California's New $100 Million Plan to Make Insulin Cheaper: What You Need to Know

Medianews Group/east Bay Times Via Getty Images | Medianews Group | Getty Images

California will begin making its own low-cost insulin in an effort to make the essential diabetes treatment more affordable, Gov. Gavin Newsom announced on Thursday.

"Nothing epitomizes market failures more than the cost of insulin," the governor said in a video posted on Twitter, "Many Americans experience out-of-pocket costs anywhere from three hundred to five hundred dollars per month for this life-saving drug."

With a budget of $100 million, California plans to "contract and make our own insulin at a cheaper price, close to at cost, and to make it available to all," Newsom said. It's unclear exactly how inexpensive California's insulin will be or when the low-cost drugs will be available.

Insulin in the U.S. costs almost $100 per unit, on average. That's nearly four times the price in Chile, which has the second-highest prices among the 34 countries analyzed by the nonprofit Rand Corporation, at less than $25 per unit.

Currently, four in five Americans in need of insulin have incurred thousands of dollars in credit card debt to pay for the medication, according to a recent survey commissioned by health care organization CharityRx. The average debt among all survey participants was $9,000.

California's program will allot $50 million toward the development of cheaper insulin products and $50 million on an in-state insulin manufacturing facility, Newsom said, adding that the facility "will provide new, high-paying jobs and a stronger supply chain for the drugs."

It's unclear if any other states plan to follow suit. In March, the U.S. House of Representatives passed the Affordable Insulin Now Act, which would cap out-of-pocket insulin costs at $35 per month for Americans with private health insurance and the Medicare prescription drug benefit. The bill has yet to pass the Senate.

According to the Centers for Disease Control and Prevention, 37.3 million people in America have diabetes. California has a particularly high rate of new diabetes cases — mainly affecting minorities, the elderly, males and low-income individuals, according to the governor's office.

"California is now taking matters into our own hands," Newsom said. "Because in California, we know people should not go into debt to receive life-saving medication."

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