California Governor Gavin Newsom
California Gov. Gavin Newsom speaks at a news conference on June 24, 2022.Rich Pedroncelli/AP
  • The state will invest 100 million dollars to develop its own drug.

  • A cheaper version of the drug is the goal.

  • More than 3 million Californians have been diagnosed with diabetes.

In response to the rising cost of life-saving medication, the state of California will soon produce its own affordableinsulin.

He said that California was taking matters into its own hands.

—Gavin Newsom (@GavinNewsom) July 7, 2022

$100 million of the state's $308 billion 2022-23 budget will be used to create an affordable version of the drug.

"$50 million will go towards the development of low-costinsulin products and an additional $50 million will go towards a California-based manufacturing facility that will provide new, high-paying jobs and a stronger supply chain for the drug."

He said that the medication would be available at a cheaper price. It is not clear when production will start.

The Los Angeles Times reported in June that state health officials were in the middle of negotiations with a drug manufacturer. Production could begin in the next few years according to a person from the governor's office.

Some officials weren't sure if the savings could be passed on to the patients.

At a legislative hearing in May, Blanca Rubio, a Democrat representing the 48th district, said there was no guarantee that this could happen.

At the time, he said that hope is not a strategy. I don't know how this is going to happen.

There were "considerable uncertainties" surrounding the plan according to a senior fiscal and policy analyst.

"This is an area that hasn't been tested to the fullest extent," he said.

Getting approval from the FDA is one of the implementation obstacles that the state would have to overcome.

The price of the drug has been lowered by a few manufacturers. Semglee, a generic version of the drug, was only marginally reduced in price. It was less expensive than its competitor at $269.38.

Civica Rx, a nonprofit that produces generic drugs, has said that it plans to bring to market a cheaper version of the drug. The organization said in a press release that it expects to sell its version of the drug in the year 2024.

The state needs to make sure that California's interests are protected in the long run and that the price of the drug is kept low.

The state has full discretion with how to use the $100 million, which could make it difficult for the public to know how the money is being spent. He said that the state has indicated that it will implement safeguards, but it's up to them to decide what those are.

As the price of the drug increases and as many Americans are diagnosed with diabetes, the state of California wants to make its owninsulin in January.

Diabetes has become an "extreme financial burden" for many in the US according to a study done by Yale School of Medicine.

According to the study, 14.1% of Americans who useinsulin spent at least 40% of their income on the drug alone.

Over the past few decades, the price ofinsulin has gone up.

Humalog used to cost $21 per unit when it was first introduced. According to Kasia Lipska, the lead author of the study, it now costs 10 times as much.

In the last 10 years, the average price ofinsulin has more than doubled.

The average price for fast-actinginsulin was $113.39 per vial, according to a study by the RAND Corporation. The average patient will need at least two to three months of treatment.

The cost of diabetes is the epitome of market failures. Out-of-pocket costs for this life-saving drug can be as high as $500 a month.

The American Diabetes Association says that over 34 million people in the US have the disease. The association states that medical expenses are 2.3 times higher for people with diabetes.

Business Insider has an article on it.