California will tackle high drug prices by making its own low-cost insulin, Newsom says

California Gov. Gavin Newsom shared plans Thursday for his state to manufacture insulin and “make it available to all” at a price close to its cost.

In a Twitter video, the governor said a state budget signed last week includes $100 million for California to contract and make its own insulin.

“Nothing epitomizes market failures more than the cost of insulin," Newsom said in the video. "Many Americans experience out-of-pocket costs anywhere from $300 to $500 per month for this life-saving drug. California is now taking matters into our own hands."

Newsom had signed an executive order upon taking office in 2019 that instructed California’s Department of Health Care Services to investigate how the state could cut down the price of high-cost prescription drugs. State manufacturing of insulin is an extension of those efforts, he said.

Half of the allotted funds will be put toward the development of low-cost insulin products while the remaining $50 million will support a California-based insulin manufacturing facility “that will provide new, high-paying jobs and a stronger supply chain for the drug,” the governor said.

Newsom did not specify a specific price range for the state-made drugs, only saying the program would provide the drug “close to at cost.”

Insulin has been a focal point for political action on drug prices.

A bill passed in the House this year aimed to limit out-of-pocket insulin costs for Medicare Part D beneficiaries and some other groups to $35 per month for a 30-day supply. That bill is expected to face resistance in the Senate, where a separate bipartisan group of lawmakers had recently focused on its own legislation both capping out-of-pocket costs and outlawing drug rebates.