Introduction
California recently enacted several healthcare and prescription drug laws that may affect utilization management, specialty pharmacy, and formulary administration beginning January 1, 2027. While the legislation addresses a variety of healthcare topics, three laws stand out because of their potential implications for pharmacy operations, prior authorization processes, and medication access. [1-3]
Rare Disease Therapies Face New Prior Authorization Timelines
AB 1887: Prescription Drug Coverage for Rare Diseases
AB 1887 establishes new requirements for prior authorization decisions involving FDA-approved rare disease therapies. Under the law, prior authorization determinations must be completed within 30 days for applicable rare disease medications covered by policies issued, amended, or renewed on or after January 1, 2027. [1]
Why It Matters
Rare disease therapies are often among the most complex and costly specialty medications available. These treatments frequently require extensive clinical review due to their unique indications and high costs. The new timeline may require payers, PBMs, and utilization management teams to evaluate existing workflows to ensure timely review and decision making. [1]
Changes to Utilization Management for HIV Prevention Therapies
SB 1023: Health Care Coverage for Antiretroviral Drugs, Drug Devices, and Drug Products
SB 1023 prohibits prior authorization and step therapy requirements for medically necessary antiretroviral drugs and devices used for HIV prevention. [2]
Why It Matters
Prior authorization and step therapy are commonly used utilization management tools designed to support safe, effective, and cost-conscious medication use. Under SB 1023, those tools will no longer apply to this specific category of therapy. [2]
The law may require healthcare plans and pharmacy benefit administrators to update coverage policies, utilization management programs, and administrative processes. More broadly, it represents a growing trend toward expanding direct access to certain preventive therapies. [2]
Expanded Authority for Biosimilar Substitution
SB 1094: Prescription Drugs
SB 1094 allows pharmacists to select certain alternative biosimilar or interchangeable biological products under specified circumstances. [3]
Why It Matters
Biosimilars continue to play an increasingly important role in specialty pharmacy as more biologic products face competition. SB 1094 expands pharmacist authority to substitute certain biosimilar and interchangeable biological products under specified circumstances.
Expanded substitution flexibility may influence:
Dispensing practices
Formulary administration
Biosimilar adoption strategies
Key Takeaways
1. Rare disease therapies may face faster prior authorization timelines.
AB 1887 requires prior authorization decisions for certain FDA-approved rare disease therapies to be completed within 30 days beginning in 2027. [1]
2. Utilization management requirements are changing for select therapies.
SB 1023 removes prior authorization and step therapy requirements for medically necessary HIV prevention medications and devices. [2]
3. Biosimilars continue to gain momentum.
SB 1094 expands pharmacist authority to substitute certain biosimilar and interchangeable biological products, reflecting the growing role of biosimilars in specialty pharmacy. [3]
By: Sarah Cirildo, PharmD
For questions, e-mail pharmd@prodigyrx.com
Citations
1. California Legislature. AB 1887: Prescription Drug Coverage for Rare Diseases. Signed September 27, 2026. Effective January 1, 2027. Accessed October 26, 2026. Available at: https://leginfo.legislature.ca.gov
2. California Legislature. SB 1023: Health Care Coverage: Antiretroviral Drugs, Drug Devices, and Drug Products. Signed September 26, 2026. Effective January 1, 2027. Accessed October 26, 2026. Available at: https://leginfo.legislature.ca.gov
3. California Legislature. SB 1094: Prescription Drugs. Signed September 30, 2026. Effective January 1, 2027. Accessed October 26, 2026. Available at: https://leginfo.legislature.ca.gov
