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California expected to partner with nonprofit Civica Rx to produce its own low-cost insulin, sources say

It’ll be the first state to produce insulin for its residents, which experts see as a road map for other states to make the lifesaving medication more affordable.
Image: Gavin Newsom
California Gov. Gavin Newsom speaks in Sacramento on Tuesday after having won his second term.Rich Pedroncelli / AP

California plans to partner with Civica Rx, a nonprofit generic drug company, in the state's effort to produce its own low-cost insulin, according to two people familiar with the matter.

Gov. Gavin Newsom announced in July that he had approved a budget that would allocate $100 million to allow the state to begin making its own insulin. California could begin offering it in early 2024.

It'll be the first state to produce insulin for its residents, which experts see as a road map for other states to make the lifesaving medication more affordable.

A future in which insulin is produced by many public entities "is within the realm of possibility," said Dr. Adam Gaffney, a critical care physician at the Cambridge Health Alliance in Massachusetts.

Since the July announcement, details of the state's plan have been sparse.

At least $50 million of Newsom's budget would allow the state and its private partner to get insulin onto the state's market as quickly as possible and make sure residents can get access to it, the sources said. More than 3 million people in California have been diagnosed with diabetes, and thousands more may have it but don't know it, according to the American Diabetes Association.

Civica Rx, a nonprofit company in Lehi, Utah, said in March that it plans to make and sell generic versions of insulin to consumers at no more than $30 per vial and no more than $55 for a box of five pen cartridges. 

In July, Newsom said Californians pay $300 to $500 a month out of pocket for insulin.

California expects to announce the partnership in mid-December, although it hasn't been finalized and the state could select a different company, the sources said.

Newsom's office declined to comment.

A Civica Rx spokesperson didn't confirm the plan but said the company would welcome "the opportunity to partner with California."

"We share a goal of quality, affordable insulin available to anyone who needs it," the spokesperson said.

In August, President Joe Biden signed the Inflation Reduction Act, which will cap the monthly out-of-pocket cost of insulin at $35 for those on Medicare starting next year; advocacy groups have criticized the legislation because the policy leaves out those on private insurance and the uninsured and it would not lower the list price of insulin.

A study published last month in the journal Annals of Internal Medicine found that over 1 million people in the U.S. with diabetes skipped, delayed or used less insulin than was needed to save money.

Young adults and the uninsured — those who will be left out of the Inflation Reduction Act's monthly insulin cap — were the most likely to ration their medication.

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