California is starting a pharmaceutical company
Image: CalRx
Pfizer, Johnson & Johnson… and California? The state will invest $100M to set up the infrastructure to produce cheaper insulin under the label “CalRx.,” Gov. Gavin Newsom announced late last week.
📊 By the numbers… 8.4 million Americans with diabetes – or 2.5% of the US population – rely on insulin injections to survive. And peer-reviewed research from 2019 found that ¼ of those patients are skipping doses because they can’t afford regular treatment.
- In the US, insulin costs have tripled over the past decade to reach an average of ~$100 per unit – nearly five times the price in Chile, which ranked second among the 34 countries analyzed by the nonprofit Rand Corporation.
- Currently, just three firms account for 90%+ of the global insulin market (Eli Lilly, Novo Nordisk, and Sanofi Aventis).
- These companies also produce the US’ entire insulin supply. Per a 2018 Congressional Research Service report, this means insulin is largely protected from generic competition that often makes drugs less expensive.
📝🏛 Zoom out: A Democrat-led bill that would cap insulin prices at the federal level passed the House in March, but it’s unclear if it’ll make headway in the evenly-divided Senate.
- Since 2019, eight states – CO, IL, ME, NM, NY, UT, WA, and WV – have enacted measures capping the price of insulin at or below $100 per unit, though none have gone so far as to produce their own.
+Flash poll: What do you think of California’s move?
Take a 360° look at what the media is saying →
Sprinkles from the Left
- Some commentators applaud California’s new insulin program, expressing hope that their effort will disrupt the pharmaceutical marketplace, which is rife with anti-competitive practices.
- Others express support for Democrat-led efforts to cap the price of insulin at $35 per unit on a federal level in concert with privately-financed efforts to create generic brands of insulin at a cheaper price point than existing options.
- “The Senate’s plan on insulin drugs is the wrong way to solve the affordability problem” –Richard G. Frank, Ph.D., & Marta E. Wosińska, Ph.D., Brookings Institution
- “Here’s One Good Way to Lower the Cost of Insulin” –Lisa Jarvis, Bloomberg
- “California can undercut drugmakers' high insulin prices” –The Press Democrat Editorial Board
- “We need affordable insulin” –The Daily Star Editorial Board
Sprinkles from the Right
- Some commentators call the Democrat-led bill to cap insulin prices a phony solution to the problem, arguing that insurance providers would raise premiums for everyone if the caps are enacted into law.
- Others call out the actions of pharmacy benefit managers – aka middlemen that negotiate drug prices for insurers, and often own insurance companies – as one of the main reasons insulin prices have spiked over the past decade.
- “Insulin shortage might be next supply chain crisis” –Dr. Marc Siegel, Fox News
- “Democrats' Heads Are In The Clouds When It Comes To Lowering Drug Prices” –Rep. Buddy Carter (R-GA)
- “Injecting Some Insulin Reality” –WSJ Editorial Board
- “Price controls on drugs will create more inflation” –Brian McNicoll, Washington Times
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