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Los Angeles County Joins Gov. Newsom's Bid to Negotiate Lower Prescription Drug Prices

Newsom’s plan consolidates the state’s prescription drug negotiating power by directing state agencies and local governments, who want to join the effort, to bargain together. It takes effect in 2021.
Laura Klivans
Gov. Gavin Newsom speaks during a news conference at the California State Capitol on March 13, 2019 in Sacramento. (Justin Sullivan/Getty Images)

The country’s most populous county will join Gov. Gavin Newsom’s plan to negotiate for lower prices from drugmakers, the governor and Los Angeles County leaders say.

Coverage of prescription drug pricing

Newsom’s plan, which came in the form of an executive order signed moments after being sworn in as governor in January, would consolidate the state’s prescription drug negotiating power by directing state agencies, like Medi-Cal, CalPERS and the California Department of Corrections and Rehabilitation, to bargain together. The proposal takes effect in 2021.

“I got sworn in a hundred days ago, and the first thing I did was sign an executive order and that’s led us to this moment,” Newsom said Wednesday at Rancho Los Amigos National Rehabilitation Center in Downey, a city in southeast Los Angeles County.

In the executive order, Newsom invited local governments to join the effort, too. Los Angeles was the first to do so.

“Honestly, I thought it would take years to convince other folks to join our effort,” Newsom said.

The city and county of San Francisco have not reached a decision about joining Newsom’s plan, but are supportive of efforts to lower prescription drug costs and are studying the proposal, a city spokeswoman said.

The state spent about $8 billion on prescription drugs through Medi-Cal in the last year, according to the Legislative Analyst’s Office. Los Angeles County spends $250 million a year on pharmaceuticals, said Dr. Christina Ghaly, director of the Los Angeles County Department of Health Services.

Newsom and Los Angeles County officials said they hope their efforts to consolidate negotiating power would reduce the rising costs of prescription drugs.

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