3:02 PM
Jan 08, 2019
 |  BC Extra  |  Politics & Policy

Governor moves to boost California's drug price bargaining power

CMS has yet to weigh in on whether California can move forward with new Gov. Gavin Newsom's plan to consolidate the state's Medicaid pharmacy services, which could require a waiver.

Newsom issued an executive order Monday, the day he was sworn in, that directs California's Department of Health Care Services to negotiate pricing and purchasing of drugs on behalf of all state Medicaid beneficiaries. Newsom said in a statement that the policy would increase the state pool to 13 million Medicaid beneficiaries, from 2 million currently. The executive order also seeks to expand Medicaid coverage to include all eligible undocumented young adults.

The order further directs state agencies to negotiate and purchase drugs together, rather than independently, and invites private employers, health plans and the self-employed to join the purchasing pool. Newsom said the entities could leverage the consolidated purchasing power to negotiate lower prices and buy drugs in bulk.

Newsom said the 13 million-person pool would make California the largest single purchaser of prescription drugs in the country.

CMS did not respond to a request for comment on whether California would require a waiver for the consolidation.

Newsom has also sent a letter asking congressional leaders and President Donald Trump to amend federal law to enable states to apply for waivers to develop their own single-payer health care systems using reallocated federal funds. In the letter, Newsom said he will submit a budget for the proposal to Congress this week.

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