prescription drugs in California. While the cost of prescription drugs can be high due to R&D costs, liability concerns and other factors, Newsom decided to sidestep these issues and proposed in January 2020 to open a state-owned prescription drug manufacturing facility to try to keep costs down. This was eventually reflected in the form of a bill that was passed and signed by September 2020.
However, government officials focused on insulin the following year as the cost of insulin became a hot issue across the country due in part to supply chain issues related to COVID-19, causing prices to rise significantly. As the cost of one vial of insulin rose from $21 in 1999 to $332 in 2019, and most diabetics require two or three vials per month, the rising costs were considered significant. In 2022, Newsom gave the state $100 million to produce cheap, generic insulin.
While the state began to establish production, it also persecuted pharmaceutical companies. In January, Attorney General Rob Bonta sued insulin makers Eli Lilly, Sanofi, and Novo Nordisk, as well as pharmacy managers (PBMs) CVS Caremark, Express Scripts, and OptumR, over alleged violations of state unfair competition law and skyrocketing insulin prices. . in recent years. Bonta’s office pointed to studies in the lawsuit, including one that showed that one in four diabetics cannot afford insulin, and that insulin costs ten times more in the United States than elsewhere. Through the lawsuit, Bonta seeks to control the cost of insulin by promoting price competition for insulin and eliminating fraudulent practices, as well as seeking redress for Californians who paid a higher price for the drug.
All this led to a statement made by Newsom over the weekend. Newsom said CalRx had a $30 deal with insulin manufacturer CIVICA in California. In addition, the governor said the state would soon develop its own version of naloxone, a drug also known as narcan, that eliminates opioid overdose.
“People shouldn’t be forced to go into debt to get life-saving drugs,” Newsom said at a press conference on Saturday. “Through CalRx, Californians will have access to some of the most affordable insulin available, saving them thousands of dollars annually. But we’re not resting on our laurels – California will look to produce our own naloxone as part of our plan to tackle the fentanyl crisis.”
NEW: California will produce one of the most affordable insulin in America.
The new CalRx insulin will only cost $30.
It will be available to all Californians — and nationwide.
Next: production of our own naloxone.
— Gavin Newsom (@GavinNewsom) March 18, 2023
California Secretary of Health and Human Services Mark Galey added: “To deal with the affordability crisis in California, we must address the high cost of prescription drugs. The CalRx Biosimilar Insulin initiative will benefit Californians who today pay too much for a drug we know saves and changes lives.”
Experts note that many companies have outpaced California in a sharp decline in insulin prices.
The price of insulin will subsequently drop by about 90%, allowing out-of-pocket patients to save between $2,000 and $4,000 a year, according to a fact sheet released Sunday.
“With CalRx, unlike private companies, we get the underlying cost – price is price, and CalRx will prevent the blatant cost reallocation that occurs in traditional pharmaceutical price games,” the governor’s office said. “Production and distribution will cost us $30, and that is the amount for which the consumer can buy it. You don’t need a voucher or coupon to access this price, and it’s available to everyone, regardless of insurance plan. This is an important step not only in reducing cost to the consumer, but in cutting costs across the board to make prescription drugs cheaper for all Californians.”
However, the production of insulin and naloxone still faces many problems in the state. Production capacity has not been built, and many critics say the $30 mark will be difficult to maintain, especially if supply shortages or problems reappear.
“California really inflated the cost of the bottle,” Sage Thompson, a spokesman for a prescription drug supplier, told the Globe on Monday. “Gov. Newsom used $300 a bottle and pretended it was the regular price. But he just used the rare, worst value. It is usually much cheaper than this. Sure, it’s not $30 cheap, but it’s not usually $300, and when it does, things have to go wrong to justify the higher cost.”
“Many drug manufacturers also limit the maximum monthly price of insulin. Just a few days ago, Sanofi was making $35 a month for out-of-pocket insulin in the US. California was late to the party about this. They always tried to make it look like they were ahead of the competition, but in fact everyone else was in a hurry to make insulin cheaper, including the drug companies themselves. The California CIVICA deal is not groundbreaking, as Newsom tries to claim. It’s just the latest company to seriously cut costs.”
“You know, for a lot of people, the costs were very high, people spoke up, federal agencies stepped in, and the costs came down a lot, but the companies didn’t get hurt. In a nutshell, here’s what happened. California isn’t really special here, although Newsom pretends to be the white knight in all of this. As for naloxone, it makes sense to increase production and make it more affordable, but heck, at least have a plant ready to go before announcing it.”
As of Monday, no manufacturing center for the drug in California has been announced.