California Controversy Over Prescription Drug Prices

This is a California news story, published by KFF Health News, that relates primarily to the state Department of Insurance news.

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drug pricing schemes

KFF Health News

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Health

California Gov. Gavin Newsom and state lawmakers are at odds over what to do about prescription drug prices

Summary

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77% Informative

A California bill would subject drug industry intermediaries known as pharmacy benefit managers to licensing by the state Department of Insurance .

It would require them to pass along 100% of the rebates they get from drug companies to the health plans and insurers that hire them to oversee prescription drug benefits.

The proposal, which would impose some of the toughest PBM regulations in the nation, faces at least one major hurdle: Newsom.

A January report found the three biggest PBMs appeared to steer the most profitable prescriptions away from competitors and to their affiliated pharmacies.

They reimbursed at markups exceeding 1,000% for some drugs, including some used to treat cancer, multiple sclerosis, and serious lung conditions.

The bill would ban such markups and bar PBMs from receiving performance bonuses based on drug rebates.

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Neutral language

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informal

Language

English

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not offensive