Experts Skeptical That Newsom’s Plan For California To Sell Its Own Generic Drugs Will Actually Lower Prices

Los Angeles Times: Newsom: California Should Sell Its Own Generic Prescription Drugs
California would become the first state to sell its own brand of generic prescription drugs in an effort to drive down rising healthcare costs under a proposal Gov. Gavin Newsom is expected to unveil in his new state budget Friday. A broad overview of the ambitious but still conceptual plan provided by Newsom’s office says the state could contract with one or more generic drugmakers to manufacture certain prescriptions under the state’s own label. (Gutierrez, 1/9)

Stat: California Plans To Sell Its Own Generic Drugs To Lower Costs 
Details were not disclosed, although the proposal is expected to be part of a budget proposal to be unveiled on Friday. In a statement, Newsom explained the move by saying “a trip to the doctor’s office, pharmacy or hospital shouldn’t cost a month’s pay. The cost of healthcare is just too damn high, and California is fighting back.” The plan was first reported by The Los Angeles Times.(Silverman, 1/9)

The Associated Press: California Could Be 1st State To Sell Own Prescription Drugs 
His proposal also would create a single market for drug pricing in California, with companies having to bid to sell their medicine at a uniform price. One expert said that piece would have the bigger impact. “Other countries control or negotiate the price of drugs, and if there is one state that could do it, it's California, which is the size of a country,” said Larry Levitt, executive vice president of health policy for the Kaiser Family Foundation. “A drug company could walk away from Rhode Island. It's much harder to walk away from California." (Beam, 1/9)

KQED: California Wants To Create Its Own Generic Drug Label
He also wants to expand on current law to allow Medi-Cal, the state’s health coverage for low-income Californians, to consider international drug prices, not just domestic prices, when negotiating rebates with drugmakers. (Dembosky, 1/9)

The Wall Street Journal: California Looks To Launch Its Own Prescription-Drug Label
Rising generic-drug prices and shortages of some products have driven many states to seek greater control, especially as congressional efforts to make prescription drugs more affordable have stalled. More than three dozen states enacted laws to address prescription-drug pricing in 2019, up from 28 the year before and just 14 in 2017, according to the National Academy for State Health Policy. “States are now leading the way in tackling healthcare costs,” Ronny Gal, a pharmaceutical analyst at Sanford C. Bernstein & Co. said. Mai-Duc and Hopkins, 1/9)

Los Angeles Times: Q&A: What You Need To Know About Gov. Newsom's Drug Plan For California
In recent years, some generic drugs have experienced huge price increases, sometimes into the thousands of percent. For example, the price of a month’s supply of clomipramine, a common antidepressant, recently jumped from $16 to $348. Newsom’s plan would probably address those increases by introducing competition in drug markets where there are only a few manufacturers. But in general, it is uncommon drugs that have only a few manufacturers, said Joyce, who heads the USC Schaeffer Center for Health Policy and Economics. More widely prescribed medicines, such as those that treat high cholesterol and high blood pressure, have multiple producers and already competitive pricing, he said. (Karlamangla, 1/9)

CalMatters: Gov. Gavin Newsom To Propose That California Manufacture Its Own Generic Drugs
In the U.K., Labour Party leader Jeremy Corbyn has proposed creating a publicly owned company to make generic drugs the country’s National Health Service needs but can’t afford. Corbyn’s proposal, however, is only likely to advance if his party returns to power. Nor is it clear how substantial a dent a state-manufactured generic program would make in health care costs in California. Generic drugs make up 90% of all prescriptions but account for a fraction of drug spending because they’re so much cheaper than brand-name prescriptions. (Lin, 1/9)

Bloomberg: California Plan Would Upend Drug Prices, Though Obstacles Abound
The most populous U.S. state, California has a history of using its economic muscle to try to influence national policy on everything from auto emissions to health care. The drug-pricing proposals, which in some cases appear to require new law, are likely to be opposed by a pharmaceutical industry that has formidable economic and legal wherewithal of its own. (Armstrong, 1/9)

The Hill: California Plans To Launch Own Prescription Drug Label 
The federal government has limited authority to negotiate with drug manufacturers — Medicare is prohibited from negotiating, but other government programs like Medicaid and Veterans Affairs are allowed to do so. State governments do not have those restrictions. (Weixel, 1/9)

Sacramento Bee: Gavin Newsom Wants CA To Have Its Own Generic Drug Label
Mary Ellen Grant, spokeswoman for the California Association of Health Plans, which represents insurers, said the association is waiting to see more detail. “California’s health plans share the Governor’s concern about the high cost of prescription drugs,” Grant wrote in a statement. “The governor’s proposal to create a state generic drug label could serve as another tool in the toolkit the state can use to make health care more affordable which would be good news for all Californians. We look forward to learning more.” (Bollag, 1/9)

In other pharmaceutical news —

Stat: Bristol-Myers And Sanofi Accuse Hawaii Of Violating Free Speech Rights
In an unusual move, two of the world’s biggest drug makers — Bristol-Myers Squibb (BMY) and Sanofi (SNY) — filed a lawsuit accusing the Hawaii attorney general of violating their free speech rights by insisting they include certain cautionary statements about the Plavix blood thinner in product labeling. At issue is language about the effectiveness of the medication in East Asian and Pacific Islanders, who constitute roughly half of Hawaii’s population. A lawsuit filed by the state in 2014 alleged the drug makers, which once jointly marketed the drug, failed to include data that indicated Plavix would not work for people in those groups. (Silverman, 1/9)

Bloomberg: These Big Drug Flops Show How Healthcare Economics Have Changed
For years, drug companies have enjoyed the freedom to charge high prices for their latest products. But when Sanofi and Amgen Inc. each marketed a powerful new cholesterol-lowering medicine, something surprising happened: High prices hurt sales. Sanofi’s experience has been especially painful. The French company spent more than five years developing Praluent with Regeneron Pharmaceuticals Inc. before its launch in 2015. But Praluent never caught on. Now Sanofi is cutting its losses, getting out of the U.S. market for the drug, and halting its heart disease research altogether in favor of more lucrative medicines for cancer and other diseases. (Griffin, 1/9)

Stat: Regeneron Drug Reduces Bone Growth For Patients With Ultra-Rare Skeletal Disease 
Patients with the ultra-rare disease FOP grow bone where it doesn’t belong, creating a life-threatening second skeleton. Regeneron Pharmaceuticals believes it can offer hope: A new treatment reduced new bone growth by 90% in a clinical trial, the company said, a result that could lead to Food and Drug Administration approval. But convincing the FDA will be a matter of explaining a complicated study of a first-of-its-kind drug, targeting a disease that affects only about 800 people and has no approved treatments. (Garde, 1/9)