State lawmakers take up bills aiming to ‘revolutionize the insulin market’

Lawmakers in Lansing began considering bills last week that would allow the state to partner with a private manufacturer to produce and distribute low-cost generic insulin. 

The state House Health Policy Committee heard testimony from the backers of two bills that would require the Michigan Strategic Fund to create an insulin production program and offer $150 million to help develop a manufacturing facility. 

Backers of the bipartisan bills say a public-private partnership could produce and sell generic insulin that costs far less than what consumers pay today. 

Rep. Curtis VanderWall, a Republican from Ludington, estimates a state-owned insulin brand would cost as low as $50 for a month’s supply — a fraction of the nearly $650 a month one witness at Wednesday’s legislative hearing said she has paid out of pocket to control her diabetes. 

The price for a generic insulin produced through a public-private partnership could eventually go down to $35 a month, VanderWall said. 

“It’s no secret: Insulin prices have been too high for far too long. We’ve all heard about the horror stories of people who can’t afford their insulin, so they end up either selling personal belongings or, worse yet, try to ration it, skipping doses and causing long-term problems,” VanderWall told colleagues on the Health Policy Committee. “The demand of insulin is high, and we’ve been trying for years to find a workable cost-effective solution to lowering prices. We owe it to our people to provide stability.” 

The two bills “would put Michigan on the cutting edge of health care solutions in the nation and revolutionize the insulin market” by creating a framework for the state to contract with a generic insulin producer for a production facility, VanderWall said. 

A state partnership to produce insulin would lower prices without artificial price controls, which efforts at both the state and federal levels have sought to impose through caps on out-of-pocket costs for consumers. 

“The key part of this legislation is that the state of Michigan will own the drug label, making it automatically available to people on both public and private insurance without the added cost of being involved with the pharmacy benefit manager,” he said. “In fact, pharmacy benefit managers won’t be allowed to restrict access to this drug at all. No markup, no rebates, no games, just affordable quality.” 

VanderWall’s House Bill 4890 would direct the Michigan Strategic Fund to issue a request for proposals for a producer to develop and open a production facility in the state to make and distribute a U.S. Food and Drug Administration-approved insulin. The Michigan Strategic Fund could offer a grant of up to $150 million to support creating a production facility in the state.  

H.B. 4890 and a companion bill, H.B. 5519 that’s sponsored by Rep. Jennifer Conlin, a Democrat from Washtenaw County, also would establish annual reporting requirements to the governor and state Legislature. 

The bills would put into state law an idea that Gov. Gretchen Whitmer first pitched in an October 2022 executive order and that she later included in a budget proposal for the 2024 fiscal year. The idea never made it into the final state budget, leading lawmakers who back the concept to propose legislation last summer. 

In her original executive order directing state agencies to examine potential solutions to the high costs for insulin, the governor cited how prices have increased 600% over the last decade. 

Blue Cross Blue Shield of Michigan, the Michigan Association of Health Plans, the Michigan Manufacturers Association, the Michigan State Medical Society, and the American Diabetes Association indicated support for the bills, according to Rep. Julie Rogers, a Democrat from Kalamazoo who chairs the House Health Policy Committee. Representatives from the pharmaceutical industry have indicated opposition, Rogers said. 

Among the lawmakers who voiced support at Wednesday’s committee hearing was Rep. Carol Glanville, a Democrat from Walker. 

“I love the concept of this,” Glanville said. “I think in terms of innovation as you talk about what we can bring as new solutions to health care, it’s a great, great concept.” 

VanderWall, a conservative Republican who ordinarily advocates for free markets and opposes government involvement in private markets, does not view a state-owned facility operated with a private-sector partner as competing with the pharmaceutical industry. He views the legislation as “an opportunity as a state to provide a life-saving drug that we’re seeing” that has become “very expensive,” resulting in a “huge burden” for people who need it to manage their diabetes.  

“If we want to say it’s in competition, certainly, I guess you could look at it that way,” he said. 

Support for the bills also came from a nonprofit generic drug manufacturer that’s backed by philanthropy and investments from major health systems, including partners from Michigan. 

Civica Rx has several generic drugs in the development pipeline and plans to sell generic insulin for no more than $30 per vial of insulin and $55 for a box of five insulin pens. 

“Our intent with this pricing strategy is both to offer low priced insulin directly to consumers but also to create competition in the marketplace that will lead other insulin manufacturers to lower their prices,” Allan Coukell, public policy leader at Civica Rx, told lawmakers. 

A manufacturer outside of the U.S. produces “raw” insulin for Civica Rx that goes into pens and vials produced at a facility in Petersburg, Va., but “we would very much like to bring that part of the manufacturing process back to the U.S., and if Civica were the private sector contractor selected … we would be able to do so,” Coukell said. 

“We have assessed the current U.S. landscape and there is a need for more insulin manufacturing capacity in the U.S.,” he said. 

When Civica Rx formed five years ago, its early investors included Blue Cross Blue Shield of Michigan and 17 other Blues plans across the country, plus health systems Corewell Health and Trinity Health.