SACRAMENTO COUNTY, Calif. — Gov. Gavin Newsom announced on Thursday, California is going to make its own insulin as part of the $308 billion budget he signed on July 1.
In a video posted to Twitter, Newsom said some people pay for insulin out of pocket anywhere from $300-$500 per month.
"The budget I just signed sets aside $100 million so we can contract and make our own insulin at a cheaper price, close to at-cost, and to make it available to all," said Newsom.
Newsom is using tax-payer dollars to start the process. Of the $100 million, $50 million will go toward the development of low-cost insulin products, and an additional $50 million will go towards a California-based insulin manufacturing facility.
This facility will also provide high-paying jobs and a stronger supply chain for the drug, according to Newsom.
Newsom said the cost of insulin would, at minimum, be cut in half by developing and manufacturing the drug in the state.
"Insulin has been the poster child for all that is wrong in the pharmaceutical markets," Dr. Geoffrey Joyce said.
The price of insulin is high because it can be because Joyce said there are only three major makers.
Joyce is the chair of the Department of Pharmaceutical and Health Economics at the USC School of Pharmacy. His research focuses on the costs of medical care and the role of insurance.
“Insulin is a what's called a biologic," He explained. "It is made from a living thing, and so even though it was developed about 100 years ago, we don't have quite a perfect generic copy of it because each batch is going to be a little different."
That's why he said the companies can hold a monopoly over it.
"These three major manufacturers say, ‘hey, our stuff is is trusted and biologic, there's no FDA approved generic until very recently for this, and it's even not a perfect generic.”
California wants to change that by creating a bio-similar version of insulin in the state.
“Therefore, the supply chain is not dependent on overseas production, which some of this is,” he added is a benefit.
$100 million is a cost Joyce said will start to pay itself back in several other ways.
“If you're fortunate enough to qualify for medical, your insulin costs are not too high. The problem is, the state is paying a fortune, right? Because they're paying these exorbitantly high prices, and that comes out of taxpayers bills. So we all pay for that indirectly,” said Joyce.
Newsom promised this his first day in office years ago, producing prescription drugs in California. There is no timeline yet though for when the program will begin.
California is the state with the highest diabetics rate, according to the Governor's office. Joyce believes it will start off with Californians, but doesn’t see why California wouldn’t sell insulin to other states eventually. Other states may start producing their own too if its successful in California.
In California, about 3.2 million people have been diagnosed with diabetes, according to the American Diabetes Association. Every year nearly 273,000 people are diagnosed with diabetes.
Also, people with diabetes pay around 2.3 times more in medical expenses than those without diabetes. Diagnosed diabetes costs about $39.5 billion in California each year.
Here are tips from The California Department of Public Health to prevent and maintain diabetes symptoms.
Read about the more than $300 billion state budget, which includes money to cover abortions, health care for undocumented immigrants, and inflation relief payments.
WATCH RELATED: Gov. Newsom announces plan to have California create its own insulin (July 2022).