Newsom announces $50 million contract to create California’s own insulin brand

(Rich Pedroncelli/Associated Press)

Newsom announces $50 million contract to create California’s own insulin brand

California politics

Taryn Luna
Emily Alpert Reyes

March 18, 2023

government Gavin Newsom announced a new $50

million contract with the non-profit generic

medicine maker

Civica will produce insulin under its own state label at a press conference Saturday in Downey.

Newsom originally stated three years ago that he intended to produce generics


effort to lower the cost of pharmaceuticals for Californians struggling to afford often life-saving drugs. The deal with Civica

would provide the first pharmaceutical product made under the CalRX brand of generics.

Under the deal, a 10-milliliter bottle that normally costs $300 would be made available for the same $30 price it cost the state to manufacture and distribute the drug, the governor’s office said. Newsom’s office said that due to such heavily reduced prices, patients are paying out


bag for insulin would save between $2,000 and $4,000 annually.

“This is a big deal folks,” Newsom said. “This isn’t happening anywhere else in the United States.” The governor and other officials praised that this would reduce costs across the board, not just for the consumer who would eventually pick up the drug. That makes it different, Newsom said, from recent drug company announcements about cutting their insulin prices. Don’t be fooled. These companies that suddenly jump over each other to run in this direction only offer discount cards, he said. Those costs are borne by the plans. Those costs are socialized and passed on to everyone. What this does, he said, is a game changer. This fundamentally reduces costs. Period of time. Point.

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

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

The governor said that in addition to producing its own naloxone, the state will use a drug that could save lives by reversing opioid overdoses. The state is exploring options to manufacture 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 looking at the production of both injectable and nasally administered naloxone, and he wants it available over the counter. The governor

promoted the contract with Civica on the third day of its State of the State policy tour of California.

news sum,

who hates reading teleprompters because of his dyslexia, closed the typical speech outlining his agenda to lawmakers at the Capitol in exchange for a roadshow of policy announcements in Sacramento, the San Francisco Bay Area, Los Angeles and San Diego until and with Sunday.

He delivered his remarks Saturday in front of a bench of refrigerators filled with white boxes of insulin, in a humble 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 Association Assn. , shared her personal experiences with type 1 diabetes. As a young adult, I was often scrambling and trying to raise $100, $200 for a small bottle of insulin that would literally keep me alive, Calame-Harris said. I once went without insulin for five hours and spent two weeks in ICU.

The contract represents a major step forward for Newsom and his quest to fulfill his promises to reduce the cost of prescription drugs, which have been slow to take off.

Newsom first revealed his proposal for California to create its own line of generics in 2020 to increase competition in the generic drug market and lower prices for everyone.

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

In a video posted to Twitter last summer, Newsom hyped $100

million budget allocation for the plan. He said, “$50 million will go toward developing low-cost insulin products and another $50 million will go toward an insulin factory in California.”

With approval from the U.S. Food and Drug Administration, the contract announced Saturday is expected to supply 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 supply is made, Newsom said. Ghaly said Saturday the journey to produce insulin began with how California could leverage its power as the country’s most populous state to disrupt the pharmaceutical market. The process took time because “this was something we tried to do right,” Ghaly said.

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

Eli Lilly & Co. announced plans earlier this month to cut the price of its insulin products by as much as 70%. Novo Nordisk made a similar announcement this week to limit out-of-pocket costs and Sanofi followed suit on Thursday.

Last year, Congress also passed the Inflation Reduction Act, which limits insulin copays to $35 per month for patients covered by Medicare starting Jan. 1.

“I don’t want to exaggerate that this was the only factor, but California and other attempts to produce competitive insulin products contributed to that decision for the incumbent insulin manufacturers to lower their prices,” Wright said.

California also trailed other states in January and the South as the nation’s three largest insulin producers due to the high cost of the drug.

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

While the Legislative Analyst’s Office has questioned the feasibility of Newsom’s plan, Wright said it makes sense for the state to continue on the path it is on as it puts pressure

drug makers

reduce costs.

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


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