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In 2020, the California legislature set up CalRx, a signature program for Governor Gavin Newsom which he envisioned as a way to reduce ever-increasing health care costs by cutting Big Pharma out of the process. CalRx was finally funded in 2022, and by the next year the state had contracted a nonprofit manufacturer to produce long-acting insulin. After a couple years in development, CalRx has announced that starting in January they will be selling insulin pens to pharmacies for $45 per five-pack, who in turn will make the packs available to patients with a suggested retail price of no more than $55 a pack. What’s the comparison to packs offered by Big Pharma companies? Anywhere from $89 to $411. Big Pharma, working for the profits; Big Govt, working for the people.
Rx to the rescue: The insulin pens will be supplied through the CalRx program, an initiative launched under Newsom in which the state contracts with manufacturers to produce generic pharmaceuticals. The pens, which people with diabetes use to control the level of insulin in their bodies, will be the same as other long-acting insulin on the market. They will come with a suggested price for consumers of no more than $55 for a pack of five — a significant discount from current prices.
Doing the right thing: “California didn’t wait for the pharmaceutical industry to do the right thing — we took matters into our own hands,” Newsom said in a statement announcing the new drug. “No Californian should ever have to ration insulin or go into debt to stay alive — and I won’t stop until health care costs are crushed for everyone.” The announcement establishes California as the vanguard among states for ways to keep health care affordable in a system dominated by for-profit companies and underscores the Golden State’s ability to leverage the scale of its massive economy and buying power.
The scrooges making our medicine: The cost of insulin has come down since it was a major political issue in 2017 when the top manufacturers of the drug — Eli Lilly, Sanofi and Novo Nordisk — were accused in a class action lawsuit of dramatically raising prices each year. A prescription that had cost patients $25 had ballooned to $300, the lawsuit claimed, and politicians latched on to the issue as an example of the pharmaceutical industry run amok. In 2024, the federal government brought a suit against pharmacy middlemen, also accusing them of contributing to the ballooning cost of insulin.
A new deal: Under the CalRx deal, pharmacies in California will be able to purchase the 5-pack of insulin pens for $45 and sell them to patients at the suggested retail price of $55. Similar products from name brand companies cost pharmacies between $89 and $411, according to state figures.
Naloxone is next: Through CalRx, the state has also contracted to provide a cheaper version of the naloxone, which can reverse an opioid overdose. And earlier this year Newsom announced plans to work on bulk-purchasing asthma medication. He has also floated the idea of using CalRx to either produce or stockpile abortion medication.
Damn, between this and California recently banning loud ads on streaming platforms (ok, less life and death but still important!) I’m feeling downright nostalgic for my home state! As the fifth fourth largest economy in the world, this is exactly the kind of ballsy move California should be making. To paraphrase Newsom (to exaggerated effect), we’re all gonna die waiting for Big Pharma to do the right, humane thing. Even when it comes to lifesaving medicine. So that’s why we need government to advocate on our behalf rather than try to kill us.
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