California to Sell Its Own Low-Cost Insulin Starting January, Becoming First State to Bypass Big Pharma

California will begin selling low-cost insulin in January, becoming the first U.S. state to bypass the pharmaceutical industry by offering its own supply of the expensive diabetes medication. The move marks a notable milestone in Governor Gavin Newsom's effort to lower health care costs through state-branded drugs.

The insulin pens will be provided through the CalRx program, an initiative Newsom launched to allow the state to contract with manufacturers to produce generic medicines. The pens, used by people with diabetes to regulate their insulin levels, will be identical to other long-acting insulin products on the market. They will be offered at a recommended price of no more than $55 for a five-pack a substantial discount compared with current prices.

"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 announcing the new medication. "No Californian should ever have to ration insulin or go into debt to stay alive - and I won't stop until health care costs come down for everyone".

The announcement places California at the forefront of states seeking new ways to keep health care affordable in a system dominated by for-profit companies. It also highlights the state's ability to leverage the size of its massive economy and purchasing power. And securing an insulin supply marks a key victory for Newsom, who made CalRx an early centerpiece of his administration but had little to show for it until now.

By sidestepping major drugmakers, the state is reinforcing its independent approach - an ethos perhaps best captured by former Governor Jerry Brown, who declared in 2018 that California would launch its "own damn satellite" to monitor climate-warming emissions. Newsom has since made Brown's moonshot a reality.

Insulin prices have fallen since the issue became a political flashpoint in 2017, when leading manufacturers - Eli Lilly, Sanofi, and Novo Nordisk - were accused in a class-action lawsuit of dramatically raising prices each year. A prescription that once cost patients $25 had climbed to $300, the lawsuit said. Politicians seized on the issue to criticize what they said was an out-of-control pharmaceutical industry. In 2024, the federal government filed a lawsuit against pharmacy benefit managers, accusing them of also contributing to surging insulin costs.

The century-old drug has long been a symbol of what critics call pharmaceutical price gouging. Both President Donald Trump and President Joe Biden have touted efforts to cap insulin costs for Medicare plans at $35.

Under the CalRx agreement, pharmacies in California can purchase a five-pack of insulin pens for $45 and sell them to patients at a recommended price of $55. Comparable brand-name products cost pharmacies anywhere from $89 to $411, according to state data.

The announcement that the state-produced insulin will be available at the start of the year comes as a surprise, after state officials said in February that CalRx might still be years away from delivering insulin to patients because it was awaiting formal approval from the U.S. Food and Drug Administration (FDA).

After Newsom established CalRx in 2020, the program received its first funding in 2022. The following year, the state signed a $50-million contract with the nonprofit Civica Rx to manufacture insulin.

Civica Rx built a production facility in Petersburg, Virginia, and later signed a deal with another manufacturer, Biocon Biologics, to bring long-acting insulin to market for CalRx. The long-term plan is to produce the three most widely used types of insulin: glargine, aspart, and lispro. Glargine, a generic version of Sanofi's Lantus, will be the first available starting in January.

Through CalRx, the state has also secured contracts to provide a lower-cost version of naloxone, a drug that can reverse an opioid overdose. And earlier this year, Newsom announced plans to pursue bulk purchasing of asthma medications. He has also floated the possibility of using CalRx to produce or stock abortion medications.