Utah nonprofit to upset insulin market by selling it with the lowest price tag possible

MURRAY — Civica Rx, a Utah-based nonprofit company, is starting an initiative to lower the price of insulin by up to 80%, saving some people with diabetes thousands of dollars each month by offering insulin at a fair price.

In a press conference on Tuesday, Dan Liljenquist, board chairman at Civica Rx and Intermountain Healthcare chief strategy officer, said the company will not make a penny off of the sale of insulin. The company expects to begin offering the products in 2024, after it receives U.S. Food and Drug Administration approval.

Liljenquist said that the cost of manufacturing insulin has not risen, but the price has gone up 11% every year for the last 20 years, because people in the insulin supply chain are taking advantage of people who need insulin to survive. The market structure and large rebates allow for the cost of insulin to keep rising, Liljenquist said.

"We will not play that game," he added.

Civica Rx, which seeks to reduce the cost of medications and make them more available to patients, announced last Thursday that it plans to manufacture insulin at a new factory in Virginia. The goal is to charge no more than $30 for a vial of 10 milliliters of insulin, and no more than $55 for a five-pack of 3-milliliter FlexPath pens. This is an 85% to 90% reduction of the current prices.

Liljenquist said he thinks the costs could be even cheaper, and that Civica Rx plans to keep its insulin at the lowest possible price to keep the company running. He said its packages will include a suggested price on the box, to help keep the price low until the product gets to the consumer.

"We want to very clearly signal ... what a fair price is," he said. "Because of that transparency, we hope to reset the market price."

Liljenquist said the Utah group is determined to change the insulin market so that people who need insulin every day do not need to worry about the affordability — on top of the health challenges that they face.

"These insulin molecules are well past their patented life, and we're intending to produce these insulins so that these formulas, which are owned by society, enter the public domain within use of regular people," Liljenquist said.

Katherine Stewart was diagnosed with diabetes when she was 5 years old. She is now 16 and she said, to stay healthy, she takes between six and 10 shots of insulin every day, a number that varies due to food, weather, stress, activity levels and many other things. Her mom, Brandi Stewart, said Katherine's insulin costs about $2,000 a month until the family meets its insurance deductible, and $500 a month afterward.

There are about 56,000 people in Utah who use insulin regularly, and 11.5 million around the country, according to Intermountain Healthcare. Not all of these people have access to the insurance that the Stewart family has.

Brandi Stewart, who is an advocate for people who have diabetes, said there are people who have to sacrifice a lot to be able to pay for their life-saving insulin, and the payment can sometimes be high enough that it is comparable to a mortgage. Stewart said she knows of one family with three diabetic children that paid $11,000 for insulin before meeting a high deductible.

Stewart also knows patients who have needed to ration heat, eat only inexpensive canned food and/or take a second job so that someone in the family can have insulin.

"We literally have people dying in our country because they can't afford the medicine," Stewart said.

She said that this initiative providing insulin at a price that is more affordable will change millions of lives, especially people who struggle to afford a medication that keeps them alive.

Katherine Stewart said that at 16 she had already started to worry about what she will do when she is in college and no longer on her parent's insurance plan; she said that she and other young people with diabetes should not have that stress at such a young age. This initiative is already giving her relief.

Liljenquist said that because insulin has become so unaffordable, about a quarter of the people who need insulin are rationing because of affordability. Rationing insulin can lead to heart disease, strokes, peripheral neuropathy, kidney failure, blindness and other complications of diabetes.

"Diabetes is arguably America's most expensive chronic condition and it is heartbreaking that millions of people are rationing their care and putting their lives at risk because they can no longer afford insulin," Liljenquist said

He said there have been other efforts to make insulin, but that the off-brand options are hard to find because insurance companies will choose not to cover them because of the rebates available with other, more expensive options.

Liljenquist said that Civica has already been working with health insurance companies around the country to encourage coverage of its new insulin products. He said there are already more than 140 million people covered by payers who are involved in the Civica Rx project.

The Virginia facility will have enough production capacity to make insulin for about one-third of the market in the United States, with capacity to increase production.

"We will make as much insulin as necessary to make sure that people can get a fair price. We expect the market to respond," Liljenquist said.

He said he hopes other manufacturers find a way to participate in the market fairly along with them.

Liljenquist said that Civica Rx only intervenes in a pharmaceutical market when there is a clear market failure and patients are being hurt — which he said is the case with insulin. The company anticipates the price of its insulin will be low enough that even people who are able to get insurance to cover some of their insulin, like the Stewart family, will opt to purchase its product through online pharmacies.

"It will unstitch the rebate game for insulin, and that's exactly what we intend to do, so that the patients, who are the ones paying the cost of those rebates, actually get to pay a fair price upfront," Liljenquist said.

He also said Civica Rx is seeking interchangeability in its FDA application, which means that pharmacies can substitute their insulin when a doctor writes a prescription for the name-brand option, something that has not happened yet for fast-acting insulins.

Civica Rx will manufacture three types of insulin, which correspond with the available brand name insulins: Lantus, Humalog, and Novolog. These will be offered in vials and disposable pens at pharmacies that agree to not charge more than the recommended price.

Intermountain Healthcare helped launch Lehi-Based Civica Rx in 2018 to make essential medications used in hospitals more available and affordable to everyone, and prevent drug shortages and price spikes. The company now includes 1,500 hospitals around the country, and the 60 medications it has already produced have been used by millions of patients, primarily in hospitals.

These Civica medications include 11 which have been used to help COVID-19 patients including neuromuscular blocking agents, sedatives, pain management medications and blood thinners.

Gov. Spencer Cox tweeted about the announcement last week that Civica Rx will start manufacturing insulin, calling it huge news.

"Families should never have to choose between life-saving medicine and things like food or housing. This is an incredible partnership and we are once again proud to see Utah companies leading the way," Cox said.

Utah GOP Rep. John Curtis said in a statement, "I am heartened to hear that a Utah company is innovating to deliver this drug at an affordable out-of-pocket price. I remain committed to working on long-term solutions that support the pharmaceutical industry in reducing prescription drug prices, and I applaud Civica for their work to transparently do so. We must harness American innovation to bring affordable medications to the marketplace."

Correction: A previous version misspelled Katherine Stewart's name as Catherine.

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