$35 in 2025 dollars buys as much as $32.92 in 2023 dollars [1]. At what point does it become unprofitable for anyone to manufacture and deliver? (Not the out-of-patent stuff nobody wants to take that can be made for $3/vial. The long-acting and ultra-fast formulations people actually use when given a choice.)
And unlike with home insurance, in an insulin shortage, people die. You need a CalFIRE mechanism, a seller of last resort, who will purchase the insulin at any price on the market and sell it at $35 for such a scheme to work.
State-controlled production removes that surprise factor. It's a much better system than price regulation.
It's worth noting that the veto message on the 2023 bill (which did not cap insulin prices, but only insurance copays for insulin) explicitly called out the CalRx project as providing the real solution, and noted that capping copays without addressing actual drug costs would result in the actual price just getting passed on to consumers via insurance premiums.
It is also worth noting that this week Newsom signed SB 40 0f 2025, which did exactly the same thing in this area as the vetoed SB 90 of 2023, no doubt because the price side was also being adddressed simultaneously, with CalRx insulin to be on available in January when SB 40 goes into effect.
The difference is that the proposed caps for home insurance would have made the product unprofitable, no question.
My understanding is that there is no way any vial of insulin anywhere, at this point in time, should cost enough to produce for US$35 asking price to be unprofitable. See [1] and [2] for example. This would need to increase with inflation, of course.
Regardless, the bill didn't pass. Arguments like this were probably the reason why.
> My understanding is that there is no way any vial of insulin anywhere, at this point in time, should cost enough to produce for US$35 asking price to be unprofitable.
The vetoed bill (SB 90 of 2023) did not address the price of insulin, only the allowable insurance copay for insulin. The fact that this, without addressing the actual price, would just shift the costs from copays to premiums was called out in the veto message.
Also note that, with CalRx's insulin initiative ready to deliver at the same time the bill goes into effect, SB 40 of 2025 which set the same copay cap as SB 90 of 2023, was signed by Newsom this week.
> The long-acting and ultra-fast formulations people actually use when given a choice.
The patent for insulin glargine (Lantus) and insulin aspart (NovoLog) expired over a decade ago, though kind of amusingly Sanofi holds an active patent on “putting more Lantus in a vial than you usually would”
I could be wrong but off the top of my head the only insulin I can think of that’s probably under patent is Afrezza, which is cool as hell because it’s inhalable and ultra-quick
It’s less the patent per se than the production cost. A lot of cost estimates use the 1980s Humalin or whatnot as their baseline. I’m not diabetic. But everyone I know who is doesn’t like that one. So we need to know the cost for the medicines folks are actually taking.
Fast Acting Humalog 1000 unit (10 ml) vials cost CAD $40.34 = USD $28.73 in Alberta. Anyone can get Blue Cross from the government which is CAD $720 a year. Then each 3 month supply of a prescription like insulin has a co-pay of $28 a quarter, for however many vials you need. I last used Lantus 24 hour insulin in 2020, when it was around CAD $60, but the government has been switching to biosimilar brands and providing free insulin pumps and supplies including test strips, which only use fast acting insulins. Lantus is most similar to this California insulin.
I want to know the economics of this, especially since California is partnering with the actual company that's building and running the factories. Is this insulin expected to sell at a profit? Break-even? Or is California just spending its own money to get the price point down?
The biosimilar insulin initiative is by design priced to cover end-to-end costs (the CalRx own program costs and the cost to manufacture); the main contracted manufacturer (CivicaRx) is also a nonprofit generic drug manufacturer, but the initial supply that will be available in January is something they've subcontracted with Biocon Biologics for (my understanding is that this is because the Biocon product already has FDA clearance, whereas regulatory clearance for CivicaRx's product is still pending, though the manufacturing is up and running.)
The biosimiliar insulin initiative is a very big deal, but for context it is not CalRx's first effort to reach public availability. That was the Naloxone Initiative, which made OTC naloxone (generic for Narcan), which hit the market last year at about 40% below the pre-existing market price, and has dropped further since.
Related:
California governor vetoes bill that would have set a $35 cap for insulin - https://news.ycombinator.com/item?id=37815862 - October 2023 (139 comments)
California’s Plan for Cheaper Insulin Collides with Big Pharma’s Price Cuts - https://news.ycombinator.com/item?id=35325942 - March 2023 (2 comments)
California's Own Brand of Insulin - https://news.ycombinator.com/item?id=35220390 - March 2023 (0 comments)
Insulin is way too expensive. California has a solution: Make its own - https://news.ycombinator.com/item?id=34726726 - February 2023 (258 comments)
California aims to make its own insulin brand to lower price - https://news.ycombinator.com/item?id=32311465 - August 2022 (29 comments)
Governor Newsom announces California will make its own insulin - https://news.ycombinator.com/item?id=32021868 - July 2022 (216 comments)
California aims to slash insulin prices - https://news.ycombinator.com/item?id=31649237 - June 2022 (208 comments)
> bill that would have set a $35 cap for insulin
Because this worked so well for home insurance.
$35 in 2025 dollars buys as much as $32.92 in 2023 dollars [1]. At what point does it become unprofitable for anyone to manufacture and deliver? (Not the out-of-patent stuff nobody wants to take that can be made for $3/vial. The long-acting and ultra-fast formulations people actually use when given a choice.)
And unlike with home insurance, in an insulin shortage, people die. You need a CalFIRE mechanism, a seller of last resort, who will purchase the insulin at any price on the market and sell it at $35 for such a scheme to work.
State-controlled production removes that surprise factor. It's a much better system than price regulation.
[1] https://www.usinflationcalculator.com
It's worth noting that the veto message on the 2023 bill (which did not cap insulin prices, but only insurance copays for insulin) explicitly called out the CalRx project as providing the real solution, and noted that capping copays without addressing actual drug costs would result in the actual price just getting passed on to consumers via insurance premiums.
It is also worth noting that this week Newsom signed SB 40 0f 2025, which did exactly the same thing in this area as the vetoed SB 90 of 2023, no doubt because the price side was also being adddressed simultaneously, with CalRx insulin to be on available in January when SB 40 goes into effect.
The difference is that the proposed caps for home insurance would have made the product unprofitable, no question.
My understanding is that there is no way any vial of insulin anywhere, at this point in time, should cost enough to produce for US$35 asking price to be unprofitable. See [1] and [2] for example. This would need to increase with inflation, of course.
Regardless, the bill didn't pass. Arguments like this were probably the reason why.
[1] https://www.mayoclinicproceedings.org/article/S0025-6196(21)... [2] https://www.medcentral.com/endocrinology/diabetes/the-high-c...
> My understanding is that there is no way any vial of insulin anywhere, at this point in time, should cost enough to produce for US$35 asking price to be unprofitable.
The vetoed bill (SB 90 of 2023) did not address the price of insulin, only the allowable insurance copay for insulin. The fact that this, without addressing the actual price, would just shift the costs from copays to premiums was called out in the veto message.
Also note that, with CalRx's insulin initiative ready to deliver at the same time the bill goes into effect, SB 40 of 2025 which set the same copay cap as SB 90 of 2023, was signed by Newsom this week.
> The long-acting and ultra-fast formulations people actually use when given a choice.
The patent for insulin glargine (Lantus) and insulin aspart (NovoLog) expired over a decade ago, though kind of amusingly Sanofi holds an active patent on “putting more Lantus in a vial than you usually would”
https://patents.google.com/patent/US9345750B2/en
I could be wrong but off the top of my head the only insulin I can think of that’s probably under patent is Afrezza, which is cool as hell because it’s inhalable and ultra-quick
It’s less the patent per se than the production cost. A lot of cost estimates use the 1980s Humalin or whatnot as their baseline. I’m not diabetic. But everyone I know who is doesn’t like that one. So we need to know the cost for the medicines folks are actually taking.
It looks like the cost to manufacture modern biosimilars could be around $2-6 per vial.
https://gh.bmj.com/content/3/5/e000850
Cost to manufacture obviously isnt the only factor.
What if the price cap was set at whatever Canadians pay for insulin?
It seems like insulin is a lot more affordable there and it's obviously an economically sustainable rate because companies keep selling it to Canada.
How much does it cost in Canada anyways?
Fast Acting Humalog 1000 unit (10 ml) vials cost CAD $40.34 = USD $28.73 in Alberta. Anyone can get Blue Cross from the government which is CAD $720 a year. Then each 3 month supply of a prescription like insulin has a co-pay of $28 a quarter, for however many vials you need. I last used Lantus 24 hour insulin in 2020, when it was around CAD $60, but the government has been switching to biosimilar brands and providing free insulin pumps and supplies including test strips, which only use fast acting insulins. Lantus is most similar to this California insulin.
I want to know the economics of this, especially since California is partnering with the actual company that's building and running the factories. Is this insulin expected to sell at a profit? Break-even? Or is California just spending its own money to get the price point down?
The biosimilar insulin initiative is by design priced to cover end-to-end costs (the CalRx own program costs and the cost to manufacture); the main contracted manufacturer (CivicaRx) is also a nonprofit generic drug manufacturer, but the initial supply that will be available in January is something they've subcontracted with Biocon Biologics for (my understanding is that this is because the Biocon product already has FDA clearance, whereas regulatory clearance for CivicaRx's product is still pending, though the manufacturing is up and running.)
The biosimiliar insulin initiative is a very big deal, but for context it is not CalRx's first effort to reach public availability. That was the Naloxone Initiative, which made OTC naloxone (generic for Narcan), which hit the market last year at about 40% below the pre-existing market price, and has dropped further since.
[flagged]
> US caring about affordable health care in any way?
is an example of the Fallacy of Division.US isn't a singular entity. A bunch of states do quite a lot for their populace in general.