Gov. Newsom Announces $30 Insulin Available Following Contract With Drug Maker

Governor Gavin Newsom announced this past weekend that California will make $30 insulin available for those who need it, with a 10 ml vial of insulin going down significantly from an average cost ranging from $175-$300.

Since the beginning of the decade, California lawmakers have attempted to lower the cost of prescription drugs within California. While the costs of prescription drugs can run high due to research and development costs, liability worries, and other factors, Newsom elected to skirt around those issues and propose a generic state-run prescription drug manufacturing facility in January 2020 to try and lower costs. This eventually found it’s way into bill form and was passed and signed into law by September 2020.

However, state officials began zeroing in on insulin the next year, as the cost of insulin became a hot-button issue nationwide in-part due to  COVID-19 related supply-chain issues causing the price to go up significantly. With one insulin vial going from costing $21 in 1999 to $332 in 2019, and most diabetics needing two or three a month, the growing costs were deemed significant. In 2022, Newsom earmarked $100 million for the state to begin producing cheap, generic insulin.

While the state began setting up manufacturing, they also went after the drug companies. In January, Attorney General Rob Bonta sued  insulin makers Eli Lilly, Sanofi and Novo Nordisk, as well as pharmacy benefit managers (PBMs) CVS Caremark, Express Scripts and OptumR over alleged violations of the state’s Unfair Competition Law and driving up the cost insulin severely in recent years. Bonta’s office pointed to studies in the suit, including one that found that one in four diabetics cannot afford insulin, and that insulin costs ten times more in the United States than other countries. Through the lawsuit, Bonta seeks to control insulin costs by promoting price competition for insulin and eliminating deceptive practices, as well as get restitution for Californians who paid higher costs for the drug.

This all led to the announcement made by Newsom over the weekend. Newsom said that CalRx had secured a contract with insulin-maker CIVICA to have $30 available in California. In addition, the Governor said that the state will soon be making their own version on Naloxone, a medicine also known as Narcan, that reverses opioid overdoses.

“People should not be forced to go into debt to get life saving prescriptions,” Newsom said in a press conference on Saturday. “Through CalRx, Californians will have access to some of the most inexpensive insulin available, helping them save thousands each year. But we’re not stopping there – California will seek to make our own Naloxone as part of our plan to fight the fentanyl crisis.”

NEW: California will be manufacturing some of America’s most affordable insulin.

The new CalRx insulin will be just $30.

It will be available to all Californians — and across the nation.

Next up: Manufacturing our own Naloxone.

— Gavin Newsom (@GavinNewsom) March 18, 2023

California Health and Human Services Secretary Mark Ghaly added, “To address the affordability crisis in California, we have to address the high cost of prescription drugs. The CalRx Biosimilar Insulin Initiative will benefit Californians who are today paying too much for a medication that we know is life saving and life altering.”

Experts note that many companies beat California to the punch in severely slashing insulin prices

According to the fact sheet released on Sunday, the price of insulin will subsequently go down by about 90%, saving cash-paying patients between $2,000 and $4,000 annually.

“With CalRx, and unlike private companies, we’re getting at the underlying cost – the price is the price, and CalRx will prevent the egregious cost-shifting that happens in traditional pharmaceutical price games,” the Governor’s office claimed. “It’ll cost us $30 to manufacture and distribute, and that’s how much the consumer can buy it for. You don’t need a voucher or coupon to access this price, and it’s available to everybody regardless of insurance plan. This is a crucial step in not just cutting the cost for the consumer, but cutting costs across the board in order to bring cheaper prescription drugs to all Californians.”

However, insulin and Naloxone manufacturing still face multiple issues in the state. There are no manufacturing facilities set up, with many critics noting that the $30 mark could be a hard price to keep, especially if supply shortages or issues flare up again.

“California has really overinflated the costs per vial,” explained Sage Thompson, a prescription drug supplier liaison, to the Globe on Monday. “Governor Newsom used $300 per vial and made it seem like that was the regular cost. But he just used the rare, worst-case cost. Generally it’s a lot cheaper than that. It’s not $30 cheap, granted, but it usually doesn’t get to $300 either, and when it does, everything has to go wrong to justify a higher cost.”

“A lot of drug makers have also been capping max prices per month for insulin. Only a few days ago, Sanofi made it $35 a month for insulin out of pocket in the U.S. California was late to the party on this one. They always tried to make it seem like they were ahead of the curve, but really, everyone else was rushing to make insulin cheaper, including drug companies themselves. The California CIVICA deal isn’t groundbreaking like Newsom is trying to claim. It’s just the latest company severely reducing costs.”

“You know, costs were super high for many, people spoke out, federal agencies stepped in, and costs went way down while also not screwing over the companies. In a nutshell, that’s what has happened. California isn’t really special here, although Newsom is making it sound like he is the white knight in all of this. As for the Naloxone, it makes sense to increase production and have it more readily available, but jeez, at least have a factory ready to go before you announce.”

As of Monday, no manufacturing center for the medicine in California has been announced