(a) The California Health and Human Services Agency (CHHSA) or its departments shall enter into partnerships, consistent with subdivision (b) of Section 127693, in consultation with other state departments as necessary, to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs.

(b) For purposes of implementing this chapter, CHHSA and its departments, including the Department of Health Care Access and Information, may enter into exclusive or nonexclusive contracts on a bid or negotiated basis. Contracts entered into or amended pursuant to this section are exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and are exempt from the review or approval of any division of the Department of General Services. When appropriate, CHHSA shall establish initial and ongoing metrics to measure progress and efficiency, and remedies in the case those metrics are not met in any partnership contract entered into pursuant to this section.

Terms Used In California Health and Safety Code 127692

  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Contract: A legal written agreement that becomes binding when signed.
  • department: means State Department of Health Services. See California Health and Safety Code 20
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • State: means the State of California, unless applied to the different parts of the United States. See California Health and Safety Code 23

(c) CHHSA shall have the ability to hire staff or contractors to oversee and project-manage the partnerships for manufacturing, procurement, or distribution of generic prescription drugs, contingent upon an appropriation by the Legislature for this purpose.

(d) It is the Legislature’s intent that any manufacturing partnership contract entered into pursuant to subdivision (b) is a partnership intended to create a California-branded label for generic drugs. It is further the Legislature’s intent that any manufacturing that is done under this section is intended to benefit the residents of this state by ensuring adequate supplies and access to generic prescription drugs and lowering health care costs through savings to public health care programs and private health insurance coverage.

(Amended by Stats. 2023, Ch. 42, Sec. 51. (AB 118) Effective July 10, 2023.)

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