Civica partnership linking Mayo Clinic, leading hospitals, foundations, to sell generic insulin cheap

ROCHESTER, Minn. — Contingent on approval by the Food and Drug Administration, cheap insulin is coming to pharmacies in 2024.

The affordable insulin will be produced by Civica, a nonprofit generic drug manufacturer based in Utah.

The company is an initiative launched in 2018 by a roster of supporting philanthropies and 55 leading health systems, including Mayo Clinic.

The insulin products will carry a suggested price cap of $30 for a vial, $55 for a box of five pen cartridges, or roughly $55-$75 a month, according to an average usage estimate provided by Civica.

The product acquisition system will directly link the manufacturer to retail pharmacies, with no price discounting by payers or intercession by pharmacy benefit managers.

Civica CEO Martin VanTrieste said on-patent insulin can easily run over $400 monthly, suggesting the company's coming product launch will steeply undercut out-of-pocket costs for on-patent products currently shouldered by uninsured or under-insured patients.

"From what we see in the marketplace, our insulin will be 90% cheaper than what's (there) today," said VanTrieste. "...We're going to provide quality low cost insulin to any consumer in the United States...Whoever needs insulin can get it from us."

The manufacturer announced the news in a statement that identified the three so-called analog insulins as newly- or soon-to-be generic drugs glargine (brand name Lantus), lispro (brand name Humalog), and aspart (brand name Novolog).

Insulin prices have been rising at steep rates in recent years, causing patients to take less than needed or go without.

An October 2020 study by the Rand Corporation reported that American insulin prices are more than 8 times higher than in 32 comparison nations. A 2018 report by the American Diabetes Association reported that high prices leads to patients rationing their insulin.

"I call it the insulin crisis," said Van Trieste. "...We saw that the marketplace is not going to fix itself."

The announcement marks the first Civica product directly available to consumers, and the first biologic manufactured by the nonprofit, which otherwise operates through a membership model specifically created by a coalition of interests to address shortages of common generic drugs sold for in-hospital use.

Since 2018, Civica says it has sold its 1500 member hospitals low-cost versions of 60 generic injection drugs previously subject to shortages, including 11 drugs used by hospitals to care for patients with COVID-19.

"Mayo received its first shipment from Civica in 2020, when pandemic started," said Eric M. Tichy, who is vice chair of Pharmacy Formulary, Mayo Clinic Health System, and a member of the Civica Drug Selection Advisory Committee. "I'd like to think the shortages of drugs during the pandemic would have been a lot worse had we not had Civica."

Participating Civica member hospitals pay a one-time fee in order to purchase from its line of low-cost generic hospital medications. The goal, Tichy said, is to turn insulin and generic drugs "into a utility —where the price is very stable and you don't have to think about it."

Van Trieste calls the marketplace for older generic drugs prior to Civica "a broken economic model, caused by a race to the bottom on price."

In contrast, he says, the insulin marketplace had no incentive to control prices.

"There's an oligopoly of insulin production between three manufacturers, three primary wholesalers, and three pharmacy benefit managers that distribute insulin through the supply chain," he said.

"There isn't real competition to keep prices low and the price keeps escalating. There's a debate on who is the culprit...At the end of the day, the patient doesn't care why prices are so high. The patient needs to afford their insulin."

"Insulin is a complex molecule," says Tichy. "It really shows Civica going in a different direction than just the small molecules" of previous products. "It's a big expansion of their capabilities."

Tichy also calls the news a victory for access to care.

"Diabetes is one of those diseases that really affects a lot of people that are economically disadvantaged. There's a disproportionate amount of diabetes in people who are African American and Hispanic population, so there's also a health equity aspect to it that's very important To me that's something where Civica is moving beyond helping just hospitals to helping the broader community."

Tichy says he doesn't anticipate negative market repercussions from the introduction of a cost-cutting nonprofit.

"My observation is that it improves market behavior, because other people in the industry have adopted some of things Civica is doing, like holding six months of safety stock in the supply channel...The industry had moved into a just-in-time process where the entire channel had three month supply."