California dreaming — of lower drug prices
Gov. Newsom exerts ‘our market power and our moral power’ to undercut Big Pharma
California is moving to streamline production and distribution of cheaper generic drugs, with an emphasis on insulin. (Needpix.com)
By Ted Cox
California has enacted a law to use what the governor calls “our market power and our moral power” to undercut drug prices by potentially manufacturing its own generic drugs.
Gov. Gavin Newsom signed the law this week after proposing the state create its own label for prescription drugs in his formal budget address earlier this year. As written, the law charges the state’s Health and Human Services Agency to “enter into partnerships, in consultation with other state departments as necessary, to, among other things, increase patient access to affordable drugs. The bill would require CHHSA to enter into partnerships to produce or distribute generic prescription drugs and at least one form of insulin, provided that a viable pathway for manufacturing a more affordable form of insulin exists at a price that results in savings.”
The Sacramento Bee reported: “California wouldn’t develop new drugs under the law, but would instead try to make cheaper versions of generic drugs, or drugs that are no longer protected by patents.”
Illinois took its own tack on lowering insulin prices earlier this year when Gov. Pritzker signed a law capping costs for the critical diabetic drug at $100 a month. It takes effect next year after it passed in the General Assembly’s fall veto session last year by overwhelming votes of 43-1 in the Senate, where Bunker Hill’s Andy Manar was lead sponsor, and 100-13 in the House, where Will Guzzardi of Chicago led the way.
U.S. Sen. Dick Durbin has also attacked insulin price gouging on the federal level, while also pushing for drug prices to be disclosed in TV ads.
The California law, however, attempts to undercut Big Pharma on all drugs available in generic versions by ordering the state health agency to “explore partnerships with drug manufacturers that could make drugs more affordable and accessible,” according to the Bee, which added that “the agency will have to explore whether such an arrangement would be legal and cost effective,” but with insulin a top priority.
The price of insulin tripled in just over a decade from 2002 to 2013, and Durbin charged that Sanofi, maker of Lantus insulin, has manipulated the system by obtaining 45 so-called follow-on patents after the U.S. Food and Drug Administration had approved the drug. Those new patents have served to limit competition and block generic drugs from being developed and marketed. The senator added that U.S. diabetics were paying 10 times the $37 a month charged in Canada.
In a formal statement, Newsom said California “is using our market power and our moral power to demand fairer prices for prescription drugs,” adding, “I am proud to sign this legislation affirming our ground-breaking leadership in breaking down market barriers to affordable prescription drugs.”
Newsom tweeted: “It’s time to put people over profits.”
“It's something we've contemplated, for sure,” Guzzardi said Thursday. “We're going to watch closely as California rolls out their plan and see if it's something we want to try to emulate here.”
California is the largest state in the country by population, with almost 40 million residents, and it has used its market power to lead the way on auto emissions and hold the line on the Trump administration’s attempts to weaken them nationally. Illinois, though, does have considerable sway of its own as the sixth-largest state, with 12.7 million residents.