California may create its own generic drug market

California might be the first state to develop its own line of generic drugs.

California’s legislature recently approved a measure that would direct the state’s top health agency to partner with one or more drug companies by January to make or distribute a broad range of generic or biosimilar drugs. The bill, SB 852, also opens the door for California to make its own generic drugs in the future.

Proponents of the measure say it is more important than ever for California to pave the way for its own market because COVID-19 has exposed gaps in the ability of public and private entities to maintain adequate supplies of drugs, medical equipment, and devices. Though it could take years to successfully bring a new California generic product to the market, the move would put the nation’s most populous state in direct competition with major generic and brand-name drug manufacturers that dominate the market.

If California Gov. Gavin Newsom signs the bill into law, the U.S. Department of Health and Human Services would have 18 months to identify a list of drugs the state could manufacture, with a report due to the Legislature by July 2022. By July the following year, the state would be required to assess whether it can manufacture its own generics and biosimilars.