Bay Area Counties Join California's Drug Pool To Negotiate Better Prices
SAN FRANCISCO (CBS SF) -- Three Bay Area counties, Alameda, San Francisco and Santa Clara, have joined the state of California to negotiate lower prescription drug prices.
On Gov. Gavin Newsom's first day in office, he issued an Executive Order to allow the state to negotiate drug prices on behlaf of all Medi-Cal recipients by January 2021.
Currently, more than 10 million Medi-Cal patients have drug prices negotiated by private insurers like Blue Shield. Newsom's plan would end that system and make the state the single customer on behalf of all 13 million Medi-Cal patients.
Newsom says the aggregation will allow the state to buy in bulk. "The same reason you may go to a large discounter to buy paperclips and get 25 units of paperclips versus one is the same reason we're doing this," he explained Thursday. "We think we can get a big bulk discount, save you the money, lower the cost for everybody."
Under this rationale, the more the merrier. The governor has invited local governments, other states and even private companies to join the state's drug pool to create bigger bulk discount. Los Angeles County already announced its participation.
"San Francisco will be joining the effort to bring down medication costs in our city," announced San Francisco's Mayor London Breed. She said the city spends $17 million a year on the most expensive 25 drugs for people in prisons and certain medical facilities.
Colleen Chawla, Director of Health Care Serivces in Alameda County, told the crowd at Laguna Honda Hospital, "Safety net providers in Alameda County spend tens of millions of dollars each year on prescription drugs for our county's most vulnerable residents."
Today Breed, Chawla and Santa Clara County's Chief Operating Officer Miguel Marquez made the announcement that they were joining the state's pool.
Still, by law, programs like Medi-Cal have to provide drugs that doctors believe are needed so the state can't exactly walk away if a drug company refuses to lower costs. Given that reality, KPIX asked Newsom how the state could demand concessions.
Newsom offered this agitated response: "If they want to play hardball, we can play hardball. I'm done with their threats. These are the stale threats of folks that are scaring the public so they can continue to gouge you. They now threaten to take a drug that's life-saving off a formulary so they can continue to reap in massive profits. That's shameful beyond words. That's the end of capitalism as we know it. And I actually believe in capitalism. It needs to be saved from itself. Because this kind of arrogance has run its course. Enough."
According Newsom, Rhode Island, Illinois and Colorado have all expressed an interest in either joining California's pool or setting up their own.