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

Governor Gavin Newsom announced a new $50 million contract with nonprofit generic drug maker Civica to produce insulin under the state’s label during a news conference Saturday in Downey.

Newsom originally declared his intention to produce generic drugs three years ago in an attempt to lower the cost of pharmaceuticals for Californians who struggle to pay for often lifesaving drugs. the deal with civic would provide the first pharmaceutical product manufactured under the CalRX generic drug brand.

Under the agreement, a 10-milliliter vial, which normally costs $300, would be available for the same $30 price it cost the state to manufacture and distribute the drug, according to the governor’s office. Newsom’s office said that as a result of such low prices, patients who pay out-of-pocket for insulin would save between $2,000 and $4,000 a year.

“This is a big deal, folks,” Newsom said. “This is not happening anywhere else in the United States.”

The governor and other officials said doing so would lower costs across the board, not just for the consumer who ultimately buys the drug. That makes it different, Newsom said, from recent announcements by drug companies about lowering insulin prices.

“Do not be fooled. These companies that suddenly jump on each other to rush in this direction, they only offer discount cards, ”he said. “Those costs are being assumed by the plans. Those costs are being socialized and passed on to everyone else.”

“What this does,” he said, “is a game changer. This fundamentally reduces the cost. Period. Final point.

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

California Health and Human Services Secretary Dr. Mark Ghaly said that under the agreement, Civica would commit to delivering as much insulin as California needs under the CalRx label. Civica said it would make the three insulins most commonly used by US citizens.

The governor said the state will switch to making its own naloxone, a drug that can save lives by reversing opioid overdoses. The state is exploring opportunities to produce the drug as part of its plan to combat the deadly effects of fentanyl, an especially potent synthetic opioid, Newsom said.

Newsom said state officials are investigating the production of both injectable and nasal naloxone, and wants to make it available without a prescription.

The governor touted the contract with Cívica on the third day of his State of the State political tour of California.

Newsom, who doesn’t like to read teleprompters because of his dyslexia, ditched the typical speech outlining his agenda to lawmakers at the state Capitol in exchange for a road show with policy announcements in Sacramento, the San Francisco Bay Area. Francisco, Los Angeles and San Diego through Sunday. .

He delivered his remarks Saturday in front of a bank of refrigerators filled with white boxes of insulin, in a simple pharmacy in Downey that is part of the Kaiser Permanente system.

Before speaking, Niketa Calame-Harris, chair of the American Diabetes Association’s Southern California Advocacy Committee, recounted her personal experiences with type 1 diabetes.

As a young adult, “there were many times where I was struggling, trying to come up with $100, $200 for a little vial of insulin that would literally keep me alive,” Calame-Harris said.

“I was once without insulin for only five hours, and I was in the ICU for two weeks.”

The contract marks a big step forward for Newsom and his quest to deliver on his promises to cut prescription drug costs, which have been slow to take off.

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

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

In a video posted to Twitter last summer, Newsom touted a $100 million budget allocation for the plan. He said that “$50 million will go toward developing low-cost insulin products and an additional $50 million will go toward a California-based insulin manufacturing facility.”

With US Food and Drug Administration approval, the contract announced Saturday is expected to deliver 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 provisions of which will take effect once the first delivery is made, Newsom said.

Ghaly said Saturday that the journey to produce insulin began with the question of how California could leverage its power as the nation’s most populous state to disrupt the pharmaceutical market.

The process took time because “this has been something we’ve been looking to get right,” Ghaly said.

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

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

Last year, Congress also passed the Reducing Inflation Act, which capped insulin copays at $35 per month for Medicare-covered patients effective January 1.

“I don’t want to exaggerate that this would be the only factor, but California and other competing insulin manufacturing efforts were a contributing factor in the decision by established insulin manufacturers to lower their prices,” Wright said.

California also followed other states in January in suing the nation’s three largest insulin makers over the high cost of the drug.

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

Although the Legislative Analyst’s Office has questioned the feasibility of Newsom’s plan, Wright said it makes sense for the state to continue down the path because it puts pressure on drugmakers to cut costs.

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