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In a groundbreaking move, California adopted a law to allow the state to develop its own line of generic drugs, a notion designed to address the rising cost of prescription medicines that is straining many government budgets across the U.S.

Specifically, the California Health and Human Services Agency will look to form partnerships to manufacture or distribute generics and at least one form of insulin. The law does not specify how this must be accomplished, but any drug must be made or distributed by a pharmaceutical company that is registered with the Food and Drug Administration. The state is not yet authorized to make drugs itself.


For this and other reasons, the initiative will not yield any medicines immediately. State officials must determine which types of drugs can and should be pursued, and provide the state legislature with an analysis showing the costs and effects on competition. At the same time, the Health and Human Services Agency must also assess the feasibility of directly manufacturing generics “at a fair price.”

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