NEW YORK – California Gov. Gavin Newsom on Saturday announced he has signed a bill into law specifying that pharmacogenetic testing is a covered benefit under the Medi-Cal program, subject to utilization controls and when supported by evidence-based clinical practice guidelines.
Medi-Cal is California's healthcare coverage program for low-income residents, and AB 425 makes pharmacogenetic testing a covered benefit under this program starting July 1, 2024.
A few years ago, California legislators had advanced SB 1191, which would have similarly provided Medi-Cal coverage for PGx testing if the drug being considered for the beneficiary was known to have a gene-drug or drug-drug-gene interaction deemed clinically actionable by the US Food and Drug Administration or by the Clinical Pharmacogenetics Implementation Consortium (CPIC), an internationally recognized guidelines body.
However, Newsom declined to sign that bill last year, citing budgetary concerns. "Although this bill is contingent upon an appropriation, it creates tens of millions of dollars in General Fund cost pressures not accounted for in the budget," Newsom wrote in a September 2022 letter explaining his veto of SB 1191. He added that it is important to remain disciplined while the state is facing lower-than-expected revenues over the first few months of this fiscal year, and bills like this, with a significant financial impact, should be accounted for in the annual budget process.
The governor sparked controversy last year when he vetoed another bill, SB 912, that would have provided automatic insurance coverage of biomarker tests when supported by medical and scientific evidence. In that case, Newsom felt that the criteria for test coverage needed to be more specific and expressed concern that nationally recognized practice guidelines and consensus statements may not be evidence-based.
In the latest version of the PGx test coverage bill that Newsom signed, state legislators connected the need for such testing with the opioid crisis. In advancing the bill, "the legislature seeks to curb the opioid crisis in California, which is exacerbated by genetic changes in individuals that create unintended 'high' feelings or no pain relief, prompting increases in opioid dependency," according to the text of the legislation.
The bill also contains general language stating that PGx tests will be covered in line with evidence-based clinical practice guidelines, and the program will advance measures aimed at curbing medically unnecessary utilization.
In introducing AB 425 earlier this year, California Assemblymember David Alvarez, D-San Diego, noted that by covering PGx testing through Medi-Cal, the state can expect reductions in emergency room visits, hospitalizations, and overall healthcare expenditures and advance health equity.
San Francisco-based genetic testing firm Invitae was also a sponsor of the bill, and Chantelle Schenning, Invitae's VP of healthcare transformation and policy, said in a statement in February, around the time of the bill's introduction, "With PGx testing, patient safety and quality of care can be improved by reducing trial and error medication management and cutting healthcare costs. Women and people of color are more likely to suffer from preventable adverse drug events."
However, Invitae has undergone significant restructuring and layoffs over the past year and decided in June to stop providing PGx testing as part of efforts to optimize its testing portfolio.