Good morning. We made it through the first real week of 2020, and congratulations everyone, it was nuts.
Today's word count is 790, or a 3-minute read.
Illustration: Sarah Grillo/Axios
California Gov. Gavin Newsom wants his 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.
How it would work: The state would contract with private manufacturers to make certain generic drugs.
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.
Kansas will likely become the 37th state (38th if you count D.C.) to expand Medicaid under the Affordable Care Act, Axios' Sam Baker writes.
Driving the news: The state's Democratic governor and Republican Senate leader announced a deal yesterday to expand the program, though it still needs to get through the state legislature.
Why it matters: The states still holding out against expansion are the super holdouts, so each one is a pretty tough sell at this point. But we're seeing a wave of even them starting to get on board, and Kansas is a big part of that trend.
Details: Kansas' expansion deal does not include work requirements — something of a surprise in such a conservative state, though work requirements aren't faring well in court.
Two drugmakers' failure to make the kinds of profits they were expecting on new cholesterol drugs illustrates how insurers have gained market power, Bloomberg reports.
Details: Sanofi and Amgen each made competing drugs, which worked better than older cholesterol-lowering drugs for some people, but were more expensive.
Read the whole story — it's worthy of your time.
Humana CEO Bruce Broussard told investors at a small Goldman Sachs conference yesterday that the recent repeal of the Affordable Care Act's health insurance tax is "a substantial benefit to the company's stakeholders," according to a summary of the meeting from Goldman Sachs.
The bottom line: This is an honest take on why insurers — especially those with big footprints in Medicare Advantage, where the ACA tax couldn't really be passed on to customers — lobbied so hard to have the tax killed, Axios' Bob Herman writes.
Go deeper: This policy reversal will translate into hundreds of millions of dollars going toward Wall Street.
Big companies are taking a step back from developing food and drink products made with CBD, after the Food and Drug Administration raised safety concerns, the Wall Street Journal reports.
By the numbers: CBD-infused foods and beverages surpassed $1 billion in revenue in 2019 even without FDA approval, according to the Journal, and revenue is projected to reach $10 billion by 2024.
But smaller players will get a leg up in that market, at least for a while, Axios' Marisa Fernandez writes.
Flashback: In November, the Food and Drug Administration warned consumers against CBD-infused foods and beverages, saying research isn't quite there yet to conclude it's safe to ingest or that it's a good anxiety or sleep aid.