Gov. did. Gavin Newsom made lowering the cost of prescription drugs a signature health care issue, but over the weekend he rejected a bill that would have provided relief to diabetics by ending what they pay for insulin.
Their reasoning: California is already working on a separate effort to manufacture and distribute insulin at a cheaper price.
The problem is that the program has not yet started to produce the drug.
Senate Bill 90 by Sen. Scott Wiener, a Democrat from San Francisco, would have prohibited state-regulated health insurance plans from imposing a deductible on insulin prescriptions and would have limited copays to $35 for a 30-day supply. The current copay limit in California for most prescription drugs is $250.
Opponents of the bill, particularly the health insurance industry, argue that the approach will result in higher costs for Californians in the form of higher insurance premiums.
The underlying problem, according to insurers, is the price set by pharmaceutical companies. Currently, what people pay out of pocket is based on their insurance coverage. Uninsured people do not benefit from the copay limit and continue to pay the full price. Newsom echoed this in his veto message.
“Reducing the costs of prescription drugs, and insulin in particular, has long been one of my priorities,” Newsom said in his veto message. “With CalRx (the state’s prescription drug initiative), we get the basic cost, which is the real long-term solution to expensive drugs. However, with the copay caps, the long-term costs are passed on to consumers through higher health plan premiums.”
An independent analysis of the bill by a state health office estimated that consumer spending would increase by 0.02% due to higher annual insurance premiums. Meanwhile, the average insured beneficiary could have seen their prescription drop 67%, from $61 to $20.
The California Insulin Initiative
Through the CalRx Biosimilar Insulin Initiative, Newsom promised that insulin would cost no more than $30 per 10 ml vial or $55 for five 3 ml cartridges, which currently cost $300 and $500, respectively. The governor said the price reduction will apply to patients across the country, insured and uninsured.
In March, the governor announced a $50 million partnership with Civica Rx, a nonprofit made up of health systems and philanthropies, that will initially produce insulin in California from its manufacturing plant in Virginia. The plan is to build an insulin manufacturing plant in California.
Civica Rx is ready to manufacture three generic insulins (glargine, lispro, and aspart) that are interchangeable with the brands Lantus, Humalog, and Novolog.
So when is the cheapest insulin available in California? It is yet to be determined.
“At this time, we do not have a specific timeline for approval by the US Food and Drug Administration (FDA),” said Andrew DiLuccia, spokesman for the state’s Department of Health Information and Access, which oversees the insulin project. He noted that the development of insulin products requires clinical studies focused on safety, effectiveness and quality.
In an interview published last December in the Annals of Internal Medicine, Dr. Mark Ghaly, the state’s health secretary, said the goal is for California to have insulin on the shelves within two to three years.
Among the initiative’s possible challenges: sufficient funding to proceed. The initiative was launched last year when the state had a budget surplus. As California builds its program, it needs continued dollars to maintain it and counter any potential push from other insulin makers, according to an analysis published earlier this year in the Journal of the American Medical Association.
Insulin copay limits
The American Diabetes Association is pushing for caps on insulin copays across the country as a way to provide quick relief to diabetics. At least twenty-five states and the District of Columbia have enacted limits on insulin copays, ranging from $25 to $100 a month.
Wiener’s SB 90 would have introduced the federal government’s $35 cap on insulin prescriptions for people with Medicare, the health program for seniors and people with disabilities.
“The American Diabetes Association is disappointed by the governor’s decision to veto Senate Bill 90, legislation that had broad bipartisan support and passed the legislature without a single dissenting vote,” said Lisa Murdock, director of the association advocacy, bill sponsor. His organization will look for ways to continue working with the governor’s office on this issue of affordability, he added.
The diabetes association estimates that there are about 3 million diabetics in California.
The cost burden of insulin has a long history: Stories of people rationing their medications and relying on the emergency room for their uncontrolled diabetes are common across the country.
A national survey last year found that about 16.5% of insulin users ration their medications, often by delaying their purchases. Insulin rationing leads to poor diabetes control and is linked to increased cases of stroke, heart failure, and kidney failure.
This story was created with the support of the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, and at a price they can afford.