California Governor Gavin Newsom announced Thursday that the state will begin selling its own brand of generic insulin pens for $55 per five-pack starting January 1, 2025, making California the first state in the nation to bypass major pharmaceutical companies with its own insulin supply. The initiative represents a significant milestone in the state's CalRx program, designed to drive down healthcare costs through state-branded generic drugs.
CalRx Program Delivers on Cost Reduction Promise
Under the new program, California pharmacies will be able to purchase the five-pack of insulin pens for $45 and sell them to patients at the suggested retail price of $55. This pricing structure offers substantial savings compared to current market conditions, where similar products from name brand companies cost pharmacies between $89 and $411, according to state figures.
"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. "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 addresses a critical healthcare affordability issue, as insulin users without health insurance today can pay $400 for a small vial. Newsom emphasized that Californians shouldn't "ration insulin or go into debt to stay alive."
Manufacturing Partnership and Product Details
The insulin pens will be supplied through a $50 million contract with nonprofit generic drugmaker Civica Rx, which the state established in 2023. Civica Rx built a manufacturing plant in Petersburg, Virginia and later contracted with Biocon Biologics to bring long-acting insulin to market for the CalRx program.
The first insulin type to become available in January will be Glargine, a generic version of Sanofi's Lantus. The companies plan to eventually produce the three most widely used types of insulin: Glargine, Aspart, and Lispro. The pens will function identically to other long-acting insulin products currently on the market, which people with diabetes use to control insulin levels in their bodies.
Legislative Support and Broader Context
The insulin launch coincides with new state legislation signed by Newsom earlier this week. Senate Bill 40 caps insulin co-pays at $35 for the first time in California, providing additional cost protection for patients with insurance coverage.
"This law ensures no family will be forced to choose between buying insulin and putting food on the table in California again," said the bill's author, Sen. Scott Wiener (D-San Francisco).
CalRx Program Evolution
Newsom first unveiled the proposal for California to manufacture its own line of generic drugs in 2020, positioning himself as the "healthcare governor" during his campaign. The CalRx program was formally established through legislation in 2020, received initial funding in 2022, and struck the manufacturing deal with Civica Rx in 2023.
The insulin launch comes sooner than initially projected, as state officials had indicated in February that CalRx could still be years away from bringing insulin to patients while seeking formal approval from the federal Food and Drug Administration.
Prior to insulin, the state began selling Naloxone, a medication that blocks the effects of opioids, at below-market prices earlier this year, marking the program's initial foray into state-branded pharmaceuticals.
Industry Impact and Pricing History
The insulin market has been a focal point of pharmaceutical pricing criticism, with the cost of insulin becoming a major political issue in 2017. Top manufacturers Eli Lilly, Sanofi, and Novo Nordisk faced a class action lawsuit accusing them of dramatically raising prices annually, with prescriptions that previously cost patients $25 ballooning to $300.
While major drug companies have since reduced insulin prices, critics argue that cost savings are often passed on to other consumers rather than providing direct relief to patients. State officials hope California's generic insulin will lower costs across the board, not just for consumers purchasing the state-branded product.
The federal government brought a lawsuit in 2024 against pharmacy middlemen, also accusing them of contributing to inflated insulin costs, highlighting the ongoing complexity of pharmaceutical pricing structures.
