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Illustration: Sarah Grillo/Axios

California Gov. Gavin Newsom wants the state to become the first to create its own generic drug label, an attempt to create more competition and bring down prices.

The big picture: California already has enacted insurance reforms that could be a model for the federal government, and is now doing the same on drug prices.

Between the lines: Having the government contract directly with manufacturers isn't a new idea; Sen. Elizabeth Warren has proposed doing so at a federal level.

  • The private market has also created a similar arrangement through Civica Rx, a nonprofit funded by hundreds of hospitals that contracts with private manufacturers to produce generic drugs.
  • “To the extent that Civica Rx has been able to do this for its hospital systems, the state of California could engage in similar kinds of arrangements, at least at some level," said Rachel Sachs, a law professor at Washington University.

How it would work: The state would contract with private manufacturers to make certain generic drugs.

  • It would also create a single market for drug pricing within the state, meaning that all participating payers — private or public — would receive the same price for the same drug.

What they're saying: Northwestern University professor Craig Garthwaite said California's approach probably wouldn't drive down prices in large, competitive markets, but it likely could in smaller markets without much competition — where prices tend to be higher.

The other side:. "This is not a new ‘entrant,’ it is just a labelling change," said Rena Conti, a professor at Boston University.

  • Conti added that establishing a single drug market could backfire by raising prices for some purchasers, or creating a situation where access to drugs is restricted because some companies refuse to bid.

The bottom line: We've told you this before, but the most interesting action on health policy is in the states.

Go deeper

Bryan Walsh, author of Future
Updated 9 mins ago - Health

Omicron travel bans are sign of what's to come

Illustration: Aïda Amer/Axios

The travel bans and border closures prompted by the Omicron variant likely won't fully prevent its spread, but that won't stop countries from leaning on the measures.

Why it matters: The rapid speed at which countries turned to travel bans with the emergence of Omicron indicates border controls will increasingly become a weapon against infectious disease — whether or not public health experts agree they are effective.

28 mins ago - Politics & Policy

GOP fights itself on shutdown politics

Reporters question Senate Minority Whip John Thune before the Republican Party's weekly lunch on Tuesday. Photo: Kent Nishimura/Los Angeles Times via Getty Images

GOP leaders on Capitol Hill are scrambling to reach a deal with a bloc of 15 Senate Republicans threatening a government shutdown to force a fight over the Biden administration's vaccine mandates.

Why it matters: The push to defund the mandates — by holding the short-term government funding bill hostageis largely symbolic, and highly controversial within the Republican Party. A shutdown as early as midnight Friday could trigger everything from national park closures to delays in receiving Social Security checks.

Stacey Abrams launches second campaign for Georgia governor

Photo: Eze Amos/Getty Images

Stacey Abrams, voting rights activist and former 2018 candidate for Georgia governor, is running for the position again in 2022. Abrams would be the first Black female governor in the country.

Why it matters: Abrams caught national attention in 2018 by narrowly losing an election to Republican Gov. Brian Kemp in a state held firmly by the GOP for nearly two decades.

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