In summary
Lawmakers have focused on the high cost of diabetes drugs. The announcement will make state-branded insulin available two years later than the governor originally promised.
Starting next year, Californians with diabetes will be able to purchase state-branded insulin at steeply reduced prices, Gov. Gavin Newsom announced today.
Long-acting insulin pens will be available at pharmacies for $11 per pen — or $55 for a five-pack — beginning Jan. 1. The pens are interchangeable with glargine, the generic alternative for Lantus, a once-a-day injection that regulates blood sugar. An equivalent amount of Lantus sells to pharmacies for more than $92, according to data compiled by the governor’s office, but consumers may pay a different price based on their insurance.
“California didn’t wait for the pharmaceutical industry to do the right thing — we took matters into our own hands,” Newsom said in a statement released at 3 a.m. Pacific time. “No Californian should ever have to ration insulin or go into debt to stay alive.”
The sale of insulin is part of the state’s CalRx initiative aimed at lowering prescription drug prices for Californians. Today’s announcement comes three years after Newsom announced the state would tackle the cost of insulin. The first vials of insulin will be for sale two years after the governor’s promised delivery date of 2024.
Newsom originally pledged that the state would spend $50 million to contract with Civica Rx, a nonprofit drug manufacturer headquartered in Utah. Civica will also sell the same insulin nationwide at the $55 price point. People with insurance may pay even less if their insurer offers coverage of this new insulin.
The state earmarked another $50 million to build a manufacturing plant in California. At a news conference Thursday, Newsom said the manufacturing plant is no longer moving forward. Instead the state will use that money to pursue other lower-cost drug priorities including supplying schools with inhalers starting next year.
Keeping insulin and other drugs affordable
Roughly 3.5 million Californians have diabetes, according to the American Diabetes Association.
Lawmakers at the state and federal level have focused in recent years on the high cost of insulin, a life-saving drug used by diabetics. Price caps set by the Biden administration in 2023 as well as public pressure have driven down the cost nationally, according to health economists.
In response, the three largest pharmaceutical manufacturers for insulin — Eli Lilly, Novo Nordisk and Sanofi — cut prices between 65% to 80% in 2024 and also offer discount programs to patients.
Liz Power, a spokesperson for Civica, said those programs can be complicated and difficult for patients to enroll in. The price for insulin sold through CalRx will be stable and transparent, she said.
“There are no rebates, there are no coupons, there’s no program that a person who needs insulin has to enroll in in order to get that price,” Power said.
The insulin will be supplied by Biocon Biologics while Civica seeks approval for new fast- and long-acting biosimilar insulins from the U.S. Food and Drug Administration. In January, CalMatters reported that the project had hit delays with the FDA and had yet to start clinical trials.
Newsom said the target date to complete clinical trials for a fast-acting insulin is next July.
Less than a week ago, the governor signed legislation capping out-of-pocket insurance costs for insulin at $35.
Elizabeth Landsberg, director of the Department of Health Care Access and Information that oversees CalRx, said multiple “complementary” strategies are needed to make prescription drugs more affordable for consumers. The new law capping monthly out-of-pocket insulin costs helps consumers who have high-quality insurance. People who are uninsured or who have plans with high deductibles may separately benefit from the cheaper CalRx insulin.
“If you have a high deductible, you may have to pay the full price, so $55 is going to be a huge savings for you,” Landsberg said.
The state’s ambitions extend beyond insulin. CalRx has made naloxone, a generic opioid overdose reversal medication, available for $22.50. The program is also exploring whether it can bring down costs for vaccines and weight loss medications like Ozempic and Wegovy, Landsberg added.
This story has been updated.
Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.
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