California Governor Gavin Newsom (D) announced Thursday that the state will begin producing its own insulin, which lowers the price of an essential treatment that people with diabetes usually cost thousands of dollars of years to obtain.
The effort will make California the first state to manufacture its own medicine – a business long reserved for private pharmaceutical companies operating under lax government oversight.
“Nothing shows market failures more than the cost of insulin,” Newsom said in a video announcing the project. “Many Americans experience their own costs of $ 300 to $ 500 per month for this life-saving drug. California is now taking matters into its own hands. ”
The effort is part of the $ 308 billion state budget Newsom signed last week. It sets aside $ 100 million for insulin production contracts that will enable people with diabetes to obtain insulin “at a cheaper price, close to cost price,” the governor said. Half of the funding will be spent on developing low-cost insulin products and the other half will go to an insulin manufacturing facility in California.
“In California, we know that people should not be blamed for receiving life-saving medications,” Newsom said.
Newsom’s administration earlier said relying on insulin could reduce insurers’ spending on treatment by 70 percent, the Los Angeles Times reported last month. If everything goes according to plan, those savings will be passed on to consumers.
For people without diabetes, the pancreas can create insulin, an essential hormone that helps the body use or store the glucose it receives from food. But diabetes disrupts that process.
For the 1.6 million Americans with type 1 diabetes, their pancreas stops making insulin, and they have to be injected with a manufactured version of the hormone to stay alive. Type 2 diabetes is much more common and affects 35.4 million Americans. While their pancreas still makes insulin, their bodies do not always respond well to it, and in some cases they may need the hormone injections.
The price of the four most prescribed insulins has tripled in the last decade. Experts attribute this to the United States’ free market approach to pharmaceutical products in which pharmaceutical companies negotiate prices with private insurers. But Medicare, the state-sponsored insurance for people 65 and older, the largest buyer of drugs in the US, is not allowed to negotiate on costs.
Pharmaceutical companies have attributed the rising price of insulin to the cost of developing better versions of the treatment, but many medical experts say the improvements the companies are making are incremental and out of step with the price increases.
Although California will be the first to pursue its own insulin production, it is not the first to address the price issue. Colorado Governor Jared Polis (D) last year signed a bill limiting insulin prices to $ 100 a month for anyone with a prescription, no matter how much insulin a person needs. Democrats in Congress also introduced legislation, with the House approving a $ 35-month monthly insulin price limit. However, the proposal will only affect people with insurance, and Democrats will need at least 10 Republicans to get on board for it to pass the Senate.