Nearly 25,000 Californians who rely on brand-name biologic medications could see their prescriptions switched to cheaper alternatives as early as next year, under legislation now awaiting Governor Gavin Newsom’s signature.
Senate Bill 1094, authored by San Diego Democrat Sen. Akilah Weber Pierson, would let health insurers and pharmacists substitute a patient’s brand-name biologic drug for a lower-cost biosimilar version unless the patient’s doctor objects. Insurance plans would be required to notify both doctors and patients 60 days before making any such switch.
Weber Pierson, who also works as an obstetrician, introduced the measure as prescription drug costs continue climbing statewide. According to state health officials, insurance spending on medications jumped 72% between 2017 and 2024, with biologics representing a major share of that increase. State prescription data show that six of the 10 most expensive drugs sold in California fall into the biologic category.
A legislative analysis estimates the bill could trim roughly $87.7 million annually from premiums paid by employers, government programs and individual enrollees — a modest reduction of less than 1%. Californians could also save between $92 and $310 a year in out-of-pocket costs, though the amount would depend on individual insurance plans.
The measure is part of a broader push by state lawmakers and health officials to rein in healthcare spending. Recent efforts have included penalizing hospitals for excessive cost growth, scaling back coverage for weight-loss medications under Medi-Cal, and launching a state-backed insulin program sold well below market price. Officials note that such savings don’t always show up as direct rebates to consumers — instead, they’re intended to slow the pace at which premiums and other costs rise over time.
SB 1094 earned support from the insurance industry, business groups and some labor unions as it moved through the Legislature, though not without objections. Rheumatology groups and several patient advocacy organizations have raised concerns that switching patients to a different drug purely for cost reasons — rather than medical necessity — could disrupt treatment plans that are currently working well.
Biologic drugs are commonly prescribed for complex autoimmune disorders such as rheumatoid arthritis, lupus and ulcerative colitis, as well as certain cancer immunotherapies. Biosimilars serve as their generic equivalent. Although not chemically identical to the original biologics, the U.S. Food and Drug Administration has determined they are safe and equally effective for most patients.
Weber Pierson likens the shift to substituting a generic drug for its brand-name counterpart. “Biosimilars are just as effective with a similar side effect profile as the biologics, but cost significantly less,” she said, adding that patients who don’t respond well to a biosimilar would be permitted to switch back to their original medication.
Unlike conventional synthetic drugs manufactured through chemical processes, biologics are derived from living cells through a complex and costly production method. Biosimilars typically cost 15% to 35% less than their brand-name equivalents, according to research published in JAMA Health Forum.
“When you look at high-cost drugs, they’re oftentimes these specialty drugs that really go towards serving a very small percentage of the overall population,” Weber Pierson said, explaining her decision to focus on biologics specifically.
A report released last year by the state’s Department of Managed Health Care found that specialty drugs, including biologics, make up less than 2% of all prescriptions but account for 63% of total annual prescription drug spending statewide.
Not everyone is convinced the switch will be smooth for patients. Liz Helms, president of the California Chronic Care Coalition, said she understands the pressure to control healthcare costs but worries that patients who are stable on a brand-name biologic could see their treatment disrupted in pursuit of savings that may never materialize for them personally.
Dr. Robin Dore, a rheumatologist with more than four decades of experience treating patients with rheumatoid arthritis, osteoporosis, lupus and other autoimmune conditions, shares that concern. Many of her patients already endure severe pain and lengthy insurance approval processes, she said, noting that insurers frequently require patients to try cheaper drugs first before approving coverage for biologics.
Dore, former president of the California Rheumatology Alliance, said that while many patients transition to biosimilars without issue, others spent years cycling through different treatments before finding one that worked for them. Her organization pushed for the bill’s requirement that health plans give physicians 60 days’ notice along with a list of affected patients, allowing doctors time to weigh in and prepare.
She said some of her patients have already been switched to biosimilars after insurers dropped coverage of certain brand-name biologics — a pattern she expects to become more common under SB 1094. So far, she said, those switches haven’t resulted in noticeable savings for her patients.
Studies have found mixed results when it comes to whether increased biosimilar use actually lowers out-of-pocket costs for consumers.
Weber Pierson acknowledged that her original hope was for patients to see immediate financial relief, though she believes the impact may become more apparent over time. “I would love to be able to put money back into the pockets of patients,” she said. “Unfortunately, our healthcare system is so complicated that it’s hard to do that.”
To prevent insurers from simply keeping the savings generated by increased biosimilar use, the bill would require health plans to report annually on how those savings are being applied. As Weber Pierson put it, even a smaller premium increase represents meaningful relief: “If premiums would have gone up $50, and instead now they’re going up $5, it’s an increase in healthcare, but it’s not as much.”
Original source: CalMatters
