Senate BPE — 2026-04-06

Thank you. Welcome. Good morning, everyone. Welcome to the Senate Business Professions and Economic Development Committee. Committee announcements are for today that we have one bill on our agenda, SB 1094 by Senator Weber Pearson. We do not have quorum yet, so we are going to wait for other members as they are landing and coming here. But we're going to begin as a subcommittee. I do just want to flag for you all that the way that we typically have it is that the author will present their bill here at this lectern. And then we will have witnesses both in support and opposition at the microphone standing there behind the guardrails. Each individual will have two minutes. They will actually be timed. And then the Me Too's will come together, both opposition and support together. And looks like we now just have a quorum. So I'd like to pause just for a moment for a committee assistant to call roll and establish quorum.

Choi here.

Adagin here.

Grayson here.

Nilo.

Strickland.

All right. We have quorum. We will begin our hearing with final item number one, SB 1094. Senator Weber Pearson, you are welcome to present your bill. And prior to beginning, I just want to make sure that you acknowledge and accept the amendments noted in the analysis.

Thank you.

Good morning. My name is Suzanne Shea. I'm a licensed pharmacist with more than 40 years of experience. I currently serve as the vice president of pharmacy and clinical nutrition at Sharp Healthcare in San Diego. I oversee medication use, compliance, and affordability across the system, including co-chairing our drug formulary committee. Sharp Healthcare is deeply committed to delivering high-quality, affordable care to our patients. And as part of this commitment, the Sharp Pharmacy team uses a cost-based approach to review all medications for safety, efficacy, and cost. This approach has generated significant savings for our health system and for our patients, as these lower-cost alternatives, including both generics and biosimilars, have reduced our acquisition costs and lowered copays and out-of-pocket expenses for our patients. For example, a new drug, Yosintec, is a biosimilar that the FDA has approved to be as safe and effective as the reference drug Stellara, a brand-name biologic product for treating psoriasis. And Yosintec is 97% lower than Stellara in cost. As Andrew shared, under California law, pharmacists are authorized to substitute generic versions of prescribed medications unless the prescriber explicitly prohibits the substitution. But the same state authority does not currently include substituting biosimilars for prescribed reference biologics like the Stelera and Yosintek example, even when the biosimilar is FDA-approved and clinically equivalent for that patient. This means that Sharp Pharmacy team must undertake additional time-consuming steps and make multiple phone calls to individual physicians to clarify treatment plans and switch these medications. These administrative hurdles take physician time away from our patients and can delay patient care. SB 1094 removes those barriers by providing pharmacists with the authority needed to make these prescription changes to bias similars, as we do generics, and help protect limited health care dollars for everyone. Thank you.

Two minutes for lead opposition Good morning Madam Chair and members Brian Warren with the Biotechnology Innovation Organization We have an opposing less amended position on this bill today We'd like to thank the author and her staff for their responsiveness to our concerns, and we appreciate the amendments that are being done. However, they do not resolve our concerns. We have concerns with this bill for a number of reasons. One is that we don't believe that this is scientifically justified, and we believe that treating all biosimilars as if they are interchangeable undermines the authority of the FDA. The standard for approval of a biosimilar is that they are highly similar to the reference product and that there would be no clinically meaningful differences in the safety, purity, and potency. They are not tested for therapeutic equivalence. That is quite literally the approval process for the interchangeable designation for biosimilars, which pharmacists can currently substitute today without any prescriber authorization. We also believe that right now the FDA is already taking steps to ensure more biosimilars are authorized as interchangeable. They have streamlined the process, which we believe is the correct way to do it, is make it easy to get that interchangeability designation so that providers can have confidence that these can be substituted for patients without any adverse effects on their patient outcomes. We also believe that no one has demonstrated a need for this bill in terms of defining the barrier that currently exists. As mentioned, pharmacy substitution can already be done under existing law automatically for interchangeable products. And for non-interchangeable biosimilars, it can be done with a simple phone call to the prescriber's office, which is usually a one-time thing. Pharmacists can also substitute without prescriber approval, like the previous witness from Sharp Healthcare, if they are in an integrated system under authority that exists for pharmacists already. However, an important safety standard there is that there is a specific protocol that those substitutions can occur within. So it's very defined within a box, whereas this is a completely open process. Finally, our concern is that to understand the true impact on patients, you need to consider the context. Thank you.

Tim Madden, representing the California Rheumatology Alliance, we are opposed to SB 1094. We appreciate the time the author staff has provided us to talk through the bill and our concerns, and our folks are reviewing the amendments. Our concerns are centered around the impact SB 1094 will have on rheumatology patients and rheumatologists' ability to provide what they believe is the best care for their patients. The conditions patients have when seeing a rheumatologist are quite unique in that there are no cures. The most common condition rheumatology patients have is arthritis. Patients with these conditions experience chronic aching, throbbing, sharp, or burning sensations. For some patients, the pain renders them unable to get out of bed, go to work, or have any type of a functioning life. Treatments centered around trying to find the best medication that will help the patient. This is not always straightforward and can often take months of trying different medications to find the one that works best for the patient. One of our concerns with SB 1094 is the expansion allowing pharmacists to switch a patient from their current medication to any biosimilar. Biosimilars can be an effective choice, but every patient is going to react differently to a biosimilar, and the experience of a rheumatologist is there are patients who have negative reactions when switched. Reactions include a rash all the way up to a flare-up, which may cause the patient's condition to revert back to the levels when they're first being treated. A large concern, I've been told, is around the multiple switching that occurs at the specialty pharmacy between biosimilars and the lack of notification directly to the physician when a switch is made. One example was a patient switched from one biosimilar to another three times during a four-month period. The physician did not become aware of the multiple switches until the patient came into the office and was complaining of a rash. The dermatologist was left with trying to figure out which biosimilar caused the reaction and then what to prescribe to get the patient back on track. The amendments outlining the analysis do include a requirement for health plans to give patients and physicians at least 30 days notice when a switch is made. Appreciate it.

Good morning, Madam Chair and members. Tim Taylor with the National Federation of Independent Business in support.

Madam Chair and members, John Winger on behalf of America's Health Insurance Plans. Apologies for not getting our letter in on time, but we are in support.

Katie Van Dynes with Health Access California in support. We look forward to reviewing the committee amendments.

With the amendments outlined in the analysis, we'll be moving to neutral and thank the author and her staff for all the work.

Good morning. Adam Quinones with California Advocates on behalf of the Family Business Association

Good morning. Justin Fanzel on behalf of CVS in support.

Good morning. John Sherekin with the Association of California Life and Health Insurance Companies in strong

Good morning. Anthony Butler-Torres on behalf of the California Hispanic Chamber of Commerce in support.

Good morning, Chair and members. Allison Ramey on behalf of the Pharmaceutical Care Management Association in support.

Senator Strickland. Maybe some of the opposed and less amended. I've heard a few. Can one of you step up? You know, the author wants to bring down cost and, you know, going into the biosimilars and one of the testimonies was it should be the patient and the doctor that decides everybody wants to lower the cost. One, what is the amendment that you're seeking that would get you neutral to this bill? Because the author seems to be working with some of the other groups that get the...

And that's the amendment you're looking for?

Okay. And then...

Okay. And it's there, plain and simple. Okay. If the physician does not want to substitute, the patient doesn't want to substitute, the provider does have that ability when they write that prescription to check that box or write do not substitute. Well, one of the questions I just, the bottom line is, when it comes to biosimilars, someone testified that it could have a reverse effect if you use one drug, and even though it's a biosimilar, it could have a reverse effect on that patient. Is that often, happens frequently?

So it's all or nothing, is what you're saying.

I appreciate that. Thank you.

Yeah, no, any time you write a prescription, you can always put do not substitute. And I also just want to remind people that right now that happens with generics. So I prescribe a medication, a specific name of a medication, based on the pharmacist, the particular insurance company there may be something that costs lower so it will be switched at the pharmacy level and the at that point with that particular medication so the fact that in this bill we are informing providers that much more than what I get right now with generics I don get any kind of notification I find out when the patient says, can you refill this? And I'm like, what is this? And then I realized that that had been switched over. And so the concern of side effects, low, same thing with generics as well. So like my prescription is just, I get refills, like three to four refills, and I just go

So the physician would be notified when it is initially switched over. If the patient has any concerns or issues, of course, they'll contact the provider's office, and they can then reissue another prescription and say, do not substitute. And given the 30-day notice, a physician will have

Yes. So that already exists today. So it's similar to the scenarios that you're building. Similar to the scenarios that you have with your generic medication. Okay. And then to

Since it's a good question, and since that's a part of the amendments that were just put in the analysis, I'm getting that feedback right now. In the spirit of being corrected by my client, I do believe it's a step in the right direction because it kind of gets back to the place where it allows for that interaction between the physician and the patient to understand, okay, is this the right way to go? And the 30 days is a great window to then say either do not substitute or there are others, some provisions under existing law that are some exceptions that would allow the patient to not have to move on to that medication. So I think that's a great setup. But once again, that's in the health and safety code section and it applies to the health plans. So for this committee in the B&P code section, that is not a part that applies to pharmacists.

For clarification, health staff just reminded me that the 30-day is already what Medicare does. So for those that are deemed interchangeable, so we are just aligning with what is already in practice.

Oh, yes, they do.

Would anybody else like to comment?

Yeah, so a doctor can put do not substitute, do not switch for a variety of different reasons. If you're doing it initially, it may not be because you know of a reaction to that particular patient because that patient has never been on that medication. You may specifically like a certain type of medication, brand name medication.

If you say do not substitute and it is on the insurance formulary, then they have to go with what you have prescribed. So that is the step every do not substitute will have to go through for the approval from the insurance company.

So that is with any medication. So if I write a prescription for something that your insurance company does not cover, and I click do not substitute, then you would have to pay out of pocket for it. And some patients will do that. If they say, I want brand name, even though it's not covered, you can get the medication you would have to pay out of pocket.

If it's on the formulary.

For the brand name. Because you marked as do not substitute, and eventually insurance company agrees to that, to your order, doctor's order not to substitute,

That is probably something that that particular individual would have to take up with their insurance company.

This is not about the bill.

What your question is about the process and procedure this bill is very specific about the label

So there's a whole slew of amendments. I think it's probably in your committee analysis It's specifically item number seven in the background document and we're happy to go over The author is Has accepted adding the word safe to legislative intent provisions clarify that substitution for an alternative biological product by a pharmacist is a bio similar to or interchangeable with the prescribed reference product require the board to maintain a link to the purple book rather than a list of products FDA has determined or interchange of of products the FDA has determined are interchangeable, define reference product as having the same meaning as federal law, specify for purposes of requiring an enrollee to try the therapeutical, equivalent, generic, biosimilar, or interchangeable biological product that the plan must provide at least 30 days' advance notice to the enrollee and their prescribing provider prior to substitution and authorizes the enrollee or their provider to request an exception to the requirement to try an alternative product. specify that a plan is not authorized to alter or issue a prescription and make various technical and conforming changes so those are the amendments thank you for

Yeah. So I think what we heard are potential side effects. and you can have potential side effects with any medications, whether they're brand name or generic. The ones that were listed were actually considered very minor side effects, rashes, things like that. You can get that with any kind of medication that you're on. But to your point, when you listen to both sides, it's somewhat confusing, right? And I think a lot of the confusion has occurred because of what has happened at the federal level. So I don't think anyone would argue that biosimilars are safe and effective. You have to be safe, show efficacy and effectiveness in order to get FDA approval to be a biosimilar. The confusion has come in with the separate category that Congress put in a while ago that deemed some interchangeable. and in 2024 I believe there was a draft guidance that came out from Department of Health and Human Services that said one thing and since then the FDA has really looked at biosimilars, those that are interchangeable and those without the designation and they've looked at the studies that they required for getting that diagnosis and they've realized that pretty much biosimilars are just as effective whether you have that specific interchangeable diagnosis or not. They have actually introduced legislation, and it's also in your analysis, to eliminate this confusion that would eliminate the statutory distinction between biosimilars and interchangeables to help states and to help lower cost within the health care system because there is that realization that these are effective, These are safe whether you have that designation or not. And so this is what this bill basically says is that they the same This is what the FDA is finding out and they changing their policies And we need to ensure that we able to provide this for our patients but also to ensure that

Senator Nilo. I want to clarify some of that previous conversation and questions that I had in reading this. We have three categories, and there may be not as much a distinction on the second two based upon your prior comments. But first of all, there's the drug itself, which has gone through the FDA for initial approval. There are biosimilars, which are roughly equivalent to generic drugs, and then there are interchangeable biosimilars. And I think I heard you say that's a designation from Congress or FDA? Congress.

So FDA doesn't recognize the difference between a biosimilar or an interchangeable biosimilar.

And all of these are manufactured by different companies. There's a company that makes the basic drug itself, and there's a whole bunch of companies that make variations of it. Well, I won't use that word. Make biosimilars or interchangeable biosimilars, whatever they are, the generic equivalent of that drug. Now, presumably, physicians know this. They're familiar, I'm assuming, and tell me if I'm correct in assuming it or not, they are familiar with the drugs that are offered by the various companies, both the basic drug itself as well as the biosimilars, whether they're interchangeable biosimilars or not. They're going to know those drugs, the companies that make them, and what the doctor's perception is, the effects that they have. Is that a safe assumption?

So it would seem to me that if this bill passes, physicians are going to know the allowance as it's been changed by the bill. And the physician then can prescribe either the brand name drug itself or a specific biosimilar or a specific interchangeable biosimilar. or if the physician believes that there isn't a significant difference for that particular patient, prescribe the drug and allow for the pharmacist to make a decision.

Thank you.

Senator Archuleta. Thank you, Doctor, for presenting the bill. And as I'm hearing all this, I think it's a bill that is saving money for the consumer. At the same time, it's bringing the relationship with the doctor and the pharmacy even closer. Because now you have, and the patient, all working together to be able to say, doctor, I saw this on TV. I want this. Well, if that's what you want, that is your choice. and or you'll come back and say for the price, I think this will suffice, and or the pharmacy when they receive it and the doctor says nothing, then the pharmacy will be able to say, did you know that you can save money using this? And again, it goes back to the choice, to the patient. So because it all comes together, I think it's a good bill, and I would like to move it at the appropriate time.

Thank you. I want to thank the committee for all of your questions. This is a very important bill dealing with a very important issue. I want to thank, again, the committee staff and also the health committee staff on this bill. I want to thank all those who came out and spoke in support and opposition. But at the core of this bill is about affordability and access, which are key components for adherence to any treatment. It is about making sure Californians can get the care they need without having to choose between their health and their financial stability. We have many safe, effective, lower-cost alternatives to staggering, expensive biologics available today. But we're not using them to their full potential. This bill offers several practical ways to encourage biosimilar use to bring down the cost and inject more competition into a system that pharmaceutical manufacturers have controlled for far too long, doing this without compromising patient safety. Four out of ten Californians are struggling with medical debt. Six out of ten Californians report skipping medical care due to cost. And seven out of ten Californians are more worried about medical bills than the price of housing or utilities. With statistics like these, we need to get serious about addressing the rising cost of health care. And with that, I respectfully ask for an aye vote on SB 1094.

Aye.

Wahab?

Wahab, aye.

Aye.

Archuleta?

Archuleta, aye.

Aye.

Cabriero?

Cabriero, aye.

Aye.

Menjavar?

Menjavar, aye.

All right. That bill is 10 to 0. That bill is out. Thank you, everybody. BPED is adjourned. Thank you.