California may be the first state to develop its own generic drugs

California is poised to become the first state to develop its own line of generic drugs, raising drug prices and stepping into a competitive pharmaceutical market dominated by deeply competitive pharmaceutical companies.

The Democratic-controlled Legislature approved a measure on Monday that would direct the state’s top health agency to make or distribute a wide range of generic or biosimilar drugs to one or more pharmaceutical companies by January – including diabetes The drug contains insulin – which are inexpensive. Compared to brand-name products.

The bill, SB-852, also opens the door for California to manufacture its own generic drugs in the future.

Gov. Gavin Newsome will have until September 30 to take the measure or sign it.

“People need these drugs, but prices are through the roof, so we’re saying there’s a role for the state to bring prices down,” the bill’s author, Richard Sen. Pan (D-Sacramento) he said.

He said the measure is more important than ever, as COVID-19 exposed a “glaring gap” in the ability of public and private entities – including public hospitals and government drug buyers – to maintain adequate supplies of drugs, equipment and equipment Have done

Newsome, a Democrat, introduced his own generic drug proposal in January as part of his broader drug agenda to reduce pharmaceutical costs, but was forced to abandon his plan in May as he and lawmakers The budget of 54 billion had sought an epidemic-induced address.

Although it may take years to bring a new generic product to market in California, the move will put the nation’s largest state in direct competition with major generic and brand-name drug manufacturers. It can also help the state to use its huge purchasing power to reduce drug prices.

The Pharmaceutical Research and Manufacturers of America, which represents brand-name drug manufacturers, has taken a neutral position on the bill and declined to comment.

But Brett Michelin, lead lobbyist for the Washington, DC-based Assn. For Accessible Medicines, which represents generic-drug manufacturers, said their companies are not threatened by the prospect of entering the market in California – and even welcome it.

“Generic manufacturers are more than open to having such partnerships,” Michelin said. “I think the generic industry benefits greatly by having a fair and open process to sell drugs and compete for customers.

Under the measure, state-developed generics will be “widely” available to public and private buyers within California. Taxpayers will take advantage of the cost According to the state’s fiscal analysis, startup funding costs about $ 1 million to $ 2 million, plus ongoing staffing costs of tens of thousands to thousands annually.

It is not clear which drugs the state will manufacture or buy, although it will target the drugs that can generate the greatest cost savings for the state and consumers. But the bill specifically calls for “the production of at least one form of insulin, provided that a viable route to the creation of a more economical form of insulin exists at a price that results in savings.”

Insulin is a biological drug, which is made with living cells. Once a biologic arrives on the market, rival copycat products are followed by what are called biosimilars.

Three major pharmaceutical companies – Eli Lilly and Company, Sanofi and Novo Nordisk – have long controlled the lucrative insulin market in the US California, creating a biosimilar version of one of the new, fast and long-acting insulin The first unit will be. On a no-for-profit basis, Jane Horwath, a health policy adviser in Washington, DC, said

While it will be expensive and may take years, the Utah-based nonprofit pharmaceutical company Civix RX is discussing partnering with California to produce generic or biosimilar drugs. The company, which consulted with Pan on its bill, is already working on serious medicines with major health systems, including the Veteran Affairs Department, and low-cost for California’s Blue Shield and other insurers Is producing generics.

“There is no doubt that insulin would be a more complex and expensive drug to develop, but it is certainly possible,” said Alan Cockell, the company’s senior vice president of public policy.

Patients who require insulin face heavy cost spikes. The 2019 report by the Health Care Cost Institute concludes that the average price of insulin has doubled from 2012 to 2016. And California health insurance regulators found last year that diabetes medicines accounted for nine of the 25 most expensive brand-name drugs sold in the state.

“It’s a big deal – diabetes affects a lot of people who depend on insulin for their lives,” said Larry Leavitt, executive vice president of health policy at the Kaiser Family Foundation. “And insulin has likely been the poster child for inappropriate drug pricing.”

Laura Marstone, a Washington, D.C.-based attorney who advocates lower insulin prices with diabetes, said she is excited about the idea of ​​California.

He said that Marston has been on the same insulin, Hamalog, since 1996. It was priced at $ 21 per vial at the time, but has since exceeded $ 275 per vial, she said.

“If there was a low-cost option and the price was not going to increase, I would switch from Humlogog altogether,” she said. “I think these pharmaceutical companies have been completely taken hostage.”

Marston said she wants the federal government to do the same, “so it can apply to all patients.”

Congress’ efforts to deal with rising prices for insulin and other drugs faced opposition from the influential drug lobby last year. States have therefore increasingly looked for ways to regulate a for-profit industry in which brand-name manufacturers have monopoly power.

Colorado became the first state to cap the cost of pocket insulin at $ 100 for a 30-day supply last year. Then there were at least nine other states from New Mexico to New York, whose cost sharing caps change.

California had already paid pocket-drug costs of $ 250 to $ 500 for a 30-day supply, but a measure that would have halted the cap for insulin to at least $ 100 a month this year – an epidemic. Contingency of the short legislative calendar.

Newsome’s office declined to comment on the generic drug law. But the recent changes to the proposal reflect direct negotiations with the administration, Pan’s office said.

Newsom spokesman Jesse Melgar said in a statement that “the Governor’s goal of a sustainable system of universal coverage has not changed and affordable prescription drugs are another step toward that goal.”

Should Newsom sign the bill into law, the state Health and Human Services Agency may have the state build to identify a list of drugs for 18 months, with a report due by July 2022 to the legislature. By July next year, the state will need to assess whether it can manufacture its own generics and biosimilar.

The bill calls for state health officials to prioritize the development of generics for chronic and high-cost health conditions, and urges the production of those that can be distributed via mail order.

Levitt said California could emerge as a leader in the national drug debate.

“If California can shut it down, it will be a model for other states and the union,” he said. “Closing it for this means that it can be done on a larger scale.”

Angela Hart and Samantha Young write for Kaiser Health News, A non-profit news service covering health issues. This is an editorial independent program Kaiser Family Foundation It is not affiliated with Kaiser Permanente.