Civica Rx to Supply California's $30 Insulin

CalRx will offer biosimilars for Glargine, Aspart, and Lispro, which are expected to be interchangeable with Lantus, Humalog, and Novolog respectively.

California will contract with non-profit, generic drugmaker Civica Rx to supply the CalRx Biosimilar Insulin Initiative with $30 vials of the life-sustaining drug, Gov. Gavin Newsom says.

"California's partnership with Civica is a game changer," Newsom says. "Reducing the high cost of insulin is a critical step toward addressing health inequities and ensuring affordable and accessible healthcare for all."

CalRx will offer biosimilars for Glargine, Aspart, and Lispro, which are expected to be interchangeable with Lantus, Humalog, and Novolog respectively. The CalRx insulins will be made at Civica's 140,000 square-foot plant, under construction in Petersburg, VA.

"Diabetes has become an overwhelmingly expensive chronic condition," Civica President / CEO Ned McCoy says, "and it is heartbreaking that millions of people in California and across the U.S. are faced with the possibility of having to ration their care and put their lives at risk because they can no longer afford insulin."

Newsom says the new supply chain will lower the cost of insulin by about 90%, saving insulin users between $2,000 and $4,000 a year. Specifically, a 10mL vial will sell for no more than $30 (normally $300); and a box of 5 pre-filled 3mL pens will cost no more than $55 (normally more than $500).

No new prescriptions will be required, consumers can mail-order it, or pick it up at their local pharmacies, which will be required to order and stock the products, the state says.  

"With CalRx, and unlike private companies, we're getting at the underlying cost – the price is the price, and CalRx will prevent the egregious cost-shifting that happens in traditional pharmaceutical price games," Newsom says. "It'll cost us $30 to manufacture and distribute, and that's how much the consumer can buy it for. You don't need a voucher or coupon to access this price, and it's available to everybody regardless of insurance plan."

Drug makers say Newsom is barking up the wrong tree.

"If the governor wants to impact what patients pay for insulins and other medicines meaningfully, he should expand his focus to others in the system that often make patients pay more than they do for medicines," Reid Porter, senior director of state public affairs for PhRMA, told HealthLeaders. 

"For example, he could require these entities, including insurance companies and middlemen like pharmacy benefit managers, to share the average 84% in rebates they receive on insulin directly with patients at the pharmacy counter," Reid says. "Instead, he wants to score political points and villainize the industry responsible for making California a global leader in developing lifesaving treatments and cures and infusing more than $200 billion into the economy and supporting nearly 700,000 jobs."

In his first day in office in January 2019, Newsom signed an executive order mandating that California leverage its enormous buying power to negotiate lower prescription drug costs.

Civica is a nonprofit, 501(c)(4) organization founded in 2018 by health systems and philanthropies to increase the reliability of the drug supply chain, reduce drug shortages and related high prices in the United States.  To date, more than 55 health systems have joined Civica, representing more than 1,550 hospitals and one-third of all U.S. hospital beds.

The Civica deal comes just days after two of the nation's largest drug makers said they would slash the price of insulin.

On March 1, Indianapolis-based Eli Lilly and Co., the nation's largest insulin manufacturer, said it would immediately slash the cost of the drug by 70% and cap patient out-of-pocket costs at $35 or less per month.

"While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone and that needs to change," Lilly Chair and CEO David A. Ricks said.

On March 14, New Jersey-based Novo Nordisk Inc. followed suit, saying it would cut U.S. list prices of several insulin products by up to 75% for type 1 and type 2 diabetes, including both pre-filled pens and vials of basal (long-acting), bolus (short-acting) and pre-mix insulins, effective January 1, 2024.

In addition to the lowered insulin costs, Newsom says his administration's Master Plan to Tackle the Fentanyl Crisis is looking to bring to market low-cost versions of the opioid antagonist Naloxone.