In a nationwide first, California is creating a pathway that could allow the state government to produce and distribute its own generic drugs.
Gov. Gavin Newsom signed into law Monday a plan that directs the state’s Health and Human Services Agency to look at potential partnerships with drugmakers to try to increase access to affordable medicines. California won’t be developing the drugs themselves, but rather they would attempt to distribute ones with expired patents that received FDA approval.
The main goal is to “increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers,” according to the text of the law.
Newsom specifically directed the agency to include “at least one form of insulin” when conducting its search, which is used by about 7.4 million Americans to treat diabetes. No other drugs or therapies were mentioned by name. The list price of insulin nearly tripled between 2002 and 2013, according to an analysis by the American Diabetes Association.
“California is using our market power and our moral power to demand fairer prices for prescription drugs,” Newsom wrote in a statement, per the Sacramento Bee. “I am proud to sign this legislation affirming our ground-breaking leadership in breaking down market barriers to affordable prescription drugs.”
How exactly California plans to fund this program — and how much money it might bring in — remains largely unknown. The law does not specify how the state agency should go about seeking out collaborations, and the agency’s deadline to find what drugs might even be appropriate for distribution isn’t until July 2023. Insulin itself is also notoriously hard to make.
Monday’s move follows Newsom’s plan from the beginning of the year when he outlined his budget proposal for 2020. The law will likely be closely watched as the cost of prescription drugs has been a hot button issue during this year’s presidential race.
President Trump has made it a point of his healthcare campaign promises, signing four executive orders in July with the goal of lowering prescription prices. For years, pharmaceutical companies have staunchly opposed one of these orders that attempts to implement a so-called “most favored nations” clause, which would cap some prices Medicare pays to the prices of drugs in other countries.