Gov. Gavin Newsom’s initiative to create affordable generic insulin for California’s 3.2 million diabetes patients is experiencing significant delays, according to industry analysts. The nonprofit drug manufacturer Civica, Inc., which has been contracted to produce the insulin, has yet to kick off clinical trials or request approval from the Food and Drug Administration (FDA). Both processes could take over a year to finalize.
In his 2023 State of the State address, Newsom initially projected that California would start selling insulin at the reduced price of $30 per vial by 2024, contingent on FDA approval. However, this timeline now appears unrealistic, with experts estimating that a market-ready product might still be several years away. “The timeframe could range from twelve months to up to three years for actual approval— assuming everything goes smoothly,” commented James Bruno, a consultant who specializes in pharmaceuticals.
A 2020 law designed to lower insulin costs facilitated Newsom’s negotiation of a decade-long, $50 million contract with Civica, along with an additional $50 million intended for establishing a manufacturing facility in California. Meanwhile, insulin prices have begun to decline nationally due to increased public scrutiny, a 2023 cap on costs for some seniors under Medicare, and new Medicaid regulations that tie drug prices to inflation. At least 25 states and Washington D.C. have also implemented monthly co-pay caps to alleviate ongoing financial pressures for diabetes patients.
California, however, is not one of those states. In October, Newsom vetoed a bill that proposed a $35 monthly cap on insulin co-payments, arguing that the state’s $100 million investment in insulin production was a more effective approach to reducing costs. He emphasized in his veto message that this method targets the root of high pharmaceutical costs, which would ultimately benefit consumers by avoiding higher health plan premiums that copay caps could generate.
A spokesperson for Newsom reaffirmed his commitment to making insulin more affordable but did not provide updates on the timeline for market availability or the amount spent on Civica’s milestones. “We are progressing with the process, though delays are not uncommon,” said Elana Ross. She added that both the administration and Civica are focusing on quality and pricing as primary objectives. Additionally, Ross did not address inquiries regarding the state’s plans for the manufacturing facility in California, with industry experts suggesting the budgeted $50 million would fall short for such an undertaking.
Allan Coukell, Civica’s chief government affairs officer, mentioned that while manufacturing has started at their new facility in Virginia, there is currently no forecast for when their first insulin product, a generic version of glargine, will be available. “We want to manage expectations carefully as we navigate through this process,” Coukell mentioned.
The journey to bring a drug to market, especially a biologic like insulin, can span multiple years. The FDA mandates that manufacturers thoroughly demonstrate the safety and replicability of both their processes and their products. Data must confirm purity, potency, and stability, alongside extensive analytical and clinical testing to ensure the drug meets safety benchmarks equivalent to the original brand-name product.
The timeline can vary considerably; while some generic drugs have been brought to market relatively swiftly, the path for biologics tends to be more intricate. For instance, Semglee, the first interchangeable biosimilar insulin, was approved in 2021, four years after the initial application submission. Rezvoglar followed with approval a year after its application, and more time was needed for the FDA to grant it interchangeability status, enabling pharmacists to substitute it for Lantus without requiring a new prescription.
The time required for drug development and FDA approval is influenced by the manufacturer’s expertise and the quality of submitted data. David Gaugh, from the Association for Accessible Medicines, indicated that it typically takes between two to four years from development to market for a biosimilar. Although Civica is not a new entity in drug manufacturing—producing about 80 generic medications for hospitals—insulin represents its first venture into biosimilars. They had previously announced intentions to produce insulin by 2024 before partnering with California.
While expedited FDA reviews are possible for politically significant products like insulin, the minimum timeframe remains around six months according to industry standards. The FDA has not confirmed the status of any submitted applications but usually processes submissions within a 12-month timeframe, suggesting Newsom’s insulin initiative may be lagging more than a year behind his original timeline.
At the time of the Civica contract announcement, Newsom highlighted the project’s aim to disrupt existing market practices that contribute to high insulin prices by utilizing California’s purchasing power. “This is a significant move; it’s unprecedented in the U.S.,” he declared during his State of the State speech. Insulin prices have long exemplified failures in the healthcare market, with costs surging nearly 200% between 2012 and 2021, reaching $541 per month at its peak in 2019. The three leading insulin manufacturers—Eli Lilly, Novo Nordisk, and Sanofi—have announced cuts of 65% to 80% for 2024.
Former state senator Richard Pan, who previously sponsored the law allowing California to pursue the insulin initiative, acknowledged the project’s ambitious nature, emphasizing that his trust lay in the administration’s capacity to monitor progress. Meanwhile, some economists speculate that recent price cuts by major insulin manufacturers might deter newer entrants to the market, potentially undermining long-term affordability. Pan stated that California’s plan remains crucial should larger manufacturers push smaller competitors out of the market.
In addition to the insulin project, legislation initiated by Pan has also enabled the state to negotiate lower prices for naloxone, a critical drug for reversing opioid overdoses. Major manufacturers like Eli Lilly and Sanofi have also rolled out financial assistance programs to help limit out-of-pocket insulin costs, although benefit availability can vary by the specific type of insulin required. Following Newsom’s rejection of the co-pay cap bill, Senator Scott Wiener described the decision as a “substantial setback” for individuals with diabetes, lamenting that it would delay much-needed relief from soaring healthcare costs.
