California could launch its own generic prescription drug label

Henrietta Brewer
January 10, 2020

On Twitter, Newsom said he is proposing that California become the first state in the nation to establish its own label, which would allegedly serve to combat rising drug prices.

California Governor Gavin Newsom said he will create a fund, seeded with $750 million from the state budget, to provide rental subsidies and supportive housing services in a state home to a quarter of the country's homeless population. The state could have as much as a $7 billion surplus this year, according to the nonpartisan Legislative Analyst's Office.

They also began taxing people who refused to buy health insurance, using the money to help pay health insurance premiums for middle-income families. Generic drugs saw a three-year median increase of 37.6%, according to a report from the Office of Statewide Health Planning and Development.

An example could be insulin for diabetes patients.

It is not clear at this time how much the proposal would cost, nor what medicines would be covered.

The private market has also created a similar arrangement through Civica Rx, a nonprofit funded by hundreds of hospitals that contracts with private manufacturers to produce generic drugs.

"There are other factors in the actual manufacturing that the state may not be able to escape", he said. The administration released only a summary of the proposal on Thursday without the projected price tag, but indicated it's part of a multi-prong effort that includes strengthening the state's public option for health insurance and increasing drug pricing transparency.

The Associated Press reported that Newsom planned to create the fund via executive order on Wednesday, two days before he introduces his second annual budget proposal to the California state legislature. California's Medicaid program for the poor, known as Medi-Cal, now tops $100 billion a year in state and federal spending.

While most Americans get generic prescriptions, they only account for a small part of the total drug spending in the U.S. That's because unlike the name-brand drug market, generics are very competitive, said Jeff Joyce, chairman of the Department of Pharmaceutical and Health Economics at USC's School of Pharmacy.

Newsom already provided details on key areas of his budget in recent days, outlining steps to curb homelessness, wildfires and the cost of prescription drugs.

Since taking office a little over a year ago, Newsom has made health care a priority by expanding Medi-Cal to undocumented young adults and continuing to champion Obamacare where the federal government has pulled back by requiring all residents to have health insurance.

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