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State sponsored onshoring of insulin manufacturing - a new competitive threat?

Written by Christophe Parrot (PrimeIntel Partners)
31 March 2023

Governor Gavin Newsom of California has announced a new partnership with Civica, a non-profit drug manufacturer, in an effort to create its own line of insulin and reduce the cost of the drug. Under the ten-year agreement worth $50 million, Civica will produce three forms of insulin once approved by the Food and Drug Administration. The new "CalRx" insulin will cost no more than $30 per 10 millilitre vial or $55 for a box of five pre-filled pen cartridges for both insured and uninsured patients. Patients who pay for insulin out-of-pocket could save up to $4,000 per year. The state-label insulin will be available nationwide, making it a significant step towards making insulin more affordable. The initiative is part of California's broader CalRx initiative to produce generic drugs under the state's own label.


On February 03, 2022, Civica entered into a co-development and commercial agreement with co-development partner - Genesys Biologics pvt ltd, based in Hyderabad, India ("GBPL") for three insulin biosimilars, namely glargine, lispro, and aspart. Civica will utilize the drug substance produced in collaboration with GBPL and will hold the exclusive rights to market and sell these insulins in the United States at significantly lower costs than the current market rates. In return, GBPL will receive payment from Civica in the form of capital assistance and milestone payments for the commissioning of the proposed facility. As of March 31, 2022, GBPL had received Rs.90.59 crore. The company is targeting to complete the project by Q4FY24, and the first full year of operations will be in FY25. Profil based in Neuss, Germany, as its clinical trial partner to support the development of its affordable insulins. Alcami's network of laboratories across the United States will support Civica's program with method establishment, validation, release, and stability for excipients, drug substances, and drug products, in addition to formulation development support.

Eli Lilly, Novo Nordisk, and Sanofi make up over 90% of the global insulin market

As of March 2023, Eli Lilly, Novo Nordisk, and Sanofi, the major manufacturers of insulin globally, have declared a price drop of 70%, 75%, and 78%, respectively, for their frequently prescribed insulins in the United States. The price reductions will go into effect in the first quarter of 2023 for Lilly and on January 1, 2024, for Novo Nordisk and Sanofi. These three companies together dominate over 90% of the insulin market worldwide. The Virginia plant is built and equipped, but Mr. McCoy (President and CEO of Civica) said that 2023 is about focusing on hiring workers, making batches of its products and filing abbreviated new drug applications to the FDA. The next phase of this new partnership with California includes finding an appropriate spot for an insulin manufacturing facility in California, developing a workforce and starting production.


The new model described above shows a distinct change in strategy and approach by Civica that relies on the following business partners to date for its manufacturing of US focused drugs currently and they do not appear to be participating in the reshoring business model.

  • Istuto Biochimo Italiano (Italy),

  • Savior Lifetec (Taiwan),

  • Xellia Pharmaceuticals (Denmark, India),

  • American Regent Inc (USA),

  • Hikma Pharmaceutical (USA, Portugal),

  • Gland Pharma (India),

  • Sandoz Manufacturing (Canada),

  • Cipla Limited (India),

  • Amneal Pharmaceutical (India),

  • Astral Steritech (India),

  • Baxter (Germany, India),

  • Capline Steriles (India) for Baxter distributed by Civica,

  • Biological E. Limited (India),

  • Corden Pharma S.p.A. (Italy) for Pfizer distributed by Civica, and

  • Patheon Italia Spa (Italy)

The above partners would already have agreements in place with Civica, and the reshoring move shows a new and unique business model for Civica, one which competitors ought to be aware of and respond to appropriately.


Civica Rx's unique business model is centred on addressing the inefficiencies and gaps in the healthcare supply chain by establishing partnerships, leveraging technology, and creating a sustainable model that benefits patients. By providing affordable access to essential drugs, the organization aims to improve patient outcomes and reduce the financial burden on patients and the healthcare system.


As a labeller, distributor, and manufacturer of generic drugs, Civica Rx ensures that the drugs meet their quality standards and are priced affordably for patients. By working directly with manufacturers and healthcare providers, Civica Rx is able to negotiate contracts for large volumes of drugs, which helps to lower costs and increase availability. This approach enables patients to access the medications they need to manage their health conditions and improve their quality of life.


Our recommendations

Most experts agree that reshoring of pharma companies is important. However, you need to ensure sourcing from multiple suppliers to avoid shortages in supply of key product components. We recommend active monitoring of the manufacturing capacity of offshore active pharmaceutical ingredient suppliers. In addition, you should monitor the business environment locally to ensure that the service to patients takes into account the possible changes that impact the drug delivery services to patients.


For a confidential discission on Pharma related insights, please feel free to contact Christophe at https://www.primeintelpartners.com/about


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