California to Establish Its Own Generic Prescription Drug Label

“It’s time to take the power out of the hands of greedy pharmaceutical companies.”


On Thursday, California Governor Gavin Newsom announced that the state could make its own prescription drug in an effort to the power out of the hands of greedy drugmakers.

He wants California to work with pharmaceuticals that make generic drugs on its behalf so that the state’s residents could afford the drugs. Newsom explained that the goal is to lower drug prices by increasing competition in the generic drug market.

Newsom tweeted, “Prescription drug prices are too high.I’m proposing that California become the first state in the nation to establish its own generic drug label. It’s time to take the power out of the hands of greedy pharmaceutical companies.”

Drug costs in the United States continue to rise. Earlier this month, pharmaceutical companies have increased the prices of 411 drugs, according to GoodRx, a website that tracks the prices of more than 3,500 drugs. Of those 411 drugs, 407 were brand-name produces and four were generics.

With skyrocketing drug prices, most Americans are struggling to pay for their prescriptions, while at least one in 10 people skipping their doses due to high prices.

Experts said that Newsom’s proposal, which would create a single market for drug pricing, might have a bigger impact.

Larry Levitt of the Kaiser Family Foundation said, “Other countries control or negotiate the price of drugs, and if there is one state that could do it, it’s California, which is the size of a country. A drug company could walk away from Rhode Island. It’s much harder to walk away from California.”

Democratic Assemblyman Joaquin Arambula said, “If Costco can have a Kirkland brand, why can’t California have our own generic brand?. I really do think there is quite a bit of merit in having us produce the medications.”

The California governor’s office did not comment on how much the drug proposal would cost, which prompted criticism from some Republican lawmakers.

Republican Assemblyman Devon Mathis said, “When the state runs it, it costs more money. The money is coming out of families’ pockets paying all those crazy taxes.”

According to California law, pharma companies should report any increase in drug prices in the state. “Generic drugs saw a three-year median increase of 37.6%,” according to a report from the Office of Statewide Health Planning and Development.

Newsom’s proposal is another step to overhaul the state’s prescription drug market. Last year, he ordered the state to take over the Medicaid program’s prescription drug benefits.