California to sell state-branded Narcan generic to cut costs

California has said it will start selling its own generic version of overdose reversal agent naloxone in another example of the use of government-level purchasing power to reduce drug prices in the US.

The state’s Democratic governor Gavin Newsom has reached a deal with generic drugmaker Amneal Pharma to supply a nasal spray formulation of naloxone – the active ingredient in Emergent BioSolutions’ Narcan – at a 40% discount to the brand.

Twin packs of the product costing $24 will be distributed under the CalRx brand for free to qualifying organisations, like first responders, universities, and community organisations, and will be sold to California businesses and local governments - provided they do not sell them on at a profit.

The discount means that California will be able to acquire 3.2 million twin-packs of naloxone instead of the 2 million twin-packs purchased at the previous price, helping the state manage an opioid crisis that claimed around 7,000 lives in 2022, according to a statement from the governor's office.

The latest deal comes a few months after California unveiled the CalRx project with a $50 million contract with non-profit pharma manufacturer Civica to produce affordable insulin within the state, with plans to extend that to include insulin analogues like insulin glargine, aspart, and lispro. The state also sued the ‘big three’ insulin makers – Novo Nordisk, Eli Lilly, and Sanofi – accusing them of working together to set artificially inflated prices for their products.

“California is disrupting the drug industry with CalRx, securing life-saving drugs at lower and transparent prices,” according to Newsom, who signed an executive order to introduce the programme on his first day in office. “People should not be forced to go into debt to get lifesaving prescriptions.” The naloxone product will be the first to be sold using a CalRx label.

The governor said that the drive plans to leverage California’s power as the world’s fifth-largest economy to find other ways to drive down the cost of medicines in the state. At the federal level, the US government is also drawing on purchasing power with its scheme to negotiate the prices of certain medicines reimbursed by Medicare, which is being challenged by the pharma industry.

The naloxone deal has been announced just a few days after Amneal secured FDA approval for its over-the-counter naloxone nasal spray from the FDA, a generic of Emergent’s OTC product that was launched last year at a list price of $45 per pack.

According to IQVIA, US annual commercial sales for Narcan for the 12 months ended February this year were $266 million.