California’s Democratic Gov. Gavin Newsom is set to unveil a proposal on Friday that would make the Golden State the first in the country to sell its own brand of generic prescription drugs. According to the Los Angeles Times, the details of the plan are still hazy but Newsom says he hopes by getting into the generic game, California will increase competition and drive down the general costs of generic drugs. “A trip to the doctor’s office, pharmacy or hospital shouldn’t cost a month’s pay. The cost of healthcare is just too damn high, and California is fighting back.”
Private companies still produce and sell generics and, not unlike their non-generic counterparts, drugs prices have been skyrocketing over the past few years—in no small part due to a lack of regulations and competition. To put that into perspective, University of Chicago economist Rena Conti found that 40% of all generics on the market in the United States were produced by one company. According to the Associated Press, California’s generics has seen a “three-year median increase of 37.6%,” in the state’s generic drugs costs.
And while the details of the plan are unclear. Whether or not the state of California would produce the generics themselves or open up contracts to manufacturers has not been explained. But the plan would be proposed with the governor’s new budget proposal that is supposed to include upward of a $7 billion surplus for the state.
There are hopeful and negative reviews of the proposal thus far. Republican Assemblyman Devon Mathis told AP“When the state runs it, it costs more money. The money is coming out of families’ pockets paying all those crazy taxes.” Of course, as the executive director of the National Academy for State Health Policy, Trish Riley, explained to the Times, getting control over the state’s soaring drug costs would alleviate budgetary issues that usually lead to higher taxes, “They want to balance their budgets and these drug price spikes make it difficult. This could have tremendous impact.”