Tag: California

California plans to produce generic drugs for its residents
Like most drug prices, insulin prices are out of control. Unlike most other drugs, insulin has been around for decades and tens of millions of Americans with diabetes depend upon it for their health and well-being. Congress can’t seem to get its act together to regulate drug prices so, Angela Hart writes for Kaiser Health News, California has decided to produce its own brand of generic insulin to help its 4 million residents with diabetes, along with other generic drugs.

Today, three big pharmaceutical companies manufacture brand-name insulin and sell it at a list price of as much as $400 per vial. At that price, it’s difficult for a lot of Americans to buy it and make ends meet. Even with insurance, costs add up. And, the dirty little secret is that it costs these pharmaceutical companies less than $30 a vial to produce.

Left unchecked, diabetes kills. It can take people’s vision and limbs. Their organs shut down. Still, about one in four people who need insulin can’t afford it because Congress continues to give pharmaceutical companies monopoly pricing power over their drugs.

CalRx intends to produce insulin, along with other generic drugs people need but can’t get. It will distribute the drugs through pharmacies and mail order. The question is whether California can realize the 70 percent savings on insulin it anticipates. It also apparently needs to find a pharmacy benefit manager to distribute its drugs.

Governor Newsom plans to launch CalRx with a $100 million investment. California will need to find a drug manufacturing partner. Civica Rx, a relatively new nonprofit drug manufacturing company, could get the contract. It is planning to make three different types of biosimilar insulin, insulin that mimics the insulin currently available through Eli Lilly, Sanofi and Nordisk.

Civica Rx could be the perfect partner for California, as it plans to sell its insulin for just slightly more than it costs, around $30 a vial and $55 for five pen cartridges. Civica Rx will apparently need pharmacy benefit manager partners to get their drugs on insurers’ formularies.

Mark Cuban has also created a drug company that sells drugs at their wholesale price plus 15 percent. For whatever reason, California appears less interested in a partnership with Cuban’s company.

Let’s hope California can succeed, given Congress’ inability to act on behalf of people with Medicare, let alone on behalf of people in corporate health plans and the uninsured. Insulin prices are soaring, up as much as 70 percent in the five years between 2014 and 2019 alone.

It’s not clear that there will ever come a time when Congress takes control of drug pricing away from manufacturers and pharmacy benefit managers. At the very least, to make drugs affordable quickly and save millions of lives, Congress should be opening US borders so that people can easily and legally import prescription drugs from verified pharmacies around the world.

Here’s more from Just Care:
June 6, 2022
Pharma suit dismissed in California: State can require notice of drug price hikes
Ed Silverman reports for StatNews that a federal judge in California dismissed a Pharma lawsuit which attempted to block a state consumer protection law. The law requires drug makers to disclose and justify some price hikes in advance.

The judge ruled that the court had no authority to hear the case based on Pharma’s submissions. The judge further ruled that Pharma had failed to demonstrate any potential harm from the law. The judge did give Pharma the ability to refile its lawsuit if it could show harm.

Pharma claims the California law is unconstitutional, violating free speech and interstate commerce. Pharma also blamed the Pharmacy Benefit Managers (PBMs)–the middlemen who decide which drugs an insurer will cover and at what copay level–for increases in the list price of drugs. And, it claimed the law should hold the PBMs accountable.

The 2017 California law obligates pharmaceutical companies to let health insurers and government health plans know at least 60 days in advance of a 16 percent hike or more, over two years, in the list price of all drugs that cost more than $40. The pharmaceutical companies are also obligated to explain why they are raising the price of these drugs.

The law may be working to keep at least some drug prices down. A few pharmaceutical companies let California health plans know that they were not going to raise prices on some drugs or they were going to raise prices less.

Here’s more from Just Care:
September 4, 2018
New California law forces Pharma to justify price hikes
Kaiser Health News reports that last week, California Governor Jerry Brown signed a major drug transparency law for the state. The goal is to help the public get a handle on why it is necessary for pharmaceutical companies to be raising drug prices so much each year as well as to address increasing income inequality. But, unlike the laws in New York and Maryland, the California law does not empower the state to rein in drug prices.

The law forces Pharma publicly to justify price hikes of 16 percent or more over two years. The law applies to all drugs with a wholesale cost of $40 or more. Pharmaceutical companies must give state agencies and insurers 60 days’ notice of their proposed price hikes.

The piece of the law requiring notice to state agencies and insurers takes effect on January 1, 2018. The piece of the law requiring public justification of price hikes does not take effect until 2019.

The law also requires insurers to report how much of the year’s premium increase is attributable to drug prices.

Pharma’s response to the law–which drug manufacturers spent millions of dollars and hired 45 lobbyists to oppose–is to point the finger at health insurers and pharmacy benefit managers as the businesses responsible for high drug prices. Drug companies would like to pretend that they are somehow not responsible for the big rebates they pay businesses and insurers to promote their drugs over other often less costly drugs. Pharmacy benefit managers and insurers pocket these rebates, as much as they can, and do not pass them on to patients.

If you’d like Congress to rein in drug prices, please sign this petition.

Here’s more from Just Care:
October 17, 2017
California may pave way for improved Medicare for all.
Updated: Healthy California, a bill passed by the California Senate but now put on hold by the Assembly, could pave the way for improved Medicare for all. It guarantees every California resident all the benefits of Medicare and a lot more, with no premiums, deductibles or coinsurance. It’s genius is its simplicity, efficiency and equity.

How would Healthy California work? All California residents (regardless of immigration status) would be covered for care from virtually any doctor or hospital in the state. If they preferred, they could enroll in an integrated care plan, like Kaiser. And, they would pay no premium, deductible or copay for this coverage.

What services would Healthy California cover? It would cover all essential medical and hospital services, durable medical equipment, prescription drugs, dental, vision and hearing, as well the development of plan to cover nursing home care and other long-term services and supports. [see note 1 below]

What if you have Medicare? You would continue to be able to get care from the doctors and hospitals of your choice, but you would stop paying a Medicare premium, deductible and coinsurance. You would no longer need to choose a Part D drug plan or have Medicare supplemental insurance. All your medically reasonable and necessary care, medical equipment and prescription drugs would be covered in full. Everyone would be insured and those currently underinsured (i.e. those with high copays and deductibles) would now have full universal coverage.

How is Healthy California funded? The legislation is silent. But a new financial analysis by economists at the Political Economy Research Institute at UMass, (PERI), proposes this: Public funds (e.g. Medicare and Medicaid) that already pay more than 70 percent of all health care expenditures in California would now flow into a single payer pool. In addition, anyone buying goods or services in California would pay a 2.3 percent dedicated sales tax, with exemptions for necessities such as housing, utilities, food at home and other low income rebates to promote tax equity. Businesses would also pay a 2.3 percent gross receipts tax on all revenue over $2 million. Thus, 80 percent of businesses in the state would pay no taxes. And all businesses, regardless of size, would pay less than they currently pay for health insurance for their employees.

What happens to insurance companies? Under Healthy California insurance companies “may not offer benefits or cover any services for which coverage is offered to individuals under the program…” [see note 2 below]

Are there cost savings? Yes, PERI estimates about a 15 percent savings from, among other things, the elimination of administrative costs related to billing and insurance-related activities and a mandate to set prescription drug prices at 70 percent of what Californians currently pay. It’s a workable plan— universal health coverage for all residents at less than 90 percent of today’s cost.

If you believe it’s time for improved Medicare for all, please sign this petition to Congress.

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Note 1. From the bill, SB 562, p. 15: (1) The board shall develop a proposal, consistent with the principles of this title, for provision by the program of long-term care coverage, including the development of a proposal, consistent with the principles of this title, for its funding. In developing the proposal, the board shall consult with an advisory committee, appointed by the chairperson of the board, including representatives of consumers and potential consumers of long-term care, providers of long-term care, members of organized labor, and other interested parties.

Note 2.: From SB 562, P. 14-15: (g) A carrier may not offer benefits or cover any services for which coverage is offered to individuals under the program, but may, if otherwise authorized, offer bene ts to cover health care services that are not offered to individuals under the program. However, this title does not prohibit a carrier from offering either of the following:
- (1) Any benefits to or for individuals, including their families, who are employed or self-employed in the state but who are not residents of the state.
- (2) Any benefits during the implementation period to individuals who enrolled or may enroll as members of the program.
- (h) After the end of the implementation period, a person shall not be a board member unless he or she is a member of the program, except the ex officio member.
July 2, 2017