Gov. Gavin Newsom’s ambitious plan to produce a cheap, generic insulin for the 3.2 million Californians with diabetes is behind the schedule he announced and unlikely to make it to market for several years, industry experts say.

Civica, Inc., the nonprofit drug manufacturer contracted to produce insulin for California, has not started clinical trials or applied for approval from the federal Food and Drug Administration, both of which are likely to take more than a year to complete.

During his 2023 State of the State tour, Newsom announced California would begin selling insulin for $30 a vial with a “2024 delivery in terms of timeline,” pending FDA approval.

That target has come and gone.

Realistically, the state is at least one year away, if not more, multiple industry experts told CalMatters.

“You could be anywhere from 12 months to two or three years before you get your actual approval — and that’s if nothing goes wrong,” said James Bruno, a longtime chemical and pharmaceutical consultant for drug manufacturers.

A 2020 law aimed partially at bringing down insulin prices allowed Newsom to negotiate the 10-year, $50 million contract with Civica. Newsom earmarked an additional $50 to seed the construction of a drug manufacturing facility in California.

In the meantime, insulin prices have dropped nationally as a result of public pressure, the Biden administration’s 2023 cap on insulin prices for some seniors with Medicare, and changes to Medicaid rules that tied drug prices to inflation. At least 25 states and the District of Columbia have also implemented monthly co-pay caps to help offset continuing expenses for diabetics.

California is not one of those states. Newsom in October rejected a $35 monthly insulin copay cap. In his veto message, he cited the state’s $100 million investment in insulin production as an example of his administration’s efforts to reduce costs without a price cap.

The state’s effort to manufacture insulin is “getting at the underlying cost, which is the true sustainable solution to high-cost pharmaceuticals. With copay caps however, the long-term costs are still passed down to consumers through higher premiums from health plans,” Newsom wrote in his veto message.

Newsom spokesperson Elana Ross said in a statement that the governor remains committed to making affordable insulin, but did not answer questions about an updated timeline for when insulin would make it to market or how much money the state has paid to Civica for meeting various manufacturing goals.

“That process is underway and moving forward, though there have been delays, which is not unusual,” Ross said. “The priorities of both the administration and Civica continue to be quality and price, and all parties continue to advance development toward FDA approval with those north stars.”

Ross also refused to answer CalMatters’ questions about the state’s plans to develop a manufacturing plant in California. Industry experts say it would take far more money than the $50 million California has budgeted, and many years to build one from the ground up.

Allan Coukell, chief government affairs officer at Civica, said manufacturing has begun at the company’s new pharmaceutical plant in Virginia but there is no timeline for when the first insulin — a generic for glargine — will be available on the market.

“We want to be careful about setting expectations. We’re working through the process and it’s going well,” Coukell said.

FDA approval for new drugs takes years

Bringing a drug to market, even a generic one, takes years, experts say. And biologics, like insulin, which are produced by living organisms such as cells and bacteria, are even more complicated.

FDA approval requires the manufacturer to be able to prove that its manufacturing plant and processes are safe and repeatable. The manufacturer must demonstrate that its raw drug substances are pure and potent. It has to show that the drug is stable in its packaging, and it must conduct extensive analytical and clinical testing to establish that the drug is safe and highly similar to the brand-name product.

“You have to show the FDA that if it quacks like a duck (and) walks like a duck, it is a duck in every aspect compared to the innovator molecule,” said Govind Rao, a professor of chemical and biochemical engineering at the University of Maryland, Baltimore County.

The FDA approved Semglee in 2021, the first interchangeable biosimilar insulin, four years after the manufacturer submitted its initial application and two-and-a-half years after the manufacturer resubmitted the application addressing concerns from the agency. The primary clinical trial took a little over one year to complete, according to government records.

Rezvoglar, approved later in 2021, received FDA approval a year after submitting its application. It took another year for the FDA to grant interchangeability status to Rezvoglar, meaning it can be substituted at the pharmacy for Lantus, the brand name insulin glargine, without needing a separate prescription.

The length of time it takes for a company to develop a drug, get FDA approval and bring it to market is highly variable, said David Gaugh, executive vice president for the Association for Accessible Medicines, a trade organization for generic drug manufacturers. It depends on how experienced the company is and what its data looks like, Gaugh said.

“I would make a general statement that it’s probably going to be somewhere between two and four years” to bring a biosimilar insulin to market from start to finish, Gaugh said.

Civica, a nonprofit founded by hospitals facing drug shortages, is not an untested drug manufacturer. It produces about 80 generic drugs for hospitals across the country. Insulin is Civica’s first biosimilar product. A year before contracting with California, Civica independently announced it would produce insulin by 2024.

It is possible for the FDA to fast-track drug applications that are high-profile or politically sensitive like insulin, pharmaceutical consultant Bruno said, but even then the review process is at minimum six months.

A spokesperson for the FDA said the agency cannot confirm or deny the existence of a pending product application, but the typical review cycle is 12 months from the time of submission. That would put Newsom’s insulin project more than a year behind his stated schedule.

California aimed to disrupt pharmaceutical market

When he announced the Civica deal in early 2023, Newsom made it clear that the project’s goal was to disrupt the practices used by drug makers, insurers and their distributors to jack up prices. By eliminating those players and wielding its enormous purchasing power, California could offer insulin at-cost to people who need the drug to survive.

“This is a big deal, folks. This is not happening anywhere else in the United States,” Newsom said during his 2023 State of the State speech in Downey. “This fundamentally lowers the cost, period, full stop.”

Insulin is frequently held up as the poster child for a broken health care market. People have relied on the drug for more than 100 years, but its price keeps increasing partially because demand is high and drug distributors and insurers could profit. Between 2012 and 2021, the price for a one-month supply of insulin increased nearly 200%, peaking at $541 per month in 2019, according to the Health Care Cost Institute.

The three major brand-name insulin manufacturers — Eli Lilly, Novo Nordisk and Sanofi — cut prices between 65% to 80% in 2024.

Former Sen. Richard Pan, a Democrat from Sacramento and a pediatrician, said the state’s plan to produce insulin by 2024 sounded “ambitious” but he was not involved in the contracting discussions. Pan authored the 2020 legislation that enabled California to pursue the deal with Civica and establish CalRx, the brand under which future state generics will be sold.

“I had to trust the administration was having conversations and had information about how far along they were in their process and whether they were able to hit a 2024 deadline,” Pan said.

Some health economists say recent moves by major insulin manufacturers to drastically lower prices will cause companies that are in the process of producing new biosimilar insulins to pull out of the market because there isn’t enough of a profit incentive to recoup the cost of producing a cheaper generic.

In that case, Pan said California’s plan to produce a biosimilar insulin becomes even more important. If major manufacturers can drive competition out of business, they could just increase prices again down the road, Pan said.

“Someone can say ‘Oh if it’s already down that much, is it still worth doing or not?’ Well, it’s one way to keep (prices) down,” Pan said. “If we can still produce it for less than they’re selling it, why not make that…available to Californians and our Medicaid program and save some money.”

Pan’s legislation also allowed the state to negotiate a lower price point for naloxone, a drug used to reverse opioid overdoses. In that instance, California leveraged its purchasing power and is acting as a distributor for an existing drug on the market rather than supporting research and development as well as manufacturing costs.

In addition to price drops, Eli Lilly and Sanofi created financial assistance programs to cap consumer out-of-pocket costs at $35 per month.

Those savings aren’t necessarily universal, however, depending on the type of insulin patients need or prefer. In a statement at the time, Sen. Scott Wiener, author of the 2023 bill that would have capped out-of-pocket insulin costs for Californians at $35 per month, called Newsom’s veto a “major setback” for diabetics.

“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.

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Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.