California, partnering with drugmakers to make affordable insulin

DOWNEY, Calif. (AP) — The state of California and a generic-drug maker on Saturday announced a 10-year partnership to produce affordable state-branded insulin that they hope will compete with long-time manufacturers and drive down prices on a drug Used by millions of Americans.

The product isn’t expected to hit store shelves until next year at the earliest, and it was hard to predict what impact it would have in an already changing market. Earlier this week, another major insulin maker promised steep price cuts as pressure mounts on drugmakers and insurers to slash the drug’s cost.

Democratic Gov. Gavin Newsom said he hopes California’s rise as an insulin maker will bring prices down. Research has shown that prices for the drug have more than tripled over the past few decades.

“We intend to do this through market disruption,” Newsom said at a ceremony announcing the pact at a pharmaceutical warehouse near Los Angeles. He called it “a game changer” for the 8 million Americans who use insulin to treat diabetes.

Many questions remain. The state and its partner, the nonprofit Civica, have yet to find a manufacturing facility in California. Official permits are required. Newsom said a 10-mL bottle of the state’s insulin would sell for $30, but it’s possible competitors could lower their prices and undercut the state’s product.

“Is that perfect? We don’t know yet,” Newsom admitted at one point.

Just days ago, President Joe Biden said his administration was “intensely focused” on cutting health care costs, including pressuring drug companies to lower the cost of insulin. Legislation passed last year capped insulin co-payments at $35 per month for Medicare beneficiaries. Biden has proposed extending that cap to all Americans.

Novo Nordisk announced on Tuesday that it will cut some of its U.S. insulin prices by as much as 75% starting next year. The announcement comes less than two weeks after rival Eli Lilly said it would slash some of its prices by 70% or more later this year.

Anthony Wright, executive director of Health Access California, a statewide consumer health advocacy group, welcomed Newsom’s announcement and said efforts by California and others to develop a competing generic drug are likely a factor in leading insulin makers to lower their prices .

Still, there are obstacles.

“The work to develop a generic drug, get FDA approval, and set up manufacturing is going to take a long time,” Wright said in an email. “There may be even more time to get doctors to prescribe the drug, insurers and (pharmacy benefit managers) to include it in their prescriptions, and patients and the public to accept it and ask for it.”

There could be other risks. State analysts have warned that California’s entry into the market could prompt other manufacturers to reduce the availability of their drugs, with a possible unintended consequence.

State legislatures approved $100 million for the project last year, with $50 million earmarked for the development of three types of insulin and the remainder earmarked for investment in a manufacturing facility.

Despite the challenges of entering a competitive, established market, Newsom said taxpayers would have “very comprehensive protections.”

If for some reason the deal doesn’t work out in the state’s favor, “there are all sorts of provisions that would allow us to … get out,” he said.

According to state documents, the proposed program could save many patients between $2,000 and $4,000 a year. Additionally, lower costs could translate into significant savings as the state buys the product for the millions of people in its publicly funded health plans each year.

The state is also exploring the possibility of bringing other drugs to market, including the overdose drug naloxone. The drug, which is available as a nasal spray and in injectable form, is believed to be a key tool in the fight against a nationwide drug overdose crisis.

“We don’t stop there,” Newsom said.

Michael R Blood, The Associated Press


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