California governor to announce state-run generic drug company

California Gov. Gavin Newsom is expected to announce a plan Jan. 9 that would create a state-run generic drugmaker and would set uniform drug prices in the state, including for those on private insurance, the San Francisco Chronicle reported. 

Under the proposal, California would contract with drugmakers to manufacture certain drugs as a way to increase competition and lower drug costs. 

The plan in its current state lacks many details, such as which drugs would be manufactured, how much the estimated cost savings to consumers will be, or which insurers would participate. More details are expected to be released in the coming weeks, according to the San Francisco Chronicle

It is also unclear how the plan, which would allow the state to negotiate prices with drugmakers, would affect seniors on Medicare. 

If enacted, the plan would make California the first state to establish its own generic drug label. 

"The cost of healthcare is just too damn high, and California is fighting back. These nation-leading reforms seek to put consumers back in the driver seat and lower healthcare costs for every Californian," Mr. Newsom told the San Francisco Chronicle.  

Mr. Newsom reportedly also is expected to announce the creation of the Office of Health Care Affordability, which will impose financial consequences on healthcare companies that don't meet state-set standards for pricing transparency, although it's not clear what those standards will be. 

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