SACRAMENTO – In an informational hearing Thursday, Feb. 14, of the California Senate Budget and Fiscal Review Committee, Sen. Jeff Stone, R-Riverside County, proposed the creation of the California Department of Prescription Purchasing and Adjudication to bring savings achieved as a result of bulk purchasing of pharmaceutical drugs back to California consumers.

In his proposal, Stone pointed out that increased drug prices are not due solely to ingredient cost increases.  Rather, Senator Stone suggested that higher prices are the result of pricing strategies utilized by both pharmaceutical companies and Pharmacy Benefit Managers (PBMs) designed to capture the savings of bulk purchasing for private benefit instead of the public good.

“Why should we allow PBMs to siphon off billions of dollars from California consumers when the State could use the savings to help pay for better healthcare for more people in California?  If California gets into the PBM business, the savings realized through volume purchasing of prescription drugs could easily be passed onto California consumers instead of going to the corporate profits of a few multi-billion dollar companies,” Stone said in a prepared statement.

According to the Pharmaceutical Care Management Association, (PCMA) Pharmacy Benefit Managers (PBMs) reduce prescription drug costs and improve convenience and safety for consumers, employers, unions, and government programs. PCMA’s mission is to lead the effort in promoting PBMs and the proven tools they utilize, which are recognized by consumers, employers, policymakers, and others as key drivers in lowering prescription drug costs and increasing access. PCMA monitors and advocates on a range of important health care issues that allow PBMs to continue:

  • Lowering pharmacy costs for America’s employers and consumers.
  • Protecting affordability and choice in Medicare Part D.
  • Lowering pharmacy costs for Medicare seniors.
  • Improving safety with specialty pharmacies.

PBMs, according to the PCMA,  reduce drug costs by:

  • Offering Amazon-style home delivery of medications and creating select networks of more affordable pharmacies;
  • Encouraging the use of generics and more affordable brand medications;
  • Negotiating rebates from drug manufacturers and discounts from drugstores;
  • Managing high-cost specialty medications; and
  • Reducing waste and improving adherence.

To view Stone’s proposal, click here.

Specific language of Senator Stone’s PBM proposal will be introduced into legislation in the coming weeks.

Stone represents California’s 28th Senate District. The district, which is entirely in Riverside County, stretches from the vineyards of the Temecula Valley to the Colorado River and includes the cities of Blythe, Canyon Lake, Cathedral City, Coachella, Desert Hot Springs, Indian Wells, Indio, Lake Elsinore, La Quinta, Murrieta, Temecula, Palm Desert, Palm Springs, Rancho Mirage and Wildomar.