Standing in front of refrigerators filled with boxes of insulin in a pharmacy in Southern California, Gov. Gavin Newsom revealed that the state has signed a contract with Civica Rx to produce its own insulin and sell it at an affordable price.
The $50 million investment will allow California to produce insulin to be sold at prices capped at $30 per vial and $55 for a box of five prefilled pens, Civica Rx said (PDF) in a release. The agreement is part of the state’s CalRx Biosimilar Insulin Initiative.
Utah-based Civica Rx is a nonprofit, social welfare manufacturer of generic drugs. Its aim is to ensure the reliability of supply chains and combat shortages and high prices.
It will take a while for the agreement to come to fruition. Civica Rx still needs to gain approval for its biosimilar versions of Sanofi’s Lantus (gargline), Eli Lilly’s Humalog (lispro) and Novo Nordisk’s Novolog (aspart).
The nonprofit plans to produce the treatments from its facility in Petersburg, Virginia, which is in the late stage of construction. The next phase of the partnership will be to identify a manufacturing site in California, Civica Rx said.
Newsom first revealed the program three years ago, with the state establishing its own CalRx brand of affordable generic products. Insulin would be the first product made under the brand. Because of the high cost of the lifesaving diabetes treatment, some patients have been forced to ration its use.
“This is a big deal, folks,” Newsom said Saturday. “This is not happening anywhere else in the United States.”
The timing of the announcement was interesting considering that in recent weeks, Lilly, Novo Nordisk and Sanofi each announced price caps and cuts of between 65% and 78% on their top-selling insulins.
California’s initiative is different, according to Newsom, as it would provide cost savings to the overall healthcare system, not just to the consumer.
“Don’t be misled,” Newsom said. “These companies that all of a sudden are jumping over each other to rush in this direction, they’re just providing discount cards. Those costs are being borne by the plans.”
The cost of insulin would be same for all patients regardless of their insurance situation, Newsom added.
The announcement comes two months after California sued the three major insulin makers, plus three dominant pharmacy benefit managers, for acting unlawfully to drive up the price of insulin.
As for Civica Rx, the nonprofit a year ago said it was teaming up with several companies including Kaiser Permanente, Intermountain Healthcare and Providence to manufacture and distribute generic glargine, lispro and aspart.