Prescription Drugs

The price of prescription drugs has become one of the primary cost drivers in our health care system, accounting for almost 20% of premiums for those under age 65, and even more if you count drugs administered in a doctor’s office, such as chemotherapy, or drugs administered in hospitals and other health facilities. Escalating drug prices affect not only consumers’ health but also their pocketbooks through higher premiums, co-pays, deductibles, and other out-of-pocket costs. When people face higher drug costs, they’re more likely to skip doctor appointments, tests and procedures, and not fill their prescriptions.

State leaders and consumer advocates have spearheaded a number of efforts over the last few years to help address the skyrocketing cost of prescription drugs such as:

• Pooling together the state purchasing power for prescription drugs (Medi-Cal Rx)
• Creating a drug label (Cal Rx) to directly contract to manufacture generic drugs like insulin, at a lower cost.
• Preventing anti-competitive “pay-for-delay” practices by prescription drug companies which keeps lower-cost alternatives off the market for longer.
• First-in-the-nation transparency law requiring prescription drug companies to provide advance notice and explanation for any price hike of more than 16% over two years and enhances public disclosure of data about prescription drug pricing.
• Requiring pharmacy benefit managers (PBMs) to register with the state and require them to disclose information about drug acquisition costs and negotiated rates to purchasers.