In a significant challenge to pharmaceutical companies, California passed SB852 in the State Assembly with overwhelming support (66-7) on August 31. The bill would allow the state to contract for or manufacture its own generic or biosimilar prescription drugs, and specifically names insulin in response to the demands of diabetes advocates searching for long-term solutions to the insulin price crisis. The bill is an improvement upon copay cap legislation that has been trending across the country, which, on average, only helps around 27% of state residents and excludes the uninsured, who are the most at risk of insulin rationing. Instead, this legislation attempts to address the issue that matters the most – the list price of insulin. It’s important to note that this legislation isn’t just for insulin. The highest cost drugs for chronic illnesses will be targeted first, increasing access to affordable drugs for millions of people. It aims to transform the drug pricing policy landscape, and will hopefully serve as a model for other states.
Governor Gavin Newsom has expressed his interest in public production of pharmaceuticals in the past, and in January, Senator Richard Pan introduced SB852 after negotiations with the Governor’s office. Then, the COVID-19 pandemic hit, accompanied by a massive budget deficit. The legislative session was interrupted, and the focus shifted to bills relating to the pandemic. Earlier in the year, AB2203, an insulin copay cap bill mirroring Colorado’s, made it through the State Assembly but was not scheduled for a State Senate hearing. Senator Pan’s comprehensive approach to the drug pricing crisis through SB852 fills in the important hole in AB2203 – the millions of people in the state who rely on insulin but are on plans the state is unable to regulate including MediCal (Medicaid), Medicare, Tricare, employer self-funded plans, and most notably, the uninsured. While advocates were disappointed by the dismissal of AB2203 in the 11th hour by the State Senate, they were surprised to see what was waiting in the shadows. Senator Pan’s amended bill made it into the Assembly Floor Session that started on August 30th at the last minute and continued the next day. Suddenly, advocates’ perspectives shifted from “what if?” to “let’s do this!” Governor Newsom now has until September 30th to sign the bill into law.
There are still a lot of unknowns with this legislation, likely because its framework is lacking in the public production arena. California will be the first state in the nation to attempt this. Public production of medicine will take several years to implement, but the bill outlines first steps including initial costs for startup funding and ongoing human resources costs, as well as a timeline that reaches into 2022-2023 for initial outcomes, including identifying which drugs the state could manufacture and subsequent reports to the legislature. Some drug manufacturers are already interested in collaborating with California to achieve this goal. This bill can work in tandem with efforts that create immediate, short-term solutions for people with diabetes who cannot afford their insulin, through copay caps and state assistance programs. It is necessary to embrace a “yes AND” approach - both kinds of policies must be implemented to help patients and achieve true change.
Public production of pharmaceuticals has been on the minds of advocates for years as one common sense solution to high drug prices and a broken healthcare system. In the Legislative Guide for Insulin for All, published in May 2020 by T1International and Public Citizen, public production is referred to as a “transformative policy,” seeking to address the root cause of the issue, rather than just a symptom. Other countries, like Sweden, have publicly-owned pharmaceutical firms that have a hand in research, development, manufacturing, wholesale, and distribution. Many believe that the US can do the same, and SB852 shows that states, not just the country, can participate in this work to solve a decades-old problem that touches almost everyone’s life directly or indirectly.
Even with myriad questions still lingering from public health advocates seeking to address the gaps in the bill text (like how much would generic insulin sell for in the state, would other states be able to purchase insulin, and how will this impact patient voice and choice in treatment), this is an exciting time in California and for the rest of the country. California will be a case study for the rest of the country in how public production can increase access to medicine. The state has an opportunity to prop up the failing drug market and help ease the insulin crisis in other states. While this is a state bill, the transformative power of public drug production could potentially reach the entire nation.
As an advocate and a person with diabetes, this glimmer of hope during an apocalyptic year that has spotlighted serious injustices within our country is a reprieve and a reminder of how powerful patients are. Even with a years-long timeline, I am hopeful that this is the start of a shift in the conversation about how state and local governments ensure that their residents have access to affordable drugs. SB852 shows that states DO have power, and advocates can and SHOULD be asking more of their legislators. We do not have to settle for less-than policies and accept unfounded excuses from our elected officials as to why they won’t reach outside of the safe policy space. I am hopeful that other advocates feel this energy too, and continue to use their powerful voices to create impact in all fifty states. This is just the beginning.