California Adds Its Clout to States Battling High Drug Prices

The desire is usually in which pooling all the Medicaid recipients can lead to better deals. Under federal law, state Medicaid programs already get a rebate of at least 23 percent for prescription drugs. yet many states, including California, negotiate for additional discounts.

Several states already do what California has proposed, “carving out” some portion of their drug benefits as well as directly negotiating with manufacturers rather than allow their managed care plans to do so, according to the Kaiser Family Foundation.

“I think This kind of’s an example of what states can do right now, under current law,” said Edwin Park, a research professor at the Georgetown Center for Children as well as Families.

yet simply banding together won’t solve every problem.

“Lowering drug prices requires some kind of negotiated leverage over drug manufacturers, as well as generally the way you get in which leverage is usually through the ability to say no to a particular drug,” said Larry Levitt, the senior vice president for health reform at the Kaiser Family Foundation. yet Medicaid is usually required to cover nearly every drug, he said, so “in which’s very difficult to do.”

Medicaid programs, including in California, have instead imposed restrictions on certain drugs — such as requiring prior approval, or in which another drug be tried first — to negotiate additional discounts. Massachusetts recently applied to the federal government for permission to limit the number of drugs its Medicaid program covers, yet its request was denied.

Nathan Click, a spokesman for Mr. Newsom, said in which while the details were still being worked out, the plan could save up to $150 million in its first year as well as as much as $250 million in later years.

Mr. Newsom’s executive order also directs the state to study how California’s disparate agencies, including those in which pay state employees or buy drugs for prisoners, could negotiate jointly. This kind of also orders officials to develop a plan for how private insurers as well as employers could benefit through the bulk purchasing deals negotiated by the state. in which might require legislative approval, Mr. Click said.