California is attempting to become the first state to produce its own brand of insulin…
California is attempting to become the first state to produce its own brand of insulin and sell it at below market prices to Californians with diabetes. Currently, diabetic patients are at the mercy of three major pharmaceutical companies that produce insulin and control the price which ranges somewhere between $300 and $400 per vial. Five years ago, the price was $274 per vial.
The Newsom administration states that roughly 4 million Californians suffer from diabetes. One in 4 people with diabetes who rely on insulin cannot afford it, forcing many to ration the treatment or completely forego it, which can have deadly consequences.
Newsome is asking state lawmakers for $100 million to launch CalRx, an ambitious initiative to produce generic drugs. The hope is that CalRx will become functional and start producing insulin within a few years. State health officials behind the initiative have not yet secured a contract with a drug manufacturer to make and distribute insulin and are unable to answer key questions such as how cheaply the insulin would be to produce and what patients would pay for the insulin
Newsome believes that disrupting monopolistic drug prices requires state intervention and that California can lead the way because it has market power with 40 million residents. The Newsome administration believes that state made insulin could cut some insurers spending on the drug as much as 70%, and hope that savings would eventually trickle down to the consumer.
Opponents of the initiative feel that the Newsome administration has a lot of work to do before they vote to fund such a costly endeavor. There are too many unknowns, and they believe that the state should not enter into the drug making business. It seems that while this initiative has great intentions, like most bills in California the cart is in front of the horse on this one.