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California governor says the state will make its own insulin

A $100 million budget item aimed at lowering costs for patients raises several questions

by Rick Mullin
July 11, 2022

A photo of a person turning the knob of an insulin pen.
Credit: Shutterstock
A person turns the knob of an insulin pen. According to the US Centers for Disease Control and Prevention, the number of adults diagnosed with diabetes has more than doubled over the past 20 years.

Responding to the high cost of insulin, the state of California has allocated $100 million to begin producing its own. Announcing the plan on Twitter, Governor Gavin Newsom said making insulin will fulfill his earlier promise that the state will begin manufacturing prescription drugs.

The recently-signed state budget establishes the funds “so that we can contract and make our own insulin at a cheaper price, close to at cost, and to make it available to all,” Newsom said in a video. Half the funds will go to procuring low-cost insulin products. The rest will be invested in a California-based insulin manufacturing facility. No details were given on the location of the facility, the timetable, or the source of bulk insulin, often called drug substance.

GoodRx, a healthcare research website, estimates that the average US retail price for insulin rose 54% from 2014 to 2019. It subsequently dropped 5% after the US Food and Drug Administration approved generic alternatives to insulin. More than 37 million Americans have diabetes, according the US Centers for Disease Control and Prevention.

President Biden identified insulin pricing as a priority in his State of the Union address in March just prior to passage in the US House of Representatives bill that would cap insulin prices at either $35 a month or 25% of an insurance plan’s negotiated price, whichever is lower. A bipartisan group of senators introduced a similar bill last month.

In a statement responding to the California announcement, the insulin producer Eli Lilly and Company says all diabetes patients in the US can obtain Lilly insulin for $35 or less regardless of insurance status. “Lilly believes in marketplace competition which is an important driver of innovation and affordable access,” the statement reads.

The California news follows an announcement earlier this year from Civica Rx, a nonprofit launched in 2018 to address drug shortages in the US, that it will begin manufacturing generic, or biosimilar, insulin at an injectable drug plant in Petersburg, Virgina.

Civica says it plans to produce three generic insulins—glargine, lispro, and aspart—in vials and prefilled pens. Pricing to consumers will be no more than $30 per vial and $55 for five pen cartridges. The company will make finished drugs with drug substance supplied by GeneSys Biologics, an Indian producer, under a co-development agreement.

Allan Coukell, Civica’s senior vice president for public policy, says getting started in California would be an involved process. “The challenges for anyone developing insulin are the same,” he says. “It’s capital intensive to have the facility to manufacture the product. The timelines to develop the biosimilars is long, you have to have someone who makes the drug substance, and then you have to do the clinical trials.”

Civica said last month that the clinical trial specialist Profil will help it conduct trials.

Industry watchers have a lot of questions about the California plan. “As I understand the laws, as long as California makes [insulin] only for its own residents, and it is not shipped out of state, the FDA has no jurisdiction,” says James Bruno, head of Chemical and Pharmaceutical Solutions, in an e-mail to C&EN. “I would like to know where they are getting the technology to do this and are they going to use a site that is FDA controlled to do the formulation.”

Peter Bigelow, head of xCell Strategic Consulting, also sees regulatory concerns. “Theoretically, drugs that are not put into interstate commerce would be regulated by a state pharmacy board rather that the FDA,” he says in an email. “However, for something as complicated as insulin I think FDA would want to be involved. They could claim jurisdiction as long as one dose leaves the state, which is bound to happen.”

Bigelow also questions whether the state has the manufacturing capacity for filling syringes and injectable devices. He notes that Siegfried, a Swiss pharmaceutical services company, operates a sterile fill finish plant in Irvine, California.

But there may be other options, says Bernard Munos, a senior fellow at the Milken Institute and a former strategic advisor to Lilly. He points to several projects aimed at reducing the cost of insulin with small-scale facilities serving local communities. One, the Open Insulin Foundation, began work in Oakland, California, in 2015. “This is the way to go,” Munos says.

Responding to Lilly’s claim regarding the price of insulin, Munos says the major drug companies all have assistance programs, “but the qualifications are cumbersome, and they are clearly very picky about approving people for the channel. It exists, but it’s a bit theoretical and not enough to meet the need of people who cannot afford insulin.”


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