SACRAMENTO, Calif. – Governor Gavin Newsom on Saturday announced the selection of Utah-based generic drug maker Civica to produce low-cost insulin for California, an unprecedented move that fulfills its promise to put the state government in competition with directly with the brand. -name the pharmaceutical companies that dominate the market.
“People should not be forced to go into debt to get life-saving prescriptions,” Newsom said. “Californians will have access to some of the cheapest 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 passed last year, requires Civica to manufacture state-branded insulin and make the lifesaving drug available to any Californian who needs it, regardless of coverage. insurance, 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 for public policy, told KHN that the nonprofit drugmaker is also in talks with the Newsom government to potentially produce other generic drugs, but he declined to go into detail, saying the company is focused on making cheap insulin widely available first. .
“We are very excited about this partnership with the State of California,” said Coukell. “We don’t intend to have 100% of the market, but we want 100% of people to have access to fair insulin prices.”
As insulin costs for consumers soar, Democratic lawmakers and activists urged the industry to rein in prices. Just weeks after President Joe Biden attacked Big Pharma for raising insulin prices, the three pharmaceutical companies that control the insulin market – Eli Lilly and Co., Novo Nordisk and Sanofi – announced that they would reduce the list prices of some products.
Newsom, who has previously accused the pharmaceutical industry of misleading Californians with “sky high prices,” argued that the introduction of the state’s generic drug label, CalRx, will increase competition and put pressure on the industry. Government officials declined to say when California’s insulin products will be available, but experts say it could be as early as 2025. Coukell said the state-branded drug would still require FDA approval, which could take about 10 months.
Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of big-name companies, criticized California’s decision. Reid Porter, PhRMA’s senior director of state public affairs, said Newsom just “want to score political points.”
“If the governor wants to significantly impact what patients pay for insulins and other drugs, he must expand his focus to others in the system that often make patients pay more than they pay for drugs,” Porter said, blaming intermediary drug companies. , known as pharmaceutical benefit managers, who negotiate with manufacturers on behalf of insurers for drug rebates and discounts.
The Pharmaceutical Care Management Association, which represents pharmaceutical benefit managers, argued, for its part, that it is the pharmaceutical companies that are to blame for the high prices.
Drug pricing experts, however, say pharmaceutical benefits managers and drugmakers share the blame.
Newsom administration officials say inflated insulin costs force some to pay as much as $300 a vial or $500 for a box of injectable pens, and that many Californians with diabetes omit or ration their medication. This 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 biosimilars, 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 a bottle, or $55 for five injectable pens.
Newsom said the state’s insulin will save many patients $2,000 to $4,000 a year, although critical questions about how California would get the products into consumers’ hands remain unanswered, including how to persuade pharmacies, insurers and retailers to distribute the medications.
Last year, Newsom also secured $50 million in seed capital to build a facility to manufacture insulin; Coukell said Civica is exploring building a factory in California.
California’s decision, while never attempted by a state government, may be tempered by recent industry decisions to lower insulin prices. In March, Lilly, Novo Nordisk and Sanofi pledged to cut prices, with Lilly offering a bottle for $25 a month; Novo Nordisk promises big reductions to bring the price of a specific generic bottle to $48; and Sanofi has also slashed prices, with a bottle priced at $64.
The governor’s office said it will cost the state $30 per vial to manufacture and distribute insulin and will sell for that price. Doing so, the government argues, “will prevent the blatant cost shifting that occurs in traditional pharmaceutical pricing games.”
Drug pricing experts said producing generics in California could further lower insulin costs and benefit people with high-deductible or uninsured health plans.
“This is an extraordinary movement in the pharmaceutical industry, not just for insulin, but potentially for all types of drugs,” said Robin Feldman, professor at the University of California, San Francisco School of Law. “It’s a very difficult industry to disrupt, but California is ready to do just that.”
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with Policy Analysis and Research, KHN is one of the three main operational programs of the KFF (Kaiser Family Foundation). KFF is a non-profit organization that provides information on health issues for the nation.
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