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SAN FRANCISCO \u2014 At a Walgreens in this city\u2019s bustling Japantown neighborhood, pharmacist Margaret On stocks two boxes of long-acting insulin pens from California\u2019s new prescription drug label, CalRx, emblazoned with the state\u2019s iconic grizzly bear.<\/p>\n
This story also ran on Stat. It can be republished for free.<\/p>\n
Although she hasn\u2019t dispensed any, On plans to keep them on hand. \u201cIt\u2019s good to have if a patient comes in and doesn\u2019t have health insurance,\u201d she said. \u201cOr just in case of emergencies.\u201d<\/p>\n
Seven months after the launch of its own low-cost insulin brand, state health officials said California has distributed more than 120,000 five-pen packs of insulin glargine priced at $55 each, significantly less than the $89 to $411 that the state says most popular brand names charge before any retail markups or consumer discounts.<\/p>\n
While it represents a tiny amount of the state\u2019s insulin pipeline, it marks the first time a state is competing against the three biggest insulin drugmakers \u2014 Eli Lilly, Sanofi, and Novo Nordisk \u2014 under its own prescription drug label. CalRx, Gov. Gavin Newsom\u2019s experimental initiative, has dual aims: to act as an emergency supplier for people who are uninsured or can\u2019t afford their prescriptions, and to disrupt the nation\u2019s deep-pocketed pharmaceutical industry, which cost the U.S. $467 billion in 2024, the federal government reported in June.<\/p>\n
Newsom, a Democrat considering a presidential run in 2028, is expected to make healthcare a central pillar of his national platform as he concludes his second and final term as governor. To create the state brand of generic drugs, California inked a $50 million contract with Civica, a Utah-based nonprofit drugmaker, to develop the CalRx insulin, known as a biosimilar. Though major distributors make the drug available in pharmacies around the state, uptake has been limited.<\/p>\n
Newsom\u2019s goal is to saturate the insulin market and offer generic versions of drugs either high in cost or low in supply, or that can improve public health. The state is also distributing free naloxone, used in a nasal spray to reverse opioid overdoses, and trying to bring albuterol inhalers to public schools for students with asthma emergencies. In the next two years, the state plans to launch epinephrine injectables, commonly known by the brand name EpiPen, which are used to treat severe allergic reactions, as well as a state-branded medication to treat tuberculosis.<\/p>\n
Before he leaves office in January, Newsom said, he wants to add generic GLP-1 medications to compete with brand-name drugs such as Ozempic and Wegovy. The drugs have exploded in popularity, but employers have raised concerns about their cost.<\/p>\n
Taking on drug costs is a winning political issue for both Democrats and Republicans, who have for years tried to rein in soaring healthcare spending as Americans feel the pinch of high prices at pharmacy counters, in doctors\u2019 offices, and from health insurance premiums. The U.S. spends roughly twice as much per capita on prescription drugs as other industrialized countries. Six in 10 adults in the U.S. say they\u2019re worried about being able to afford their prescription drug costs, according to a poll last winter by KFF, and 4 in 10 say they\u2019ve tried to save money such as by skipping doses and not filling prescriptions.<\/p>\n
In February, President Donald Trump launched TrumpRx to potentially lower out-of-pocket costs for consumers. But TrumpRx doesn\u2019t produce drugs; rather, it directs consumers to find more affordable medications with coupons or on drugmakers\u2019 websites. Newsom, in contrast, is trying to drive down the underlying price of medicines by increasing the manufacturing and availability of generic drugs.<\/p>\n
While some people with diabetes may benefit from CalRx insulin, California\u2019s generic drug effort is largely symbolic at this time, said Geoffrey Joyce, director of health policy at the Schaeffer Center at the University of Southern California. \u201cThere is some value, but it\u2019s for a very limited number of drugs for just a fraction of the population,\u201d Joyce said.<\/p>\n
And TrumpRx isn\u2019t helping at a large scale either, Joyce added, because many medications it advertises have cheaper generic versions available elsewhere. It would be better, he said, to develop large-scale initiatives that tackle key drivers of the high cost of drugs, for rare cancers for instance, and produce safer and higher-quality medicines.<\/p>\n
\u201cWhat you really need is a national effort that focuses on vulnerabilities like supply shortages and increasing the supply of generic products for higher-priced drugs,\u201d Joyce said.<\/p>\n
CalRx aims to make insulin more affordable and accessible for the nearly 3.7 million California adults diagnosed with diabetes. Newsom last year singled out the three major drugmakers that control more than 90% of the global insulin market, while also targeting intermediaries known as pharmacy benefit managers for promoting higher-priced drugs over cheaper generic alternatives.<\/p>\n