The deal as negotiated will give drug companies three years to voluntarily lower drug prices on medications for qualifying patients. Governor Arnold Schwarzenegger announced the deal and says there’s a punishment for drug companies that don’t comply—he says they’ll take a hit to the wallet.
“If they would not kick in their program, they will not be allowed to do business then with the Medi-Cal program in the state.”
The program is targeted toward those who have no insurance or who are inadequately insured, including families who make the state median income of nearly 68-thousand dollars, who have high un-reimbursed medical expenses. The measure must still be approved by the state legislature. But some Republican lawmakers have already expressed concerns—they say forcing companies to cut prices could lead to cost-cutting measures in development of new drugs.