The Problem
Through manipulation by pharmaceutical companies and pharmacy benefit managers, many essential medications have become more and more expensive over the years despite no real improvements. Insulin, for example, costs very little to make and is essential for diabetics to survive, but American patients find themselves paying thousands of dollars per month for it.[1]
The Solution
State governments could solicit bids for their own contracts to manufacture key medicines, allocating their own budgets toward producing medicines that cost very little to make but are currently unreasonably priced in private markets.
Model Legislation
California has allocated $50 million of the state budget to produce low-cost insulin through a 10-year contract with nonprofit drug manufacturer Civica.[2]
Notes
[1] Dzintars Gotham, Melissa J. Barber, and Andrew Hill, “Production costs and potential prices for biosimilars of human insulin and insulin analogues,” BMJ Global Health, 2018, https://gh.bmj.com/content/3/5/e000850.
[2] Emma Bowman, “California enters a contract to make its own affordable insulin,” NPR, March 19, 2023, https://www.npr.org/2023/03/19/1164572757/california-contract-cheap-insulin-calrx.