Fine. We’ll do it ourselves.

by Tom Sullivan

Why don’t Democrats create their own group health plan? my spouse has asked for years. Party members constitute over 30 percent of registered voters, after all — close to 50 million people. California Gov. Gavin Newsome today will propose something similar for 12 percent of the nation’s population and the world’s fifth largest economy:

SACRAMENTO — California would become the first state to sell its own brand of generic prescription drugs in an effort to drive down rising healthcare costs under a proposal Gov. Gavin Newsom is expected to unveil in his new state budget Friday.

A broad overview of the ambitious but still conceptual plan provided by Newsom’s office says the state could contract with one or more generic drugmakers to manufacture certain prescriptions under the state’s own label. Those drugs would be available to all Californians for purchase, presumably at a lower cost. The governor’s office said the proposal would increase competition in the generic drug market, which in turn would lower prices for everyone.

[…]

“A trip to the doctor’s office, pharmacy or hospital shouldn’t cost a month’s pay,” Newsom said in a statement. “The cost of healthcare is just too damn high, and California is fighting back.”

Newsome may have borrowed that line.

The California proposal could lower drug costs for non-Californians the way having unions raises pay for nonmembers.

Stay in your lane

Spokespersons for the pharmaceutical trade group PhRMA and the California Association of Health Plans are withholding comment until they see more details:

Assemblyman Devon Mathis, R-Visalia, called Newsom’s prescription drug plans “unrealistic,” and criticized the governor for not saying how he would pay for them. Pharmaceutical policy at the scale Newsom is proposing should be tackled by the federal government, not California, Mathis said.

“The governor needs to stay in his lane and focus on the crises at hand,” Mathis said.

A potential game changer

CalMatters reports the proposal nevertheless could help contain California’s annual $100 billion in health care spending:

Drug costs have become a persistent and increasing worry, both nationally and in California. Six in 10 Americans take a prescription and 79% say the cost is unreasonable, according to a recent survey by Kaiser Family Foundation.

And prices can affect whether people take their pills. The same Kaiser survey found three in 10 Americans reported not taking their medicine as prescribed due to the cost of the prescription.

Governmentally, health care also consumes a sizable portion of the state budget. California’s Medicaid program for the poor, known as Medi-Cal, now tops $100 billion a year in state and federal spending.

[…]

In 2016, drug companies spent more than $100 million to stop a ballot measure that would have barred the state from paying more for prescription drugs than the U.S. Department of Veterans Affairs, which pays the nation’s lowest prices.

“This is a potential game changer,” consumer advocate Anthony Wright told CalMatters. Wright, executive director of Health Access California, added, “California has the capacity and the smarts and the scale to actually do it.”

Allowing government to manufacture prescription drugs at the federal level is an idea Sen. Elizabeth Warren proposed in December 2018 and included in her presidential platform: an Office of Drug Manufacturing. The agency’s goal: “to increase competition, lower prices, and address shortages in the market for prescription drugs, including insulin” as well as “reduce the cost of prescription drugs to Federal and State health programs, taxpayers, and consumers.”

Under “Personnel,” the Warren bill bans former registered drug company lobbyists and former senior executives of “law breaking companies” from serving as Director. But the bill has gone nowhere in “Grim Reaper” Mitch McConnell’s U.S. Senate.

Newsome isn’t waiting.

Cross-posted from Hullabaloo.