As AJMC reports, Governor Gavin Newsom signed into law legislation that will allow California to produce and distribute its own line of biosimilars, biosimilar insulins, and generic drugs. My thoughts on SB-852 are covered in an interview in Radar on Specialty Pharmacy.
Shafrin tells AIS Health that there are two key reasons for manufacturers to contract with California. First, the drugs will be available without rebates. For this reason, “manufacturers could lower their list price but not lose much funds by simply cutting out the middleman — the pharmacy benefit managers — and avoiding having to pay rebates.”Second, he notes that “California is a large market, and it could be the case that these ‘Made in California’ drugs would have preferred status among California payers. The bill notes that the state needs to consult with key state purchasers including Public Employees’ Retirement System, the State Department of Health Care Services, the California Health Benefit Exchange (Covered California), the State Department of Public Health, the Department of General Services, and the Department of Corrections and Rehabilitation. Getting access to all these large California payers could be lucrative if the reimbursement price is reasonable.”
Do read the whole thing (subscription required).