California to manufacture its own insulin, governor says

Dive Brief:

• California is preparing to produce its own supply of insulin in a move to lower costs and improve access for people with diabetes, Gov. Gavin Newsom announced last week. The state’s new budget, signed by the governor, allocates $100 million to develop and manufacture biosimilar insulin products for Californians.
• “Nothing epitomizes market failures more than the cost of insulin,” the governor said, citing a monthly $300 to $500 out-of-pocket expense for many Americans. “California is now taking matters into our own hands.”
• California’s initiative follows on the heels of a bipartisan bill introduced in the Senate that would cap monthly insulin co-pays for insured patients at $35, a limit supported by President Joe Biden. The Senate bill, known as the Improving Needed Safeguards for Users of Lifesaving Insulin Now, or INSULIN, Act, also would ensure prior authorization or other requirements could not be imposed to limit patient use.

Dive Insight:

Diabetes is one of the most expensive chronic conditions in the U.S., and one in three Americans is at risk of developing the disease in their lifetime, according to data compiled by the Centers for Disease Control and Prevention.

People enrolled in Medicare Part D spent almost $1 billion out of pocket on insulin in 2019, four times the amount spent in 2007, according to the Kaiser Family Foundation. The Health Care Cost Institute found nearly 9% of patients with private insurance paid an average of $403 per month for their insulin in 2019. One study determined that escalating costs for insulin have caused nearly 25% of patients to ration the medicine.

Concerned about skyrocketing insulin costs, 13 organizations, including the American Diabetes Association and the nonprofit JDRF, recently sent a letter to congressional leaders urging passage of the INSULIN Act, which is sponsored by Sens. Jeanne Shaheen, D-N.H., and Susan Collins, R-Maine.

The nonprofit Civica, which is backed by hospital systems, is also targeting insulin affordability, pledging to manufacture the first of three planned low-cost biosimilar versions by as soon as 2024. Civica said in March that it plans to limit its prices to $30 for a vial and $55 for a box of five pen cartridges.

California is joining these efforts with plans to make its own insulin. Newsom said half of the $100 million budgeted to produce insulin in the state would support development of low-cost insulin products, with the remaining $50 million going to fund a California-based insulin manufacturing facility that will create “new high-paying jobs and a stronger supply chain for the drug.”

The state plans to make the insulin available close to at cost, the governor said. “People should not go into debt to receive life-saving medication,” he said.

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