Newsom Vetoes Bill to Cap Insulin Prices, Citing State’s Own Brand

California Governor Gavin Newsom has vetoed a bill that would have limited the out-of-pocket expenses for insulin prescription drugs to $35 for a 30-day supply. The bill, SB 306, was authored by Senator Scott Wiener and aimed to help diabetic Californians who struggle to afford the life-saving hormone.

Newsom, aid that the bill would not address the underlying problem of high insulin prices and would only shift the costs to consumers through higher premiums from health plans. He cited the state’s own brand of insulin, CalRx, as a better solution to lower the cost of insulin for Californians.

“With CalRx, we are getting at the underlying cost, which is the true sustainable solution to high-cost pharmaceuticals,” Newsom wrote in his veto message on Saturday. “With copay caps, however, the long-term costs are still passed down to consumers through higher premiums from health plans.”

Newsom Vetoes Bill

CalRx to sell insulin for $30 per vial

CalRx is a state-owned generic drug brand launched by Newsom in 2020 as part of his California for All initiative. The state has partnered with Civica Rx, a nonprofit pharmaceutical company, to manufacture and distribute generic drugs under the CalRx label.

The state plans to start selling insulin under the CalRx brand by early 2024. According to Newsom, the state will offer a 10 milliliter vial of insulin for $30, which is significantly lower than the average price of $98 per vial in the U.S. market.

Newsom said that CalRx will save Californians up to $500 million per year on insulin and other essential drugs. He also said that CalRx will increase competition and transparency in the pharmaceutical industry and reduce the influence of drug manufacturers and middlemen.

Senator Wiener calls veto a “major setback” for diabetic Californians

Senator Wiener, who represents San Francisco and parts of San Mateo County, expressed his disappointment and frustration over Newsom’s veto of his bill. He said that SB 306 would have provided immediate relief for tens of thousands of diabetic Californians who face financial hardship and health risks due to the high cost of insulin.

“This is a missed opportunity that will force them to wait months or years for relief from the skyrocketing costs of medical care when they could have had it immediately,” Wiener said in a press release. “This veto is a major setback that will keep tens of thousands of diabetic Californians trapped in the terrible choice between buying insulin and buying food.”

Wiener also questioned the effectiveness and availability of CalRx, saying that it is unclear how many people will be able to access it and whether it will meet the demand and quality standards. He said that his bill would have complemented CalRx by ensuring that insurance companies do not charge excessive copays or deductibles for insulin.

Insulin prices have soared in recent years

Insulin is a hormone that regulates blood sugar levels and is essential for people with diabetes. According to the American Diabetes Association, about 3.2 million Californians have diabetes, and about 1.5 million of them need insulin to survive.

However, insulin prices have increased dramatically in recent years, making it unaffordable for many people with diabetes. A study by Health Care Cost Institute found that the average annual spending on insulin per person with Type 1 diabetes in the U.S. rose from $2,864 in 2012 to $5,705 in 2016.

The high cost of insulin has forced many people with diabetes to ration their doses, skip meals, or forego other necessities. Some have even died due to lack of access to insulin. In January 2021, California Attorney General Rob Bonta filed a lawsuit against three major insulin manufacturers, accusing them of colluding to inflate the price of insulin and engaging in unfair business practices.

In March 2021, the three companies announced that they would voluntarily lower the price of their insulin products in response to public pressure and legal actions. However, advocates say that more needs to be done to ensure that insulin is affordable and accessible for all people with diabetes.

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