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In what is being billed as a first-of-its-kind move, California Gov. Gavin Newsom signed an executive order calling for state officials to negotiate prescription drug prices on behalf of the 13 million people covered by Medi-Cal, the state Medicaid program, and allow private insurers to participate as well.

Currently, prescription drug purchasing for all but 2 million Californians is currently handled by private insurers that run managed care plans for the state program. Negotiations will now be handled by the state Department of Health Care Services and all state agencies are directed to purchase drugs together.


“It is beyond me that the state has so many disparate parts not negotiating with one voice to drive down the cost of prescription drugs. That’s going to change. We think this is a significant step forward. It’s the right thing to do,” Newsom said on Facebook Monday as he signed the order. And he also wrote that “we will use our market power and our moral power to demand fairer prices for prescription drugs.” About 25 medicines account for half of state spending.

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  • Ed, As long as there’s an AWP pricing schedule and no laws governing the PBM’s and no transparency of how the PBM’s are charging their clients then the PBM’s will figure out another way to live up to their title , ” The Maffia of the Pharma industry”

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