Bill Signed by Governor Newsom to Permanently Cap Prescription Drug Costs

AB 948 (Berman) keeps expensive prescription drugs more affordable for Californians with chronic illnesses

SACRAMENTO, CA – Over the weekend, California Governor Gavin Newsom has signed AB 948 by Assemblymember Berman to make permanent the existing $250 co-pay cap for prescription drugs, ensuring consumers can count on their monthly prescription drug costs staying consistent, even as drug costs rise.

“With the cost of health care ever-increasing, this simple measure will provide huge relief to Californians relying on prescription drugs to manage their health,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition and sponsor of the bill. “Governor Newsom’s signing of AB 948 means Californians will be able to budget accordingly, and not be financially destabilized by huge out-of-pocket costs all in one month or prescription drug price spikes.”

The $250 cost-sharing cap for a 30-day supply of prescription drugs was first signed into law with AB 339 (Gordon, Chapter 619 of 2015), and renewed in subsequent legislation, but was set to expire this year. Before the cap, Californians with serious and chronic conditions like cancer, HIV/AIDS, multiple sclerosis (MS) and lupus were particularly vulnerable to high out-of-pocket costs because more expensive specialty drugs were often put on the highest tier of their health plan’s drug formulary, frequently costing thousands of dollars. In recent years, these costs have only gone up. For example, the prices for MS medications have increased nearly 400% since 2004, and 60% in the last five years alone. Without the co-pay cap, research showed there would be an increase of nearly $47 million in enrollee costs.

“Before AB 339 became law in 2015, the sickest and most vulnerable Californians had to choose between paying for their high-cost prescriptions and paying for other essentials such as housing or food. If we let these critically important protections expire, consumers could once again pay thousands of dollars in just one month for essential medication,” said Assemblymember Berman, author of AB 948. “Prescription drug costs have continued to climb since 2015, and the clock was ticking on the protections that we’ve come to rely on. That is why AB 948 is so important. I want to thank Governor Newsom for signing this bill that ensures that Californians who need life-saving medication will no longer have to fear bankruptcy because of it.”

“With the median annual cost of Multiple Sclerosis medications at $94,000, people living with multiple sclerosis often face significant challenges in paying for their prescription drugs. An estimated 40% of these individuals report having altered their treatment plans, either skipping or delaying treatment, due to cost which ultimately can result in disease progression. With AB 948 becoming law, it will bring peace of mind to these individuals by continuing to reduce medication cost barriers and ending discriminatory benefit design practices that specifically affect people who have a chronic disease,” said Stewart Ferry, Director of Advocacy & Activist Engagement, National Multiple Sclerosis Society.

The new law now makes the $250 cost-sharing cap for a 30-day supply of a prescription drug and tiering standards permanent. “This measure helps keep prescription drugs more affordable, ensuring that consumers can access the medication that they need and focus on their health, not whether they can afford their prescription,” said Wright.