California Wants to Make Cheap Insulin. Here’s How It Could Work

Earlier this month, California governor Gavin Newsom announced that the state would produce its own insulin in an effort to combat rising prices. “Nothing epitomizes market failures more than the cost of insulin,” he said in a July 7 video posted on Twitter. “People should not go into debt to get life-saving medication.”

There are more than 30 million Americans with diabetes, and around 8 million of them take insulin, a hormone, to regulate their blood sugar. Americans who are uninsured or those who have high-deductible health plans may pay hundreds of dollars a month for insulin. In a 2019 study, around one in four users reported having to skip doses or use less of it than prescribed because of the cost.

Under Newsom’s plan, California would make insulins similar to currently available brand-name versions—known as biosimilars. State officials haven’t worked out exact cost targets, but Alex Stack, deputy communications director for the governor’s office, says patients can expect to pay anywhere from 47 to 95 percent less than what they currently do. (The savings will depend on a person’s insurance status.) “If we can do it, there’s no reason others can’t and still make money,” says Stack.

The plan would set aside $100 million of the state’s $308 billion budget for the effort. Initially, California will spend $50 million to acquire insulin from a manufacturing partner to get a product to the market as quickly as possible. Stack expects that to happen by the beginning of 2024. Eventually, the state will spend another $50 million to build a California-based manufacturing facility that will create what Newsom calls a “stronger supply chain.” While the state hasn’t worked out distribution details yet, Stack says the insulin it makes would be to anyone in the US, not just California residents.

California’s effort isn’t the only one aimed at lowering the cost of insulin. Civica, a nonprofit pharma company based in Utah, announced in March that it would manufacture and distribute its own low-cost insulin. The company plans to make biosimilar versions of the three insulins that account for most daily use in the United States—Lantus, Humalog, and Novolog—in both vials and pens. Civica is building a $140 million facility in Virginia, where it will manufacture the insulin, among other drugs.

Civica intends to limit its prices to $30 for a vial and $55 for a box of five pen cartridges. (How long this might last a person depends on factors like their weight, diet, and whether they have type 1 or type 2 diabetes.) “Our pricing is based on what it costs to manufacture and distribute the product, plus a small margin that makes production sustainable,” says Allan Coukell, Civica’s senior vice president of public policy.

Coukell says Civica will make its insulin widely available to drug stores across the US, including online ones. “We’ll make it available at any pharmacy that wants to purchase it and abides by our pricing policy, which is not to mark it up too much before it gets to the patient,” Coukell says.