Cheaper insulin will soon be available through California’s state prescription program

SACRAMENTO — In a challenge to the pharmaceutical industry, Gov. Gavin Newsom on Thursday announced a plan to offer $11 insulin pens through the state’s prescription program, far below market cost.

Beginning Jan. 1, consumers can purchase a five-pack of pens for a suggested price of $55, according to the governor’s office. The packs will be available to California pharmacies for $45.

California is the first state in the nation to sell its own brand of generic prescription drugs through its label, CalRx, as Newsom and other state leaders seek ways to drive down rising healthcare costs.

Appearing at Cedars Sinai Medical Center in Los Angeles, Newsom said he was proud of the state’s role in disrupting “Big Pharma” and its market hold on insulin and other prescription drugs.

Pharmaceutical companies “have been gouging you for years and years and years,” he said. “They’re also gouging Americans by five to 10 times what our European counterparts are currently paying.”

Insulin users without health insurance today can pay as much as $400 for five pens.

While major drug companies have recently cut prices on insulin, critics contend those cost savings are subsidized by other consumers.

Health-related groups, including the American Diabetes Assn., applauded the news.

“This is a huge deal,” said Chris Noble of Health Access California, a consumer advocacy group, and a member of the state’s advisory council for the insulin program.

Three major pharmaceutical companies — Eli Lilly, Novo Nordisk and Sanofi — are known for manufacturing insulin, Noble said.

“Now they have to compete with something that’s actually being offered at the cost of manufacture, rather than these astronomical profits,” said Noble.

Reid Porter, spokesperson for Pharmaceutical Research and Manufacturers of America, a group representing pharmaceutical companies, said that insulin manufacturers have long offered programs to help consumers access and afford the drug.

“These efforts, combined with California’s new [Senate Bill 41] will help patients save at the pharmacy counter,” said Porter, referencing the new law that regulates pharmacy benefit managers to guard against overpriced prescription drugs. The bill, signed by Newsom, was authored by Sen. Scott Wiener (D-San Francisco).

“Today’s CalRx announcement simply adds to drug manufacturers’ ongoing efforts,” Porter said.

Newsom, who vowed to be the “healthcare governor” during his campaign, in 2020 unveiled a proposal for California to make its own line of generic drugs.

Three years later, he announced a $50-million contract with the nonprofit generic drugmaker Civica to produce insulin under the state’s own label.

Earlier this year, the state began selling naloxone, a medication that blocks the effects of opioids, at below market prices.

At Thursday’s event in Los Angeles, Newsom, administration staff, and hospital officials packed into a small pharmacy room.

Some 8 million Americans and more than a million Californians depend on insulin every day, said Allan Coukell, government affairs and public policy officer at Civica.

The drug, insulin glargine, is a long-acting insulin that’s interchangeable with the brand Lantus, and will be available in California through CalRx. In the rest of the country, it will be offered as Civica insulin.

Also appearing with Newsom at the Cedars Sinai news conference was Grace Peng, 17, who described how her father and grandmother both spend well over $100 each month for insulin.

“I’ve seen how those costs can add up, the hesitation before refilling a prescription, the stress of balancing bills and the constant worry of what if it becomes too expensive one day,” said Peng, who attends Yorba Linda High School in Orange County.

“What we’re doing is creating a pattern interrupt,” Newsom said of the CalRx initiative, which he said was focused on lowering, not subsidizing, the cost of prescription drugs.

“This is significantly different than others have done to achieve lower costs because, again, we are taking out the middleman, and we are fundamentally reducing the cost for individuals, ultimately extending that to taxpayers themselves.”

California Health and Human Services Secretary Kim Johnson told reporters that CalRx is also looking at releasing vaccines and the GLP-1s, which regulate blood sugar levels and appetite and were popularized by the brand name drug Ozempic. Albuterol, which treats asthma, is already in the works, as is a plan to distribute diapers.

Earlier this week, Newsom signed Senate Bill 40, also authored by Wiener, capping insulin co-pays at $35 for the first time in California.

“This law ensures no family will be forced to choose between buying insulin and putting food on the table in California again,” said Wiener in a statement.