California could be first state to create own prescription drug label


  • California Governor Gavin Newsom on Thursday announced that part of his second budget plan for the year is for the state to have its own prescription drug accessible to the market.
  • This plan would also involve ordering drug companies to make a bid when selling their medications at lower rates in the state.
  • One drug expected to directly benefit consumers under this plan is insulin, the price of which has been increasing through the years.

Gov. Gavin Newsom disclosed Thursday that the state of California could be the first to acquire its own generic prescription drug label under the lawmaker’s second budget proposal.

According to the governor’s office, Newsom, a Democrat, wants California to negotiate a deal with drug companies to make prescription medications for them so that these could be sold to the public at much more affordable rates by boosting competition in the general market.

An example of a drug that has steadily increased in price for decades is insulin which is used for diabetes. The majority of the market for insulin is dominated by three drug companies.

“Consumers would directly benefit if California contracted on its own to manufacture much-needed generic medications like insulin — a drug that has been around for a century yet the price has gone up over tenfold in the last few decades,” explained Health Access California executive director Anthony Wright.

The plan is unveiled as Newsom’s upcoming budget proposal will be presented for approval to state lawmakers on Friday. Although no amount as to how much the proposal would cost was mentioned by his office, the state could have about $7 billion in surplus this year, says the non-partisan Legislative Analyst’s Office.

Newsom has long since sought to revamp the state’s prescription drug market. First, he ordered the Medicaid program’s prescription drug benefits last year to be state-controlled. The order also included state agencies purchasing drugs by wholesale and using their influence to agree on lower prices. Now, Newsom’s goal on his second year in office is to encourage drug manufacturers to bid to sell their drugs at a uniform price within the state.

This is Newsom’s second budget proposal this year. He revealed another $1 billion in the budget on Wednesday to tackle the growing homelessness problem of the state.


Source: NBC News

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