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Here’s How Cheap Insulin Could Work

California wants to sell 'biosimilars' that look like brand-name versions but cost a lot less.

In an effort to keep prices from going up, California's governor, Gavin Newsom, said earlier this month that the state would make its own insulin. "The price of insulin is the best example of how the market fails," he said in a video posted on Twitter on July 7. "People shouldn't have to go into debt to get medicine that could save their lives."

More than 30 million Americans have diabetes, and about 8 million of them take insulin, a hormone that controls blood sugar, to control their diabetes. People in the United States who don't have health insurance or who have plans with high deductibles may have to pay hundreds of dollars a month for insulin. In a 2019 study, about one in four users said that because of the cost, they had to skip doses or use less than what was prescribed.

Under Newsom's plan, California would make insulins that are biosimilar to the brand-name insulins that are already on the market. Alex Stack, deputy communications director for the governor's office, says that patients can expect to pay anywhere from 47 to 95 percent less than they do now. (A person's savings will depend on whether or not they have insurance.) "There's no reason why other people can't do it and still make money if we can do it," says Stack.

Under the plan, $100 million of the state's $308 billion budget would be set aside for the project. At first, California will spend $50 million to buy insulin from a partner company so that a product can be sold as soon as possible. Stack thinks that will happen around the start of 2024. In the end, the state will spend another $50 million to build a manufacturing plant in California. Newsom says that this will create a "stronger supply chain." Even though the state hasn't worked out how to get the insulin to people yet, Stack says that anyone in the US, not just people who live in California, would be able to get it.

California isn't the only place trying to bring down the price of insulin. Civica, a Utah-based nonprofit pharmaceutical company, said in March that it would make and sell its own low-cost insulin. The company wants to make biosimilar versions of Lantus, Humalog, and Novolog, which are the three insulins used most often every day in the United States. These versions will come in both vials and pens. Civica is spending $140 million to build a factory in Virginia that will make insulin and other drugs.

Civica plans to keep the price of a vial at $30 and the price of a box of five pen cartridges at $55. (How long this might last depends on a person's weight, diet, and whether they have Type 1 or Type 2 diabetes.) Allan Coukell, Civica's senior vice president of public policy, says, "Our pricing is based on how much it costs to make and distribute the product, plus a small margin that keeps production going."

Coukell says that Civica's insulin will be sold in a lot of drug stores in the US, including online ones. Coukell says, "We'll sell it to any pharmacy that wants to buy it and follows our pricing policy, which is not to mark it up too much before it gets to the patient."

To make a biosimilar, it can take seven to eight years and between $100 million and $250 million. California and Civica are shortening this time frame by working with companies that are already making their own insulin. California hasn't decided on a manufacturer yet, but Civica has teamed up with an Indian biotech company that has made the technology to make biosimilar insulin. Civica also wants to put out its first insulin product by 2024.

Insulin was first found in 1921, and a 14-year-old boy with diabetes was the first person to be treated with it the following year. In 1923, the breakthrough in medicine won the Nobel Prize. The hormone was first taken from the pancreas of cows and pigs, but in 1978, scientists figured out how to make a synthetic version for humans. It was the first drug that was made by changing genes. Since then, Eli Lilly, Novo Nordisk, and Sanofi have dominated the market for insulin in the US.
Make Insulin Affordable Again - Diabetes Awareness - Sticker | TeePublic
Making insulin is not an easy job. It is a biological drug, which means it is made from living cells. Biologics are made of large molecules and are hard to make. On the other hand, most medicines today are small-molecule drugs that are made from chemicals and are easy to make in large quantities.

Scientists use large tanks of yeast or bacteria cells that have been changed with a human gene that tells the cells how to make the insulin protein. The yeast or bacteria cells make the protein, which is then taken out and cleaned before being put into vials or pens that can be injected. "It's not enough to just mix some things together and get a chemical reaction. Walid Gellad, who runs the University of Pittsburgh's Center for Pharmaceutical Policy and Prescribing, says, "There's a lot more that goes into making a complicated biologic." Antoinette Forbes, associate vice president of public affairs at Eli Lilly, says that the company uses about 5,000 engineers and other scientists to oversee the process of making insulin.

Before, even if a company wanted to, it couldn't make cheaper versions of insulin. Since biologics aren't like other drugs, they couldn't be made into generics, which are copies of brand-name drugs that are chemically the same. This changed in 2010, when Congress passed a law that gave the Food and Drug Administration a way to approve biosimilars. The FDA made it easier to get insulin by 2020, so there will be more competition. It gave approval to the first biosimilar insulin, Semglee, in July 2021. It can be used instead of Lantus. GoodRx says that a vial of Semglee costs about $100, while a vial of Lantus can cost $300 or more.

Pharmacy benefit managers (PBMs), which act as middlemen between insurers and drug manufacturers to negotiate prices, have also been blamed for the high cost of insulin. Manufacturers compete to get their drugs covered by health plans by giving rebates and discounts. Critics say this lets them raise the prices on the list. In turn, PBMs get a portion of these rebates. The practice was looked into by both Democrats and Republicans on the Senate Finance Committee for two years, and the results came out in January 2021.

"This rebate game is the reason for the price increase, not because the product is better or because it costs more to make," says Campbell Hutton, vice president of regulatory and health policy at JDRF, a New York-based organization that funds research on type 1 diabetes. This kind of rebate is not part of California's plan.

WIRED wrote to Eli Lilly, Novo Nordisk, and Sanofi, and they all said that even though insulin prices are going up for patients, they are not making more money. They said that after discounts and rebates, the real money they make from their insulins has been going down over the past few years. Adam Gluck, Sanofi's senior vice president and head of US corporate affairs, wrote that the net price of the company's insulin has dropped by 54 percent since 2012. The net price is what the company makes after paying rebates. "PBMs have been asking for rebates on drugs for almost 20 years, and rebates are now a standard part of our health care system," he wrote.

From 2016 to 2021, the net price per vial of Eli Lilly's insulin Humalog went down by 26%, according to a letter from a company representative. Allison Schneider, a spokeswoman for Novo Nordisk, wrote that her company's net price has also gone down over the past five years because it pays rebates and discounts. "The US health care system is very complicated, and players all along the supply chain have an effect on how the market works. "What people pay out of pocket for insulin depends on a lot of things," she wrote.

All of the companies have programs to help people who can't pay for insulin but need it. Each program has its own rules for who is eligible.

In addition to the plans of California and Civica, Democratic members of Congress are also working to lower the price of insulin. The Affordable Insulin Now Act was passed by the US House of Representatives in March. It would limit the amount Americans would have to pay out of pocket for insulin to $35 per month if they have private insurance or Medicare. Even though Vice President Biden was in favor of the measure, it did not pass the Senate.

Irl Hirsch, an endocrinologist at the University of Washington who specializes in treating diabetes, says that California's and Civica's plans are interesting ways to get around the problem of how much insulin costs. "When you put all of these things together, they could really shake up the market," he says.

Still, neither plan is a quick fix for people who have to pay a lot for insulin right now. Even though it's now easier for drug companies to make and get approval for insulin biosimilars, any version California or Civica makes will have to go through a lot of testing to make sure it's safe and similar enough to the brand names already on the market. "The biggest challenge will be making sure that everything meets FDA regulations," says Hirsch. "There's no way to make a mistake here."


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