Calif., drugmaker, affordable insulin partner
DOWNEY, Calif. (AP) — The state of California and a generic drug maker announced Saturday a 10-year partnership to produce an affordable state brand of insulin that they hope will compete with long-established manufacturers and lower prices for the drug used by millions of people . Americans.
The product isn’t expected to hit store shelves until at least next year, and it was hard to predict what impact it would have on a market already shaken by the changes. Earlier this week, another major insulin maker promised sharp price cuts amid increasing pressure on drugmakers and insurers to lower drug costs.
Democratic Gov. Gavin Newsom expressed hope that California’s emergence as an insulin producer would lower prices. Studies have shown that drug prices have more than three times over the past couple of decades.
“We intend to make this a market disruption,” Newsom said at a ceremony announcing the deal 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, a non-profit organization civic, have yet to find a manufacturing facility in California. Regulatory approvals will be required. Newsom said a 10-milliliter vial of the government’s insulin will sell for $30, but it’s possible that competitors could lower prices and lower the cost of the government’s product.
“Is it perfect? “We don’t know yet,” Newsom admitted at one point.
Just a few days ago, President Joe Biden announced that his administration focused “intensely” to lower health care costs, including pressuring pharmaceutical companies to lower the cost of insulin. Legislation that last year capped the $35-a-month insulin copay for Medicare beneficiaries. Biden proposed extending this limit to all Americans.
This was announced by Novo Nordisk on Tuesday it will cut some US insulin prices will rise by up to 75% starting next year. The announcement comes less than two weeks after rival Eli Lilly said it would cut some prices by 70% or more this year.
Anthony Wright, executive director of Health Access California, a statewide consumer health advocacy group, welcomed Newsom’s announcement, saying efforts by California and others to develop competing generics are likely to be a factor in forcing insulin makers to lower prices.
Still there are obstacles.
“The work to develop a generic, obtain FDA approval and set up manufacturing will take real time,” Wright said in an email. “It may take longer to get doctors to prescribe the drug, insurers and (pharmacy managers) to put it on their formularies, and patients and the public to accept and ask for it.”
There may be other risks. State analysts warned that California’s entry into the market could prompt other manufacturers to reduce the availability of their drugs, which could be an unintended consequence.
State legislators $100 million approved for the project last year, with $50 million earmarked for the development of three types of insulin, with the rest earmarked for investment in manufacturing capacity.
Even with the challenges of entering a competitive, established market, Newsom said taxpayers will have “very broad protections.”
If, for whatever reason, the deal didn’t work out in the state’s favor, “there are all kinds of provisions that would allow us to … get out,” he said.
The proposed program could save many patients between $2,000 and $4,000 a year, according to state documents. In addition, lower costs can result in significant savings because the state purchases this product each year for millions of people who participate in public health plans.
The state is also exploring the possibility of bringing other drugs to the market, including drugs for overdose naloxone. The drug, available as a nasal spray and as an injection, is considered a key tool in the fight against the nationwide overdose crisis.
“We’re not resting on our laurels,” Newsom said.