California to pass drug discount program

September 4, 2006

Gov. Arnold Schwarzenegger (R, Calif.) is expected to sign a compromise bill passed by the Democrat-controlled state legislature that would create a prescription drug discount program for many residents lacking drug coverage or with inadequate drug coverage. The compromise allows the drug companies three years to negotiate discounts or risk exclusion from the Medi-Cal list of approved drugs.

California to pass drug discount program

Gov. Arnold Schwarzenegger (R, Calif.) is expected to sign a compromise bill passed by the Democrat-controlled state legislature that would create a prescription drug discount program for many residents lacking drug coverage or with inadequate drug coverage. The compromise allows the drug companies three years to negotiate discounts or risk exclusion from the Medi-Cal list of approved drugs. Because Medi-Cal purchases about $2 billion worth of prescription drugs annually, manufacturers will have strong incentives to offer sufficient discounts to keep their drugs on the preferred list. An estimated five million to six million California residents will be eligible to participate. The program will provide up to 40% savings on brand-name drugs and up to 60% savings on generics to uninsured residents with incomes below 300% of the federal poverty level.

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