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#  Newsom’s Insulin

March 30 2023

Written by Jef Kurfess.

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GUEST COMMENTARY - Gov. Gavin Newsom announced a new $50-million contract with the nonprofit generic drugmaker Civica to produce insulin under the state’s own label during a news conference Saturday in Downey. [LA Times article.](https://www.citywatchla.com/Newsom%20announces%20$50-million%20contract%20to%20make%20California's%20own%20brand%20of%20insulin%20-%20Los%20Angeles%20Times%20(latimes.com))

Hmmm. Would you think from this that Newsom was getting insulin for the state? Would you think that Civica was an established pharmaceutical company, ready to produce insulin for the state? Would you think that the $50 million was going to buy insulin?

I sure did. But then, I’m from a skeptical generation. There’s an old story about two economists walking down the street. One says to the other: “Wow, did you see that $20 bill on the sidewalk?” The other older, wiser, economist doesn’t even look and says: “No, there is not. If there were, someone would have picked it up already.” I figured that if there were a way to profitably make and sell generic insulin, someone would have already done it. So, call me skeptical that Newsom could pick up the phone and find someone to do it for him, so he could undercut the rapacious pharma industry.

So, I did a little research (which, in an earlier age, would have actually been done by the LA Times reporters themselves, but that might not have supported their narrative).

Newsom’s $50 million deal is with a company called Civica. I did a little ADHD’ing around the internet and found that they are essentially a non-profit,co-operative sourcing organization, founded in 2018. They appear to line up sources of some pharmaceuticals for the benefit of a consortium of hospitals. They don’t actually make anything, let alone insulin.

So, where would Civica get the insulin that would be supplied to California through Newsom’s deal? Civica has an arrangement with a company called Ypsomed AG, a public Swiss company, to supply the injectors near term. And they are building a plant in Petersburg, VA intended to produce injectors and insulin for California. This is supposed to open in early 2024. Here is a link to a recent article from the [Richmond (VA) Times-Dispatch](https://richmond.com/business/local/insulin-civica-gavin-newsom/article_40a8c154-c731-11ed-8bca-7f2d9187afc3.html).

There is a key line in this article:

“The $50 million already committed by California is a pre-launch contribution to the overall costs of bringing insulin to market, Ford said.”

So, now we know what the $50 million buys. It doesn’t buy insulin. It is venture capital supplied by the state’s taxpayers.

Who is developing the insulin? The “developer” is a company called Genesys Biologics.

[GeneSys Biologics](https://www.genesysbiologics.com/)

This company is based in India and appears to be ***working on and planning to make*** insulin, but does not appear to have the ability to do so yet. What they do have is a very primitive website. They don’t even give bios of the personnel involved with the business. Under the heading “Who We Are”, we read:

“Started by a small group of passionate biopharma veterans, driven by a purpose to solve the decades old problem of inaccessible insulins across the globe. For us, it is personal, challenged the status quo and make all efforts to make the inaccessible, accessible.”

 If you click on their “Media” tab on the website, the only news is the deal with Civica. Under “Partnerships”, they mention only Civica.

OK, so it sounds like Newsom signed some kind of deal, obligating the state to pony up $50 million to help get a noble sounding venture off the ground. I had to ask an obvious question, not being inclined to think there was a $20 bill on the pavement that someone hadn’t already picked up:

How hard is it to make generic insulin? I stumbled on the article linked below:

[Why Is There No Generic Insulin? (healthline.com)](https://www.healthline.com/diabetesmine/why-is-there-no-generic-insulin)

It turns out it is hard to make generic insulin. I consulted with a friend who just retired from a major pharmaceutical company and she was highly skeptical that this venture would have insulin, approved, and ready to distribute, in less than 5 years.

Does anyone know when Newsom is going to hand over the money and what we get for this venture capital stake? It’s very expensive PR, if that’s all it is.

*(Jef Kurfess is a retired management consultant who enjoys researching topics that seem under-investigated by the media.)*

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