California Will Offer Deeply Discounted Insulin in January

Californians will be able to buy deeply discounted insulin from the state starting in January, under the new state-run drug label, CalRx, a first-in-the-nation effort that bypasses pharmaceutical companies and intermediaries to make generic drugs more affordable.

The state will sell five-packs of insulin pens to pharmacies with a suggested retail price of no more than $55, or $11 per pen, a dramatic reduction from current market prices, which range from $88 to $411.

“California didn’t wait for the pharmaceutical industry to do the right thing – we took matters into our own hands,” Gov. Gavin Newsom said in a statement on Thursday, announcing the fulfillment of a promise he made back in 2020. “No Californian should ever have to ration insulin or go into debt to stay alive, and I won’t stop until health care costs are crushed for everyone.”

The move is a bold and direct challenge to the top three insulin manufacturers in the U.S. — Eli Lilly, Sanofi and Novo Nordisk — who control 90% of the market and whom Newsom accused of price gouging consumers for years. In addition to the lower cost, the CalRx-branded insulin brings an unprecedented level of transparency to an industry shrouded in secrecy and best by backroom deals with intermediaries. Each vial will have a QR code that links to the $55 maximum price, so consumers will know exactly how much their health plan or pharmacy has added on top.

“This is really disruptive,” said Mariana Socal, a health policy professor at Johns Hopkins University. “This is bringing real competition to the market. It’s really opening up new possibilities for patients and plans.”

Her research shows that health insurers could provide the CalRx insulin to patients for $0 in cost sharing or copays and still save money and according to Newsom, Blue Shield of California has already added CalRx insulin to its formulary. For patients with high-deductible plans or no insurance, buying state insulin directly from the pharmacy could save up to $4,000 per year.

For the 3.5 million Californians who have diabetes, CalRx insulin could have a material impact not just on their wallets, but their health, too. Many patients say they have had to ration insulin because of the high cost, or choose between their medication or groceries. Being without insulin for even a short time can have dire health consequences.

“I was once out of insulin for five hours, and that put me in the ICU for two weeks,” said Niketa Calame-Harris, who has Type 1 diabetes. She said she now has neuropathy, or nerve pain, and gastroparesis, a digestive condition that causes nausea and abdominal pain, as a result of having limited access to insulin earlier in her life. “Seeing the dollar signs drop in front of insulin costs, which is literally the vial of life for millions of children and adults living with diabetes, gives me hope in humanity.”

When Chris Noble worked as a counselor at a summer camp for kids with Type 1 diabetes in his early twenties, he relied on the insulin leftover at the end of the summer to tide him over between jobs.

“I just wasn’t making money to be able to shell out hundreds of dollars every two weeks for my insulin,” he said. Now that he has insurance, he’s relieved to have CalRx as a backup. “Let’s say I forget a vial at home or a vial breaks, the clock starts ticking until I start feeling symptoms. So just knowing that I can go to a retail pharmacy and purchase readily available, interchangeable insulin with a current prescription, that just makes my life so much less stressful.”

PhRMA, a trade group representing drug companies, did not comment directly on the CalRx insulin announcement except to say that it “simply adds to the drug manufacturers’ ongoing efforts” to help patients access and afford their insulin.

Insulin is the second drug to become available under the CalRx label, following the state’s release of naloxone, for reversing opioid overdoses, in a two-pack for $24, about half the market price. Albuterol inhalers for asthma are coming next, according to state officials, with Newsom also eyeing vaccines and GLP-1s for weight loss. The state also used CalRx to purchase a stockpile of the abortion medication, misoprostol, in 2023.

“The door is opened to the opportunity to significantly expand that portfolio,” Newsom said. “We’re open for business.”