California officials press for more pharmacy data, expand CalRx authority to curb drug costs

California health policy officials told the Health Care Affordability Advisory Committee on June 16 that prescription drugs are a major and growing driver of health spending and that the state needs better data and tools to curb rising costs. The Office of Health Care Affordability (OCA) and the Health Care Affordability Initiative (HCAI) outlined a series of steps: add pharmacy benefit manager (PBM) data to the Health Care Payments Data program if the budget provision is enacted; expand the state's CalRx initiative to allow partnerships with brand-name manufacturers; and begin collecting richer non-claims pharmacy payment data starting in September 2025. Why it matters: Committee members and staff said high and rapidly rising drug prices—especially new classes of medicines such as GLP-1 weight-loss drugs and very costly cell-and-gene therapies—are straining hospitals, employers and patients. Without better transparency into PBM contracts, rebates and spread pricing, officials said they lack the information needed to assess how much of list-price growth is passed to consumers and plans. Vishal Fishel, an HCAI presenter, summarized evidence and policy steps. He said, “Pharmaceuticals are a Cost Driver,” and walked the committee through research on prescription spending growth, the distribution chain (manufacturers, wholesalers, pharmacies, PBMs, payers), and common market failures such as rebate walls, patent thickets and spread pricing. Fishel described OCA's two workstreams for drug policy: (1) support for OCA's ongoing spending-target and cost-driver analyses, including whether specific drug costs should be treated as allowable factors for exceeding targets; and (2) broader research and policy work that could support programs such as CalRx. He said OCA is building a small in-house pharmaceutical policy team for both buckets. On data and near-term actions, the committee heard that the May Revision to the state budget proposes requiring PBMs to be licensed by the Department of Managed Health Care and to provide drug cost, rebate and distribution channel information to the HPD. If enacted, those filings would give OCA access to PBM payments to PBM-owned pharmacies, rebate amounts, scripts counts and other distribution detail. The presentation noted existing statutory and regulatory authorities OCA already uses: the SB 17 manufacturer advance-notice reporting requirement (price increases and new high-cost drugs) and OCA's authority to collect non-claims payment information under the HPD. Fishel said the HPD has posted more than 7,500 manufacturer reports to date and that the agency will begin collecting non-claims payment data, including rebate information, later in 2025. Committee members described practical barriers that patients and clinicians face. Several clinicians and committee members described lengthy prior-authorization processes and situations where patients have been left without essential medications because of formulary or supply issues; one clinician said a patient had been out of insulin for months. Committee members urged OCA to track expanded clinical uses for existing drugs and to measure non-claims and out-of-pocket spending as part of affordability work. The director of HCAI noted CalRx's proposed expansion in the May Revision to allow state partnerships with brand-name manufacturers and a $5 million emergent response fund to respond to supply shocks or market manipulation. Officials said OCA would use HPD claims and other data (Census-based demographic data, Board of Pharmacy location data) to plan equitable distribution for CalRx products when they become available. What's next: OCA plans to collect additional rebate and PBM data as part of the HPD non-claims data collection beginning September 2025 if the budget proposal is enacted. Staff said they will continue to analyze HPD claims and non-claims data and to provide follow-up briefings to the committee.