Newsom announces $50 million deal to manufacture California’s own brand of insulin

Governor Gavin Newsom announced a new $50 million contract with nonprofit generic drug maker Civica to produce insulin under the state’s own label at a Saturday press conference in Downey.

Newsom originally declared plans to produce generic drugs three years ago in an effort to reduce the cost of pharmaceuticals for Californians struggling to afford often life-saving drugs. The agreement with Civica would provide the first pharmaceutical product manufactured under the CalRX brand of generic drugs.

As part of the deal, a 10-milliliter bottle — normally costing $300 — would be made available for the same $30 it costs the state to manufacture and distribute the drug, according to the governor’s office. . Newsom’s office said that because of such heavily discounted prices, patients who pay for insulin out of pocket would save between $2,000 and $4,000 a year.

“It’s a big deal, folks,” Newsom said. “That doesn’t happen anywhere else in the United States.”

The governor and other officials touted it would cut costs across the board, not just for the consumer who would ultimately buy the drug. That makes it different, Newsom said, from recent announcements by drug companies about lowering their insulin prices.

“Make no mistake about it. These companies that all of a sudden are jumping on each other to rush in that direction – they’re just providing discount cards,” he said. “These costs are borne by the schemes. These costs are socialized and transferred to everyone else.

“What it does,” he said, “is a game-changer. This basically reduces the cost. Period. Complete stop.”

Californians could get CalRx generic insulin at a local pharmacy or by mail order without a new prescription, state officials said, and it would be available to everyone, regardless of their insurance plan. The next step is for Civica to identify a California-based manufacturing plant, according to the governor’s office.

California Health and Human Services Secretary Dr. Mark Ghaly said as part of the deal, Civica would commit to supplying as much insulin as California needs under the CalRx label. Civica said it would manufacture the three most common insulins used by US citizens.

The governor said the state would next turn to making its own naloxone — a drug that can save lives by reversing opioid overdoses. The state is exploring possibilities of producing the drug as part of its plan to combat the deadly effects of fentanyl, a particularly potent synthetic opioid, Newsom said.

Newsom said state officials are considering making injectable and nasally-delivered naloxone, and he wants it available over-the-counter.

The governor promoted the contract with Civica on day three of his state-of-the-state political tour of California.

Newsom, who dislikes reading teleprompters due to his dyslexia, ditched the typical speech outlining his agenda to state capitol lawmakers in exchange for a road show with political announcements in Sacramento, area the San Francisco Bay Area, Los Angeles and San Diego through Sunday. .

He delivered his remarks on Saturday to a bank of fridges full of white boxes of insulin, at a no-frills pharmacy in Downey that is part of the Kaiser Permanente system.

Before speaking, Niketa Calame-Harris, chair of the Southern California Advocacy Committee for the American Diabetes Assn., shared her personal experiences with type 1 diabetes.

As a young adult, “there were many times where I scrambled, trying to scrape together $100, $200 for a little vial of insulin that was literally going to keep me alive,” Calame-Harris said.

“I once went without insulin for just five hours – and was in intensive care for two weeks.”

The contract marks a major step forward for Newsom and its quest to deliver on its promises to cut prescription drug costs, which have been slow to get off the ground.

Newsom first unveiled its proposal for California to manufacture its own line of generic drugs in 2020 to increase competition in the generic drug market and lower prices for everyone.

The governor signed legislation that year to require the state to seek contracts to produce or distribute generic prescription drugs, including insulin.

In a video posted to Twitter last summer, Newsom announced a $100 million budget allocation for the plan. He said “$50 million will go towards the development of low-cost insulin products and an additional $50 million will go to a California-based insulin manufacturing facility.”

With approval from the U.S. Food and Drug Administration, the contract announced Saturday is expected to deliver insulin to California in 2024, Newsom said. Civica will begin manufacturing the drug later this year under a 10-year agreement with the state, the terms of which will take effect once the first shipment is made, Newsom said.

Ghaly said on Saturday that the journey to produce insulin began with the question of how California could harness its power as the nation’s most populous state to disrupt the pharmaceutical market.

The process took time because “it’s something we’ve been looking to do right,” Ghaly said.

Anthony Wright, executive director of Health Access California, said one could argue that California’s efforts have already had a significant impact.

Eli Lilly & Co. announced earlier this month plans to cut the price of its insulin products by up to 70%. Novo Nordisk made a similar announcement to cap personal spending this week and Sanofi followed suit on Thursday.

Last year, Congress also passed the Inflation Reduction Act, which capped insulin copayments at $35 per month for Medicare-covered patients beginning Jan. 1.

“I don’t want to overstate that would be the only factor, but California and other efforts to manufacture competing insulin products contributed to this decision by incumbent insulin manufacturers to lower their prices,” Wright said. .

California also followed other states in January and sued the nation’s three largest insulin makers over the drug’s high cost.

At a press conference Thursday announcing the lawsuit against Eli Lilly, Sanofi and Novo Nordisk, California Atty. General Rob Bonta said companies are finding ways to “aggressively raise” the price of insulin at the expense of many patients.

Although the Office of the Legislative Analyst questioned the feasibility of Newsom’s plan, Wright said it makes sense for the state to continue down the path as it pressures drugmakers to reduce the costs.

“If we don’t sell a single vial of insulin, but the price goes down, that saves money for our Medi-Cal program, for CalPERS, and for all the means we buy for millions of Californians,” a he declared.