State Legislation Aims to Improve Access to Generics

With the recent passage of Senate Bill 5203 (SB 5203), Washington has become the latest state trying to improve access to generic drugs.

Washington Governor Jay Inslee signed SB 5203 into law on May 12.¹ The law authorizes the Washington State Health Care Authority (HCA) to partner with other states, nonprofits, and state agencies to produce, distribute, and purchase generic drugs.

It also requires state-purchased health insurance programs to procure generic drugs through the partnership, according to a statement from Senator Kevin Van De Wege, who sponsored the bill.¹

“It’s common knowledge that Americans pay far more for everyday prescription drugs than our neighbors to the north and south,” he said in the statement. “People shouldn’t have to go broke paying for common drugs like insulin instead of the less costly, generic alternatives commonly available in other countries.”

The law specifies that all drugs must be produced or dis- tributed by a drug company or generic drug manufacturer registered with the FDA and requires that any HCA partnership result in savings for purchasers and consumers. Furthermore, health carriers, local governments, private entities, and others may purchase generic drugs from the HCA when availability allows.¹

“The higher prices Americans pay for medications that cost far less in other countries is a national disgrace,” Van De Wege said. “This long-overdue legislation will free up money for other important household needs, at least for folks here in Washington.”

Notably, the law allows the HCA to forge partnerships to purchase and distribute name-brand insulin to ensure accessibility to the much-needed drug that has no true generic equivalent because of patent laws. Other compa- nies would still be able to develop a generic substitute for insulin that the HCA could purchase and distrib-
ute at lower prices.¹

Other states have also considered legislation to improve access to generic drugs, with varying degrees of success. In September 2020, California Governor Gavin Newsom signed SB 852 into law, which he said would lower the costs of prescription drugs for consumers, employers, and taxpayers.²

In January 2020, Newsom proposed a first-in-the-nation plan to create a state-sponsored generic drug label, and SB 852 brings the state a step closer to that goal. Under the bill, which was sponsored by Senator Richard Pan, the California Health and Human Services Agency will develop manufacturing partnerships to produce or distribute generic prescription drugs, with the goal of making medications more accessible and affordable.²

“The cost of health care is way too high,” Newsom said.² “Our bill will help inject competition back into the generic drug marketplace, taking pricing power away from big pharmaceutical companies and returning it to consumers.”

California officials have begun the process of identifying potential target medications and developing a strategic plan to promote state-led generic drug purchasing and manufacturing. The state has also transitioned all Medi-Cal pharmacy services from managed care to direct state payment this year, which strengthens the state’s ability to negotiate better prices with manufacturers.²

These legislative shifts by the states represent a broader need for accessible and affordable medications. Individuals with chronic diseases, such as diabetes and heart disease, have an especially high need for affordable medications.

“Prescription drugs don’t work if people cannot afford to take them,” Pan said.²

REFERENCES

1. Van De Wege bill to allow lower-cost generic drugs becomes law. News release. Washington Senate Democrats. May 13, 202 Accessed May 18, 2021. https://senatedemocrats.wa.gov/vandewege/2021/05/13/van-de-wege-bill-to-allow-lower-cost-generic-drugs-becomes-law/
2. Governor Newsom signs legislation advancing California’s fight to lower prescription drug prices. News release. Office of Governor Gavin Newsom. September 28, 2020. Accessed May 18, 2021. https://www.gov.ca.gov/2020/09/28/governor-newsom-signs-legislation-advancing-californias-fight-to-lower-prescription-drug-prices/#:~:text=Earlier%20this%20year%2C%20Governor%20Newsom,one%20step%20closer%20to%20reality