Governor Newsom Signs Major Prescription Drug Bill to Lower Costs for Californians

California Governor Gavin Newsom today signed the biggest prescription drug price bill of the year, intended to lower prescription drug prices for California consumers by hundreds of millions of dollars a year.
READ MORE

For Immediate Release: Monday, October 7, 2019

CONTACT:
Anthony Wright, executive director, Health Access California, awright@health-access.org, 916-870-4782 (cell)
Rachel Linn Gish, director of communications, Health Access California, rlinngish@health-access.org, 916-532-2128 (cell)

GOVERNOR NEWSOM SIGNS MAJOR PRESCRIPTION DRUG BILL TO LOWER COSTS FOR CALIFORNIANS

  • Surrounded by health care consumer advocates and other stakeholders, Governor Newsom held his first health care bill signing event to take action to lower prescription drug costs.
  • AB 824 by Assemblymember Wood and sponsored by Attorney General Becerra, deters harmful “pay-for-delay” prescription drug agreements – practices that FTC once calculated cost Americans $3.5 billion a year in inflated pharmaceutical costs.
  • AB 824, supported by dozens of health, consumer, senior, labor, employer, and other advocates, became one of the major health care fights of the year as drug companies fought to weaken the bill.
  • Bill was a key part of the #Care4AllCA campaign’s package of bills aiming to reduce health care costs, expand coverage, and increase quality & accountability in our health care system

SACRAMENTO, CA – California Governor Gavin Newsom today signed the biggest prescription drug price bill of the year, intended to lower prescription drug prices for California consumers by hundreds of millions of dollars a year. During the first-ever health care bill signing event under the new Administration, Newsom signed AB 824, authored by Assemblymember Wood and sponsored by Attorney General Xavier Becerra, to deter harmful “pay-for-delay” practices by pharmaceutical and generic drug manufacturers. Governor Newsom was joined by many of the health, consumer, senior, labor, and other groups that supported the bill throughout the legislative session, which together overcame well-financed opposition from prescription drug companies which sought to weaken the legislation.

With Governor Newsom’s signing of AB 824, anti-competitive “pay-for-delay” practices by prescription drug companies will be under greater scrutiny. These harmful “pay-for-delay” deals occur when brand name pharmaceutical companies pay generic drug makers to slow down or stop lower-cost alternative medications from entering the marketplace. While this drives up profits for drug companies, consumers were being left to pay artificially high prescription drug costs. In 2010, the Federal Trade Commission estimated Americans pay $3.5 billion a year more for medications because of these “pay-for-delay” practices, and that figure has likely gone up significantly since that finding.

“By signing AB 824, California consumers will see lower price alternatives come to the market sooner, easing the burden on people who need these medications to survive. It will be that much harder for brand-name and generic drug companies to engage in shady back-room deals that drive up their profit in secret, at the expense of consumers,” said Yasmin Peled, policy advocate for Health Access California, who attended the signing ceremony today.

“Governor Newsom’s signature puts California at the forefront of efforts to prevent the problematic, price-gouging practices by prescription drug companies, and will hopefully provide momentum for further action that is desperately needed at the federal level,” said Anthony Wright, executive director of Health Access California, who also attended the signing ceremony. “Consumers ultimately need Congress to act to lower drug prices for Americans, but California is leading the way.”

AB 824 was a key pillar of the broader Care4All California campaign of over 70 health, consumer, and community groups working to improve quality, affordability, and equity in our health system with the goal of universal coverage for all Californians. The bill will go into effect on January 1, 2020.

###