California To Make Its Own, Low-Cost Insulin, Newsom Says

SACRAMENTO, CA — California will make its own insulin, Gov. Gavin Newsom said Thursday, declaring that its current high-cost "epitomizes market failures."

The life-saving hormone is often used to treat diabetes and costs between $300-$500 a month, Newsom said.

"California is taking matters into our own hands," the governor said in a video Thursday.

He later added: "Because in California, we know people should not go into debt to receive life-saving medication."

The state budget signed by the governor sets aside $100 million to contract and make insulin at a cheaper price that's closer to what it takes to make, Newsom said. The insulin will be available to everyone.

Newsom said $50 million will go toward developing insulin. The remaining $50 million will go toward a manufacturing facility based in California that will create high-paying jobs and a stable supply chain for insulin.

People with type 1 diabetes must take insulin several times a day because their pancreas doesn't make it. The drug helps control their blood glucose level. Some people with Type 2 diabetes also take insulin.

The drug is often administered using a needle and syringe, a pen, or a pump. When the pancreas doesn't make enough insulin, or it cannot be used effectively, sugar builds in the blood, which can lead to serious complications, such as heart disease, stroke, blindness, kidney failure, amputation of toes, feet, or limbs. Prior to the discovery of insulin treatment, type 1 diabetics usually died from the disease.

There were 23.1 million diagnosed cases of diabetes in the United States in 2015, according to the U.S. Centers for Disease Control and Prevention. An estimated additional 7.2 million people were undiagnosed, bringing the total to 30.3 million, or about 9.4 percent of the U.S. population.

According to Congressional Research Service, three firms — Eli Lilly, Novo Nordisk, Sanofi Aventis—account for over 90 percent of the global insulin market and make the entire insulin supply for diabetic patients in the United States. Insulin produced by the three companies are brand-name drugs, which cost more because the drug manufacturer has "free rein in setting the drug price due to a government sanctioned monopoly for a defined period of time."

Brand-drugs are protected from market competition by patents and a regulatory exclusivity period granted by the FDA.

"According to some analysts, lack of price competition in the U.S. insulin market is a contributor to the high cost of this vital drug," the research service said in a November 2018 paper.

A September 2018 study published in BMJ Global Health calculated that a year’s supply of human insulin could be $48 to $71 per person, and between $78 and $133 for analog insulin, the researchers said. This amount would cover production costs and still deliver a profit to the manufacturer.