The executive order, which is said to be the first of its kind to tackle the drug payment system, directs California’s Medicaid system to negotiate prescription drug prices for its 13 million beneficiaries.
Before the order, prescription drug purchasing was handled by private insurers who run the managed care plans for Medi-Cal. Now, negotiations will be handled by the state’s health department.
The executive order also took the first steps to allow private companies and other government agencies to negotiate drug prices with pharmaceutical companies.
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