Prescription drugs

The law aims to improve access and affordability by steering coverage and dispensing toward equally safe, effective lower-cost biological drugs while preserving prescriber and patient safeguards.

What the law does ​

• Allows pharmacists to substitute a biosimilar or interchangeable biological product for a prescribed reference biologic unless the prescriber says “Do not substitute,” and only when the patient cost is no higher.
• Requires pharmacists to tell patients and generally notify prescribers of the biological product dispensed.
• Requires health plans and insurers, beginning January 1, 2027, to include a lower-net-cost biosimilar or interchangeable product on the relevant formulary when it covers the corresponding reference product.
• Lets plans, insurers, and utilization review organizations require a lower-net-cost biosimilar trial in place of a covered reference product only with equal-or-lower patient cost sharing, 60 days’ notice, and specified exception options.
• Bars plans, insurers, and pharmacy benefit managers from requiring only a biosimilar in which they or an affiliate have a financial interest when unaffiliated biosimilars are available.
• Requires plans and insurers to report specified information on cost-sharing and premium effects beginning by October 1, 2027.

Who it affects ​

• Patients using prescription biological drugs, including Medi-Cal beneficiaries.
• Pharmacists and prescribing providers.
• Health care service plans, health insurers, utilization review organizations, and pharmacy benefit managers.

Context ​

A prescriber can maintain the current product’s coverage by reissuing the prescription with “Do not substitute.”

Breakdown ​

Biosimilar Drug Substitutions ​

The bill lets pharmacists substitute a biosimilar biological product, not just an interchangeable one, when filling a prescription for a biological product. The substitution is allowed only if the biosimilar or interchangeable product relates to the prescribed reference product and the prescriber has not indicated that no substitution may be made. Knowingly violating this rule can be prosecuted as a misdemeanor.

Key takeaways

• Pharmacists may substitute a biosimilar biological product for a prescribed biological product, subject to the bill’s conditions.
• Pharmacists may also continue to substitute an interchangeable biological product.
• A substitution is not allowed when the prescriber personally indicates, in the required manner, that substitution should not occur.
• A knowing violation of this rule is a misdemeanor, creating a new crime under the bill.
• Because the bill creates a new misdemeanor offense, it imposes a state-mandated local program.

Prescription Drug Coverage and Biosimilars ​

The bill extends continuing prescription-drug coverage protections to people with health insurance policies, not just health plan enrollees. It also lets plans and insurers require certain biosimilar or interchangeable biological products instead of a reference biologic when stated conditions are met. Starting in 2027, formularies that list a reference biologic must also list a lower-net-cost biosimilar or interchangeable product for it, when one is available.

Key takeaways

• Health insurers may not stop covering a previously approved drug for an insured person who still needs it, when it remains appropriately prescribed, safe, and effective for that person’s condition.
• The bill clarifies that providers may prescribe drugs or biosimilars and that pharmacists may make authorized substitutions involving interchangeable biological products.
• Health plans, insurers, and utilization review organizations may require a patient to try a biosimilar or interchangeable biological product instead of a covered reference biologic if the bill’s conditions are met.
• For contracts and policies issued, amended, or renewed on or after January 1, 2027, a formulary that includes a reference biologic must include a licensed lower-net-cost biosimilar or interchangeable product for that biologic.
• A willful violation by a health care service plan can be a crime, creating a state-mandated local program.

Severability ​

This part makes the bill severable. If a court finds one provision invalid, the remaining provisions can continue to operate.

Key takeaways

• The bill states that its provisions are severable.
• If one provision is ruled invalid, the rest of the bill can remain in effect.

No State Reimbursement Required ​

This part states that the state does not have to reimburse local agencies or school districts for costs created by this law. The bill relies on a specified reason to conclude that reimbursement is not required.

Key takeaways

• The bill says local agencies and school districts are not entitled to state reimbursement for costs imposed by this act.
• California’s usual reimbursement process for certain state-mandated local costs does not apply to this act.
• The digest identifies a specified reason for denying reimbursement, but this excerpt does not state that reason.