California mulling private-label generics to address high drug costs

The new budget proposed by California Governor Gavin Newsom includes a plan to allow the state to contract with generic drug makers to provide medicines to all Californians. He believes that the government’s purchasing power may be sufficient to cut drug prices to the state’s 40M residents, almost 33% Medicaid enrollees.

Gov. Newsom is also in favor of authorizing the California Department of Health Care Services to negotiate drug prices for international buyers, a situation that could potentially enable the state to achieve discounts on par with Canada.

He also intends to create a new Office of Health Care Affordability which would set cost targets for a range of healthcare sectors and “financial consequences” if the targets are not met.

Last year, he signed a bill that bars branded drug makers from entering into “pay-to-delay” deals with generic drug makers, the first such law in the U.S.

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https://seekingalpha.com/news/3530711-california-mulling-private-label-generics-to-address-high-drug-costs