Four years after Gov. Gavin Newsom signed an executive order vowing to reduce prescription drug costs in California, the state is bringing $30 insulin to Californians — and working to create its own overdose-reversing drug.
Newsom announced Saturday that California secured a $50 million contract with the nonprofit drug manufacturer Civica to sell insulin through the state’s generic drug label, CalRx, at just 10% of the typical cost for cash-paying patients. The products are expected to be available for purchase by early 2024, Newsom said.
“This is a game changer. This will fundamentally lower the cost — period, full stop,” Newsom said Saturday at a press briefing in Los Angeles. “… Something like this simply does not exist anywhere else and we are intent to make this about market disruption.”
The governor is hoping to build off this momentum to address another public health crisis — fentanyl overdoses. Newsom said the state is exploring the ability to manufacture its own overdose-reversing drug, Naloxone, which is sold under several brand names, including Narcan.
“As a parent, don’t think for a second that I don’t lose sleep over this,” Newsom said about the fentanyl crisis. “We are taking it very, very seriously.”
The announcements come amid rising public anger over both the nation’s opioid crisis and the exorbitant cost of life-saving drugs like insulin. Two of the world’s largest insulin manufacturers — Eli Lilly and Novo Nordisk — recently announced plans to drastically reduce the cost of their drugs after repeated calls from President Biden, lawmakers and advocates.
“This is really about changing the arc of the cost of health care for all Californians,” said Mark Ghaly, secretary of the California Health and Human Services Agency. “… Californians should be proud of the leadership of the governor and many, many around him who have said we’re not quitting on this.”
High Insulin Costs Hurt Diabetes Patients Who Need It
More than 30 million Americans are diagnosed with diabetes, which hinders the body’s ability to naturally produce insulin, leading to dangerous levels of blood sugar. Over 7 million people require insulin on a daily basis. Over the last decade, the cost has skyrocketed to a point where nearly 1 in 5 Americans with diabetes ration the life-saving drug, according to a recent study published in the Annals of Internal Medicine.
Kevin Wren knows first-hand the dangers of insulin rationing — when diabetics who can’t afford insulin cut back on their intake to make it last longer.
“You feel physically terrible — sick, lethargic, sleepy, really spacey,” Wren said. “It sucks.”
The Sacramento resident was diagnosed with Type 1 diabetes in 2001 at age 15. Thanks to his family’s robust health insurance, he didn’t have to worry about affording his medication or supplies throughout high school and college.
But after he graduated from Seattle University in 2008, Wren struggled for more than six months to find full-time work with benefits that would help him afford his life-saving medication.
“I was just trying to like, make it work and not die,”
Wren said. “It’s pay or die.” Wren volunteers as California chapter leader for Insulin 4 All through T1 International, a patient-led group that raises awareness about Type 1 diabetes and advocates for policies to benefit patients. He’s currently unemployed and on Medi-Cal, which covers all his costs associated with diabetes care. Wren estimates his supplies — including two different insulin types, glucose monitoring strips, and needles — cost upwards of $2,500 a month.
A generic alternative would benefit all diabetes patients, Wren said, but uninsured people who pay out-of-pocket or those with high deductibles would gain the greatest benefit.
California Reaches $100 Million Contract For Generic Insulin
The state budget passed last July set aside $100 million to produce a cheaper insulin product by cutting out drug makers and other companies that contribute to the elevated price tags. As part of the plan, $50 million was allocated for the development of low-cost insulin products, and the other $50 million was earmarked for the construction of a California-based manufacturing facility.
Civica, based in Utah, was awarded a 10-year, $50 million state contract to begin the manufacturing process. The California Health and Human Services Agency is still looking for a potential California-based production facility for future CalRx projects.
Under the contract, the price of a 10 mL vial of insulin will be capped at $30. A box of five 3 mL insulin pens will cost no more than $55. Out-of-pocket expenses for brand-name options run as high as $300 and $550 respectively, the statement said.
When the insulin is ready for purchase, insulin-dependent patients will be able to ask for the CalRx products at their pharmacies without a new prescription. CalRx plans to make insulin products comparable to the drugs Glargine, Aspart and Lispro, also known under their brand names of Lantus, Humalog, and Novolog, according to the release.
Shawndra Ashen, 57, of Sacramento, cheered the governor’s announcement.
Ashen, who was diagnosed with Type 1 diabetes at age 8, now has insurance that covers her insulin products but that wasn’t always the case. As a child, Ashen’s parents paid out-of-pocket for her medications. Then as a young adult, she went into thousands of dollars of debt for her medical needs.
“The greed of pharmaceutical companies is disgusting to me,” she said about alarmingly high costs for lifesaving drugs like insulin.
Having a cheaper alternative at the time would have likely made a big difference, Ashen said.
“I think it’s amazing,” she said. “I’m just so happy for everyone who’s going to be able to get what they need and not go into debt like that.”