California is joining with a New Jersey company to make a generic opioid overdose reversal drug

California will soon begin selling its own generic version of Narcan — the drug that can save someone's life during an opioid overdose — under a deal announced Monday by Democratic Gov. Gavin Newsom as part of his effort to offer less expensive, state-branded options of medication.

The New Jersey-based Amneal Pharmaceuticals will sell naloxone to California for $24 per pack, or about 40% cheaper than the market rate. California plans to give away many of the packs for free to first responders, universities and community organizations through the state's Naloxone Distribution Project.

But it will also sell some of the packs at the discounted rate to California businesses and local governments — as long as they agree not to mark up the prices and sell it for a profit. The goal is to expand the distribution beyond schools and public health departments and into places including restaurants, entertainment centers and ride-hailing services such as Uber and Lyft.

“Anywhere that has a first aid kit, we hope that this product will be available as part of that,” said Elizabeth Landsberg, director of the California Department of Healthcare Access and Information, which is overseeing the program.

The naloxone nasal spray will be the first drug to carry the CalRx label, Newsom's effort to force drug companies to lower their prices by offering much less-expensive competing versions of life-saving medication. Newsom first announced this idea in 2019, and signed a law giving California the authority to do it in 2020.

This isn't the first time California will have made its own medication. Since 2003, the California Department of Public Health has manufactured a treatment for the rare disease of infant botulism. But state officials say they believe California will be the first state to distribute a generic medication under a state label.

“Federal and state governments can and should use their power as regulators and as purchasers,” said Anthony Wright, president of the consumer advocacy group Health Access California. "Americans paying out-of-pocket for prescription drugs pay more than anyone else in the world, but if government can use our collective power of the purse through direct contracts and manufacturing, we can get better deals not just for taxpayers, but patients and the public as a whole.”

Naloxone has been available in the U.S. without a prescription since March of 2023, when the U.S. Food and Drug Administration approved Narcan, a nasal spray brand produced by the Maryland-based pharmaceutical company Emergent BioSolutions.

Amneal Pharmaceuticals makes a generic equivalent to Narcan that won FDA approval last week.

The naloxone packs purchased by California initially will be available under the Amneal label. The naloxone will move to the CalRx label once it's approved by the U.S. Food and Drug Administration, a process the Newsom administration said could happen by July.

“We’ve enabled through CalRx the manufacturing of a low-cost (over the counter) Naloxone option that without us may not have come to market this quickly or at this volume,” said Dr. Mark Ghaly, secretary of the California Health and Human Services Agency.

The deal is significant because it means California will be able to buy a lot more naloxone — 3.2 million packs in one year instead of 2 million — for the same total cost.

Opioid overdose deaths, which are caused by heroin, fentanyl and oxycodone, have increased dramatically in California and across the country. Annual opioid overdose deaths in California more than doubled since 2019, reaching 7,385 deaths at the end of 2022.

California began giving away naloxone kits for free in 2018. State officials say the Naloxone Distribution Project has given out 4.1 million kits, which have reversed a reported 260,000 opioid overdoses. The money has come from taxpayers and portions of a nationwide settlement agreement with some other pharmaceutical companies.

Last year, California lawmakers agreed to spend $30 million to partner with a drug company to make its own version of naloxone. But they ended up not needing to spend that money on this deal, since Amneal Pharmaceutical was already so far along in the FDA approval process it did not require up-front funding from the state.

Instead, California will use a portion of the revenue it receives from a national opioid settlement to purchase the drugs.

Naloxone is just one drug the Newsom administration is targeting.

Last year, California signed a 10-year agreement with the nonprofit Civica to produce CalRx branded insulin, which is used to treat diabetes. California has set aside $100 million for that project, with $50 million to develop the drugs and the rest set aside to invest in a manufacturing facility. Newsom said a 10 milliliter vial of state-branded insulin would sell for $30.

Civica has been meeting with the FDA and “has a clear path forward,” the Newsom administration said.

“As we continue the effort to bring $30 insulin to the market, the state is now set to purchase life-saving naloxone for almost half of the current market price — maximizing taxpayer dollars and saving more lives with this miracle drug,” Newsom said in a statement provided by his office.