California announces partnership with drugmaker to create affordable insulin: ‘Game changer’

California Governor Gavin Newsom announced Saturday that it has formed a 10-year partnership with nonprofit drugmaker Civica Rx to produce an affordable, state-branded insulin to rival long-time manufacturers and lower prices for millions of Americans.

Newsom said she hopes Golden State’s emergence as an insulin producer will cause prices to drop, as research shows they have more than tripled over the past few decades.

“We intend to do this with market disruption,” Newsom said during an announcement at a drug store near Los Angeles.

The Democratic governor said the partnership would be a “game changer” for the 8 million Americans who use insulin to treat diabetes, and advertised that a 10-milliliter bottle would sell for $30.

NOVO NORDISK WILL REDUCE INSULIN PRICES BY 75%

Many questions remain as California and Civica work to locate a manufacturing facility in the state, the Associated Press reported, adding that regulatory approvals will be required.

There are concerns about government entry into the market, as some competitors are worried that it will lower their prices and the state will lower the price of branded insulin or reduce the availability of their drugs.

“Is this perfect? ​​We don’t know yet,” Newsom said at one point.

The announcement comes days after major manufacturer Novo Nordisk announced it would cut insulin prices by up to 75% from 2024. Less than two weeks ago, competitor Eli Lilly also said it would immediately cover out-of-pocket insulin costs in 2024. It announced plans to cut the price of its most commonly prescribed insulin by $35 for patients and by 70%.

President Joe Biden also made a commitment to focus on reducing healthcare costs, particularly the price of insulin. Legislation that went into effect in 2022 limited Medicare beneficiaries to $35 a month for additional payment for medication, and Biden suggested that this cap be extended to all Americans.

ELI LILLY COVERS OUT-O-PO-COSTS FOR IMMEDIATE-ACTING INSULIN

Thousands of doses of insulin are stored in a Kaiser warehouse in Downey, California, on Saturday, March 18, 2023. (AP Photo/Damian Dovarganes)

Anthony Wright, executive director of the statewide consumer health advocacy group Health Access California, celebrated Newsom’s announcement and said efforts to develop a competing generic could sway insulin manufacturers to lower prices—but acknowledged that there will be hurdles.

“The work of developing a generic product, getting FDA approval, and setting up production will be real-time,” Wright said in an email to the AP. “There may be more time to get doctors to prescribe the drug, insurance companies and (pharmacy aid managers) to include it in their formulas and their patients, and the public accepting and wanting it.”

State lawmakers approved $100 million for the plan last summer, and $50 million is devoted to developing three types of insulin. The remaining money is set aside to invest in a manufacturing facility.

Despite the challenges of entering an existing competitive market, Newsom said taxpayers will have “very broad protection.” He added that “any provision” would allow the state to withdraw from the agreement if it was not beneficial.

California Governor Gavin Newsom, left, after announcing a partnership with Civica Rx, a nonprofit pharmaceutical company that aims to produce insulin for the State, California Department of Health and Human Services Secretary Dr. Talking to Mark Ghaly. (AP Photo/Damian Dovarganes)

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The product isn’t expected to hit store shelves until at least next year.

State-branded insulin can save many patients between $2,000 and $4,000 per year, according to state documents obtained by the AP. Lower costs can also save money for the government because the government purchases the product each year for the millions of residents of publicly funded health plans.

The Associated Press contributed to this report.