Compared with the status before the price cuts, the goal of offering a generic much cheaper than that sold by so-called Big Pharma may be much harder to realize, commentators say. What’s more, the California plan, in the first stage, at least, would be effectively limited to residents of the state.

Last week, Governor Gavin Newsom announced that California had awarded a $50 million contract to nonprofit Civica to manufacture low-cost insulin under a project called the CalRx Biosimilar Insulin Initiative.

CalRx would set recommended maximum retail prices of $30 for a 10-milliliter insulin vial and $55 for a set of five prefilled 3-milliliter pens, not substantially cheaper than the new prices promised by the big brands.

The biosimilars are expected to be comparable to the branded products, including Eli Lilly’s Humalog, Novo Nordisk’s NovoLog and Sanofi’s Lantus. The three drugmakers control an estimated 90% of the US market.

As part of a 10-year deal with the state, Civica — founded in 2018 by a collective of health systems seeking to ease chronic US drug shortages –  has agreed to develop and produce the biosimilars at a new plant in Petersburg, Virginia, if its application to the US Food and Drug Administration is approved by 2024.  

Half of the $100 million budget would go toward establishing a California-based production facility.

Some pharma market watchers say they doubt the California plans would have a major impact, anyway as drugmakers’ deals with retail outlets such as Walmart already have the potential to bring prices down.

Before the cuts, several US states, including California, filed suit against the major manufacturers as well as pharmacy benefit managers that negotiate discounts off list prices on behalf of insurers for a cut of the savings, charging price gouging.

Under California’s generic drugs plan, benefit managers would be prohibited from profiting off such rebates, as this is seen as driving prices even higher.

Author: Dede Williams, Freelance Journalist