California will start making its own insulin to combat high drug prices, governor says

California Gov. Gavin Newsom announced Thursday that he approved a budget that allocates $100 million for the state to create its own insulin, a response to extremely high prices for the life-saving medication that have made it inaccessible to some people with diabetes. 

"Nothing epitomizes market failures more than the cost of insulin," Newsom said in a tweeted video. "Many Americans experience out-of-pocket costs anywhere from $300 to $500 per month for this life-saving drug. California is now taking matters into our own hands." 

Newsom said $50 million will go to the development of low-cost insulin products, while the other $50 million will be used to create a California-based insulin manufacturing facility. He did not specify a time frame for the product or say exactly how much it would cost, though he noted that the state plans to make it "at a cheaper price, close to at-cost, and to make it available to all."  

Newsom is not the only lawmaker attempting to combat the price of insulin. In 2019, Colorado became the first state to cap insulin co-payments for people with private insurance; this year, the U.S. House passed a bill that would cap the monthly cost of insulin at $35 for people who are insured. 

The rising prices have been an issue for years, leading some to attempt to ration whatever insulin they can afford. In one instance, a 26-year-old man's family said he died after he tried to ration insulin and fell into a diabetic coma in his home. 

"You know, my son is not a statistic," his mother told CBS News in 2019. "He would be here if his life-saving medication was priced at a reasonable rate." 

Human Rights Watch said in April that the three drug companies that control the majority of the insulin market — Eli Lilly, Novo Nordisk and Sanofi — have all significantly raised the prices of their synthetic insulin in recent decades. 

"Almost every insulin-dependent person Human Rights Watch interviewed said they had rationed analog insulin because of out-of-pocket costs, taking it in ways not recommended by their physician in order to stretch their supply," the report noted. 

Responding to questions about the report from CBS News at the time, Novo Nordisk and Eli Lilly cited programs they had developed to lower costs for some people. 

Novo Nordisk said it has a patient assistance program that provides free insulin to some low- and middle-income people. The company noted that reform "will take time so we will continue to do what we can to help people who need us now." 

Eli Lilly said that the "average monthly out-of-pocket cost for Lilly insulin has decreased 44%, to $21.80, over the past five years," noting that it also has programs to help people facing higher costs. 

In:
• Gavin Newsom
• Diabetes
• California