California wants to make its own insulin to reduce its high cost, it does

Sacramento – California wants to do what no other state has: make your own brand of generic insulin to sell at a discounted price to diabetics like Sabrina Cowdillo.

Cowdillo said he considered himself a “prisoner” of the three major pharmaceutical companies that control the price of insulin, which ranges from $ 300 to $ 400 per bottle without insurance. The price Cadillo paid in 2017, when he was diagnosed with diabetes, is engraved in his memory: $ 274.

“I cried a lot at CVS and realized I would stay that way for the rest of my life,” said Cowdillo, a 24-year-old college student living in La Puente, Southern California. You now have insurance that covers the full cost of important medications, but you are still struggling to pay for your insulin supply and your monthly plan premiums.

“The disease is very expensive and I can barely afford it every month,” Cowdillo said.

The administration of Governor Gavin News has noted that about 4 million Californians are infected with diabetes, a disease that can destroy organs, vision and, if not checked, can lead to amputation.

One in four people who have diabetes and are insulin dependent cannot afford it, forcing many to give rations or give up medication, the administration added.

Newsom is urging state lawmakers to invest $ 100 million in an ambitious initiative to launch California’s generic drug brand, CalRX, and begin making insulin in the next few years, Newscom spokesman Alex Stack said.

The state is also working to identify other generic drugs that could bring it to market, especially those that are more expensive or in short supply.

For starters, the goal is to reduce the price of insulin and make it available to “millions of Californians” through pharmacies, retail stores and mail orders, said Dr. Mark Ghali, secretary of the California Health and Human Services Agency.

But state health officials are still negotiating a deal with a drug manufacturer to produce and distribute insulin and have not answered key questions about how much they will pay patients.

To be successful, California and the companies that partner with it must navigate a complex pharmaceutical distribution system that relies not only on drug manufacturers, but also on intermediaries that work hand-in-hand with health insurers.

These companies, known as Pharmacy Benefit Managers (PBMs), negotiate with pharmaceutical companies on behalf of insurers to obtain discounts and discounts on medicines, but insurers do not always pass those savings on to customers.

“Insulin is an example of a long-running market failure in the pharmaceutical industry, which has kept the price of insulin so high,” Health Ministry Deputy Secretary Vishal Pagani told lawmakers in May. He argued that the higher prices “directly hit Californians.”

Newsom said in early May that state intervention was needed to end the price of monopoly drugs, and that California could do so because, with a population of 40 million, “it has market potential.”

But the Office of Nonprofit Law Analysts has questioned whether California can make its own drugs and achieve lower insulin prices. Luke Kaushamaro, a revenue and policy analyst at the office, warned in a legislative hearing in May that the effort could be hampered by a “significant uncertainty” shared by some democratic lawmakers.

The Newsom administration believes that some insurers can reduce their spending on state-produced insulin drugs by up to 70%, which is expected to be reduced for consumers. However, there is “no guarantee” that the administration’s predictions about dramatic savings or widespread distribution of insulin will be implemented, state representative Blanca Rubio (D-Baldwin Park) said at the hearing. “Who will write this magic insulin prescription?” I ask. “Hope is not a strategy. I can’t hear any strategy on how it will be available.”

Insulin prices have skyrocketed in recent years. A 2021 U.S. Senate investigation has revealed that the price of a long-acting insulin pen made by Novo Nordisk increased by 52% from 2014 to 2019 and the price of a Sanofi quick-acting pen by about 70%.

The investigation involved drug manufacturers and pharmacy facility managers, who said they had artificially inflated the price of insulin.

“Insulin makers have ignited skyrocketing price fuses by increasing matching prices step by step instead of competing for their reduction, while PBMs, acting as intermediaries for insurers, have ignited flames to get secret discounts and a large chunk of hidden fees.” Wyden (D-Oregon) said at the time of the report’s release.

When contacted by KHN, trade associations representing brand-name drug manufacturers, pharmacy benefit managers and California health insurers blame each other for the price increase.

Under Newsom’s plan, the generic form of insulin, known as “biosimilars” because they are made from living cells and mimic brand-name drugs on the market, will be widely available to Californians with and without insurance.

If lawmakers pass Newsm’s $ 100 million initiative this summer, the state will use that money to start supplying CalRx insulin to a deal with an established drug manufacturer, while the state builds its own manufacturing plant in partnership with a drug manufacturer.

The administration is currently negotiating with companies that could create a reliable supply of insulin under the no-bid agreement, but no partnership has been formally established. Insulin will be labeled with state-related images, such as “California Golden Bear.” And, Pegney says, labeling can boast that the state government provides patients with the lowest-cost insulin.

“Here is a short list of people who will even compete for it,” Ghali told KHN in May. “We’re going to host the competition and get a partner that we don’t think will deliver as soon as possible, but something that we think is sustainable.”

The final list includes Civica RX, a Utah-based nonprofit drug manufacturer. Civica independently announced in March that it was preparing to make biosimilar insulin, exactly what California wanted. Last year, the Food and Drug Administration (FDA) approved the first biosimilar exchangeable insulin product and plans to develop three types of generic insulin to compete with the brand-name versions produced by Civica Eli Lilly & Co., Sanofi and Novo Nordisk.

Alan Kukel, senior vice president of public policy at Civic, told KHN that the drug maker has held talks with the Newsom administration and other states.

Civic’s goal is to market insulin closer to production costs, but also to charge margins and make a profit, he said. The company plans to bring biosimilar insulin to the market for about $ 30 per bottle and $ 55 for a box of five pen cartridges, Kukel said.

Kukel acknowledged that Civica could work with pharmacy benefit managers to help health insurers determine which drugs to cover, which drugs to distribute, but he did not expect this to lead to a large price increase. “Our goal is to make these insulins available to any American who needs them,” Kukel said. “Our goal is to influence the market, not the market share.”

The state is in talks with other companies, including the well-known investor Mark Cuban’s for-profit pharmaceutical company, Mark Cuban Cost Plus Drug Company. The company is building its own plant like Civica, but for now it sells drugs online to anyone at 15% markup with wholesale price. Founder Dr. Alex Osmianski said the company’s negotiations with California had failed at first, but he would remain open for future discussions. The Cuban company’s chief investor, Oshmiansky, said.

“The United States is the richest country in human history, so it’s terrifying that our citizens can’t afford to buy drugs, including insulin, because of market manipulation,” Osmianski said.

For diabetics like Cowdillo, relief doesn’t come fast enough. He saves insulin if he can no longer afford health insurance and donates more to others if needed.

“I know how expensive it can be when you don’t have coverage, and if you’re not able to pay, you’re going to fight for your life in the hospital,” he said. “Your body breaks down and your limbs slowly shut down. It’s very painful. No diabetic has to go through this.”

Samantha Young, Senior KHN Correspondent, contributed to this article.

The story was produced by KHN, which publishes the California Healthline, an editorially independent service of the California Health Care Foundation.

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