Existing law requires specified state agencies to participate in a prescription drug bulk purchasing program, authorizes the Department of General Services to enter into exclusive or nonexclusive contracts on a bid or negotiated basis with manufacturers and suppliers of single-source or multisource drugs and to obtain from those manufacturers and suppliers discounts, rebates, or refunds based on quantities purchased insofar as permissible under federal law, and authorizes the department to appoint and contract with a pharmaceutical benefits manager, as specified. Existing law authorizes the Department of General Services to explore additional strategies for managing prescription drug costs and investigate and implement those strategies in consultation with other specified state agencies.

This bill would revise these provisions and instead require the department to convene the California Pharmaceutical Collaborative cochaired by the Deputy Director of the Procurement Division of the department and the Assistant Secretary of California Health and Human Services to address the rising cost of pharmaceuticals. The bill would require the Department of Corrections and Rehabilitation, the Department of Veterans Affairs, the California Health and Human Services Agency, the Department of Finance, the Government Operations Agency, and the Labor and Workforce Development Agency, among other entities, to each appoint a representative to the collaborative and to participate as members. The bill would also require the Speaker of the Assembly and the President pro Tempore of the Senate each to appoint one member to the collaborative.

The bill would require the collaborative to perform specified functions, including, among other things, coordinating best value clinical treatment protocols among members of the collaborative, leveraging state and local governmental efficiencies and methodologies to achieve best value procurement, purchasing, and negotiating with manufacturers for discounts on pharmaceuticals, and acting as a forum for discussion where issues of interest related to pharmaceuticals can be identified and addressed. The bill would authorize the Department of General Services to contract with manufacturers and suppliers of pharmaceuticals and to appoint and contract with a pharmaceutical benefits manager, as specified. The bill would require the State Department of State Hospitals, the Department of Corrections and Rehabilitation, and the State Department of Developmental Services to participate in the prescription drug bulk purchasing program authorized by these provisions and permit any state, district, county, city, municipal, or public agency governmental entity to elect to participate in the coordinated purchasing program. The bill would require the Department of General Services, on or before July 1, 2018, and annually until 2022, to submit a report to the appropriate policy and fiscal committees of the Legislature on the activities of the collaborative, including the number, and a description, of the contracts entered into with pharmaceutical benefits managers or other pharmaceutical drug purchasing agents, the number and a description of entities that elect to participate in pharmaceutical purchasing coordinated by the collaborative, other options and strategies that have been or will be undertaken by the collaborative, the progress made with regard to the investigation and implementation of options and strategies to achieve the greatest savings on pharmaceuticals, and the estimated cost savings attributable to activities that have been or will be undertaken by the collaborative.