California can cut high insulin prices from drugmakers
California has been talking for a few years about getting into the pharmaceutical sector. If Governor Gavin Newsom gets the funding he wants, the state could finally take the plunge.
Prescription drugs have become incredibly expensive over the years. People who are lucky enough to have strong insurance coverage through their employer might not notice it, but millions of Californians aren’t so lucky. They have high copays or, worse, have to pay the pharmacist themselves.
Nowhere has the problem been more evident than with insulin, which helps people with diabetes manage their health. The price of insulin today is nearly three times higher than it was just 10 years ago. A single bottle costs north of $300 without insurance.
The problem is so acute that the US Senate released an inquiry into the price of insulin earlier this year.
The pharmaceutical market is broken. A handful of major providers do not compete. On the contrary, they tend to raise prices in increments. Clients have little choice but to buy essential prescribed drugs like insulin, and insurance companies pass the costs but rarely the savings on to their clients.
About 4 million Californians have diabetes, and if they can’t afford insulin, their health issues can spiral out of control and end up costing insurers and healthcare infrastructure much more. state public. Unmanaged diabetes causes organ damage, blindness, and damage to the extremities that lead to amputation.
State leaders hope to reduce the cost of insulin by bypassing big pharma and making a lower-cost, state-branded generic version. In 2020, lawmakers passed and Newsom signed a bill to put the state on this path, but it was slow.
Now the Newsom administration thinks it’s close to finding a manufacturing partner, but it needs $100 million to make it happen. Legislators should provide the funds, but should also treat this as a pilot program with strong legislative oversight.
State-produced insulin could be a disruptor that resets prices or at least saves Californians money. The potential clientele is large enough to warrant lower prices. It could also be a more economical and realistic strategy than a single state trying to implement a single-payer healthcare system.
Success is far from guaranteed. Manufacturing is only part of the drug cost equation. Distributors and other intermediaries can have a significant effect on the final price of a medicine.
Californians might also wonder if the Newsom administration can strike a no-tender contract for production that actually saves money and delivers the product on time and as planned. Newsom’s record with no-bid contracts during the pandemic was spotty at best. It’s hard to ensure the best results and transparency when multiple vendors aren’t offering their best deals.
Even if Newsom signs a contract soon, it will be a year or two before the first vials of California-branded insulin go on sale.
In the grand scheme of the state budget, which shows a $100 billion surplus this year, $100 million is a small price to pay for a pilot program that could pay huge health and financial dividends to millions. of Californians.
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