Earlier this year, Eli Lilly announced a 70% price reduction on its most common insulins—the cost of which had risen up to nearly $300 per vial. Novo Nordisk and Sanofi, the other major insulin manufacturers for the U.S., followed suit. This is following a 290% increase in list prices for these drugs over the past decade. The unprecedented move can be credited in part to a new market force:
Last year, in partnership with Blue Cross and Blue Shield companies, Civica announced it would manufacture and distribute insulin for no more than $30 per vial.
Civica is a nonprofit organization with a simple mission: to ensure that essential medicines are available and affordable to everyone.
“The idea for Civica came to me in 2016, when Martin Shkreli and the EpiPen stories were happening,” says Civica’s lead architect and Board chair, Dan Liljenquist. “They were raising prices. They were ripping off patients. And the thing that bothered me the most was they said, ‘Hey, this is just how markets work.’ And I thought, no, that's not how they should work.”
That same year, at Blue Shield of California (BS CA), the Shkreli story had a similar impact on Andy Chasin, then director of public policy. “We saw venture capital companies just buying old-line drugs that were really important for our members and making prices so high they were no longer affordable,” says Chasin. “I remember talking to a colleague and saying, ‘You know, what we need is a nonprofit drug company. Somebody who could intervene when these things happen.’”
So when he saw an article in The New York Times announcing the launch of nonprofit drug company Civica, he took action. “I called Dan Liljenquist. I said, ‘Dan, I saw this. This is an amazing idea. We need to do this for our members.’”
At the time, Civica was focused on essential medicines needed in emergency rooms, surgeries and other hospital settings. Chasin was proposing the manufacture and distribution of prescription drugs that are sold at the pharmacy.
“I’ve been waiting for this call,” Liljenquist replied.
A Nationwide Partnership
The next call Liljenquist received was a similar one from Blue Cross of Idaho (BC Idaho).
“As Idaho's leading health insurer, we are driven to bring down the cost of care and prescription drugs,” says Drew Hobby, executive vice president and chief revenue officer for BC Idaho. “It's why we reached out to other Blues about starting a national partnership to combat skyrocketing drug costs. We are proud to be a founding partner."
United by a shared mission to make prescription drugs more affordable, 19 BCBS companies, joined by BCBSA, committed $55 million to support this venture.
“We had the opportunity to make these drugs affordable for everyone, not just our members,” says Chasin, now Blue Shield of California’s Vice President of Federal Policy and Advocacy. "What I think is really unique about the partnership with Civica is that we are making these drugs available for everyone in America, whether or not you are a member of a Blue Cross Blue Shield company, whether or not you have insurance. It’s the right thing to do. That's why we did it.”
Today, Civica provides nearly 80 quality generic drugs, including those to help treat prostate cancer. The company is nearing operational readiness at its new, state-of-the-art facility in Virginia, where it will manufacture three insulin biosimilars corresponding to Lantus, Humalog and Novolog. These medications have a clear path toward FDA approval, and when they hit the market as anticipated, they will be no more than $30 per vial. That price does not require insurance.
Regarding promises from Eli Lilly, Novo Nordisk and Sanofi to lower list prices on insulin, Liljenquist says, “They were signaling that they heard us. By indicating we were committed to entering the market to make insulin affordable for good, we’ve made an impact on the market.”
BCBS companies currently participating in the Civica partnership include:
Blue Cross and Blue Shield of Alabama, Arkansas Blue Cross and Blue Shield, Blue Shield of California, Capital BlueCross, CareFirst BlueCross BlueShield*, Excellus BlueCross BlueShield*, Blue Cross and Blue Shield of Hawaii, Highmark Blue Cross Blue Shield, Horizon Blue Cross Blue Shield of New Jersey, Blue Cross of Idaho, Independence Blue Cross, Blue Cross and Blue Shield of Kansas, Blue Cross and Blue Shield of Kansas City, Blue Cross Blue Shield of Michigan, BlueCross BlueShield of Western New York and BlueShield of Northeastern New York, Blue Cross & Blue Shield of Rhode Island, BlueCross BlueShield of South Carolina, Blue Cross and Blue Shield of Vermont and the Blue Cross Blue Shield Association
The Blue Cross and Blue Shield Association is an association of independently owned and operated Blue Cross and Blue Shield companies. Read more about how BCBS companies are promoting affordable health care.