California has teamed up with a pharmaceutical company based in New Jersey to procure a generic version of Narcan, an opioid overdose reversal drug, in a deal announced by Governor Gavin Newsom on Monday. Amneal Pharmaceuticals will sell naloxone to California for $24 per pack, approximately 40% cheaper than the market rate. The state will distribute these packs for free to first responders, universities, and community organizations through its Naloxone Distribution Project.

This partnership is significant as it allows California to purchase a larger quantity of naloxone—3.2 million packs in one year instead of 2 million—for the same total cost. Additionally, naloxone will eventually be available under the CalRx label, a program proposed by Newsom in 2019 to compel drug companies to reduce prices by offering more affordable, competing versions of life-saving medications. Newsom signed a law in 2020 granting the state this authority.

California governments and businesses will have the option to purchase naloxone outside of the Naloxone Distribution Project, with plans in progress to make it available for individual sale as well.

Governor Newsom highlighted the impact of CalRx, stating, “California is disrupting the drug industry with CalRx—securing life-saving drugs at lower and transparent prices.”

Naloxone has been available in the U.S. without a prescription since March 2023, following the FDA’s approval of Narcan, a nasal spray produced by the Maryland-based company Emergent BioSolutions.

Amneal Pharmaceuticals has developed a generic version of Narcan that received FDA approval last week.

Initially, the naloxone packs purchased by California will bear the Amneal label. They will later be rebranded under the CalRx label once approved by the FDA, a process that the Newsom administration indicated could take several months.

Opioid overdose deaths, resulting from substances like heroin, fentanyl, and oxycodone, have surged in California and nationwide. In California, annual opioid overdose deaths more than doubled since 2019, reaching 7,385 deaths by the end of 2022.

California initiated the distribution of free naloxone kits in 2018. State officials report that the Naloxone Distribution Project has distributed 4.1 million kits, which have reversed around 260,000 opioid overdoses. Funding for the project has come from taxpayers and portions of a nationwide settlement agreement with certain pharmaceutical companies.

Last year, California lawmakers allocated $30 million to collaborate with a drug company to produce a state version of naloxone. However, this funding was not utilized for the current deal, as Amneal Pharmaceuticals was already in an advanced stage of the FDA approval process and did not require upfront funding from the state.

Instead, California will utilize a portion of the revenue obtained from a national opioid settlement to procure the drugs.

Naloxone is just one of the drugs targeted by the Newsom administration.

Last year, California entered into a 10-year agreement with the nonprofit Civica to manufacture CalRx branded insulin for diabetes treatment. California has allocated $100 million for this initiative, with $50 million designated for drug development and the remainder reserved for investment in a manufacturing facility. Governor Newsom stated that a 10 milliliter vial of state-branded insulin would be priced at $30.

Civica has been in discussions with the FDA and “has a clear path forward,” according to the Newsom administration.