The Impact of California’s Executive Order On Medicaid Prescriptions

A highly discussed topic throughout the healthcare industry is the rising cost of prescription drugs. As regulatory entities hope to alleviate these issues, California’s newly elected governor has made it a top priority. As the battle over drug prices continues at both the state and federal level, the question begs, what will the impact be on patients?

A recent Managed Care Mag article showcases how the executive order impacts Medicaid managed care plans, who stand to lose control over what can be included in their formularies. Instead of allowing pricing to live within the health plan, Medi-Cal, the state Medicaid system will have the responsibility to determine pricing for prescription drugs for their millions of beneficiaries.

Friso van Reseema, CipherHealth’s VP of Business Development commented on the “interesting move” by the California governor. Although this type of order is not uncommon amongst other states, there is the possibility for both positive and negative impacts on Medicaid members.

As van Reesema elaborates, although there could be limits to what drugs are available, as well as provider appeals based on doctor recommendations, given the volume of Medi-Cal members, there may be more possibility to open negotiations around value-based payments.

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