California enters the ring of drug manufacturing. Could others follow?

Chris Noble’s life lasts as long as his insulin supply does.   

Living with diabetes means “my body no longer produces insulin,” Noble, organizing director at the consumer health advocacy coalition Health Access California, said. “I have to do hormone replacement therapy utilizing insulin injections or through an insulin pump to regulate my blood sugar levels throughout the day.” 

Every time an insulin shipment arrives at his house, “I see that insulin as the start of a clock ticking. Three months’ worth of insulin [is] three more months of life where I don’t have to worry about if I’m going to be able to access this essential medicine.”  

But not worrying is easier said than done for Noble. The price of insulin has increased drastically over the last few decades. A single vial in 1972 went for $9, but in recent years patients could pay upwards of $300 for a vial of insulin in some cases. One vial can last anywhere from two weeks to a month depending on a person’s need, Noble said.

People with diabetes, who make up about 11% of the U.S. population, “will go homeless before we give up our insulin. We will resort to not buying groceries before we give up our insulin,” Noble said. And that’s because, simply put, the hormone is "as essential as water.” 

As a result, many individuals start rationing their insulin if supplies begin dwindling before they can get a refill, he said. But doing so could be a death sentence. In 2017, for instance, a 26-year-old Minnesota man died after rationing his insulin. He did so because he was no longer covered by his mother’s plan, and his job didn’t offer insurance. Without coverage, he faced paying up to $1,300 for the drug, CBS News reported. His mother thought he could budget his remaining supply and pay for a new prescription when he could.

Insulin’s deadly price tag has been a concern for a number of states in recent years. Colorado was the first in 2019 to pass legislation capping insulin co-pays at $100 for a 30-day supply. Since then, more than 20 states and the District of Columbia have introduced or passed laws to regulate the prices of insulin or insulin-related medical devices such as glucose monitoring equipment, according to the Council of State Governments. In 2023, 11 states so far have proposed such laws. 

California is the latest to adopt insulin co-pay price caps. The state legislature passed a bill unanimously earlier this month that, if signed into law by Gov. Gavin Newsom, would limit insulin costs at $35 for a monthly supply. 

“Co-pay caps are interesting pieces of legislation,” Noble said. “They are certainly helpful for people with high-deductible insurance plans, [but] there’s many folks that have either no deductible plans or no insurance at all.” In fact, nearly 30% of Americans with diabetes are uninsured, according to a 2022 study. 

“At a time when Medicaid enrollment is dropping across states, more people are vulnerable to being without health insurance, making this an issue of high priority for state policymakers to address,” Stephen Habbe, vice president of state government affairs for the American Diabetes Association, wrote in an email to Route Fifty. “Access to affordable and comprehensive health care … will help ensure people with diabetes can utilize the medications and tools that are required to better manage their disease so they can be healthier and lower their risk for poor outcomes.” 

That’s why California is going beyond price caps to tackle insulin prices with an ambitious plan to produce the drug itself. Earlier this year, Newsom announced that the state is partnering with drug manufacturer Civica to produce $30 insulin vials and $55 packs of prefilled insulin injection pens. The products will be available for insured and uninsured individuals, and no new prescription will be required to obtain the state-made drug. Pharmacies, however, must agree to order and stock the product. 

Civica will work with CalRx, a state-run prescription drug label, to develop and distribute biosimilar insulins—or products that are clinically similar and interchangeable with other insulin drugs—in the next few years. 

The CalRx version of insulin could help individuals with diabetes save approximately $100 million in health care spending across the state, experts say. Plus, the state itself could cut insulin costs as producing the drug independently would reduce California’s need to pay for patients’ insulin under the state’s Medicaid health care program, MediCal, Noble said. 

CalRx’s insulin initiative is supported by $100 million designated to the effort in last year’s state budget. The first $50 million will go toward insulin development. Civica, said Noble, has already entered the clinical trial phase. The process for approval from the U.S. Food and Drug Administration is expected to occur “sometime in 2024,” according to CalRx. 

Insulin under the CalRx label will be available for California residents, but “upon [FDA] approval, Civica intends to offer the insulin products nationwide,” under the company’s brand, Andrew DiLuccia, public information officer at the Department of Health Care Access and Information, wrote in an email to Route Fifty. 

The other half of the $100 million investment will fund the construction of an insulin manufacturing facility in California, as Civica’s manufacturing plant is located in Petersburg, Virginia. Bringing Civica to California “is a bit of an economic stimulus program,” Noble said. If Civica were to establish a plant in “an area that doesn’t have a lot of industry,” a new manufacturing facility could help create public sector job opportunities and “help bring some high-quality work back to California.” 

Insulin is CalRx’s first low-cost medication project. California also aims to manufacture other critical medications like naloxone to combat the fentanyl crisis.  

California is not the first state to produce its own drugs though. From 1970 to the late 1990s, the Michigan Department of Public Health manufactured an anthrax vaccine, until the state sold its facility to BioPort Corporation. More than 20 years later, state lawmakers are revisiting public production, this time for insulin. If passed, a bill introduced in July would make $150 million available for Michigan to partner with private organizations to establish an insulin manufacturing facility. 

Other states like Illinois and New York have also considered legislation to encourage affordable drug manufacturing. The bills aim to “increase competition, lower prices and address shortages in the market for generic prescription drugs.” 

“There’s a need for a public production push that ensures that these essential medicines are provided similar to a public utility,” Noble said.