Newsom moves to make GLP-1 drugs cheaper for Calif. residents

The state of California wants to make it cheaper and easier for residents to get prescriptions for weight loss drugs like Wegovy and Ozempic as the massively popular drugs remain out of reach for many.

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Gov. Gavin Newsom signed a law Monday morning that pushes the state’s CalRx program to distribute GLP-1 drugs by partnering with existing drug manufacturers. Millions of Americans use GLP-1s like Wegovy to treat a wide range of conditions, including Type 2 diabetes, prediabetes and chronic weight management.

State Sen. Laura Richardson, the law’s sponsor, told a committee earlier this year that she started taking a GLP-1 after she was diagnosed with prediabetes, but her state healthcare plan through Blue Shield denied her coverage. That left her paying $450 a month out of her own pocket for the drugs. The Los Angeles County Democrat proposed the law in order to allow the drugs to be accessed at “a fair and affordable price to Californians.” 

“If something is available to help you to be more healthy … why would we want to wait until a person became diabetic to help them?” Richardson said.

The move to expand access through CalRx comes after Newsom clamped down on coverage of GLP-1 drugs through California’s Medi-Cal program, the state’s Medicaid program. The governor’s budget last year canceled coverage for the medications for people who were taking the drug only for weight loss, a move that aimed to save $790 million by 2029.

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The CalRx program acts outside of health insurance plans like Med-Cal or private insurers, and instead tries to offer affordable drugs to anyone regardless of insurance. The Newsom administration created the CalRx program in 2019 with the goal of partnering with drug manufacturers to distribute popular medicines at lower costs than traditional insurance. So far, the program has released generic versions of insulin, naloxone and albuterol. Customers do not need insurance to buy CalRx drugs.

While the governor signed the law Monday, it will likely take years before residents have access to cheaper GLP-1s through the state program. Newsom had promised in 2023 that the generic insulin would be available in 2024, but it wasn’t released until 2026. The new GLP-1 law will also require the state to fund the program before the state can start exploring partnerships, according to Richardson. 

An earlier version of the bill would have required CalPERS, the state’s health insurance plan for public employees, to offer GLP-1s to all members. That requirement was removed after the plan said it would need to raise rates by $28 a month for all enrollees in order to pay for the drugs.