SB 1094 changes biosimilar substitution and formulary requirements

What happened

California approved and filed SB 1094 on September 30. It permits pharmacist selection of a biosimilar or interchangeable biological product for a reference product when the prescriber has not prohibited substitution, subject to patient cost being no higher, patient communication and prescriber notification or electronic record entry within five days under the specified rules. The pharmacist retains responsibility for the selection, and the law preserves appropriate coverage controls. Separately, affected prescription-benefit contracts and policies issued, amended or renewed on or after January 1, 2027 must include at least one licensed biosimilar or interchangeable alternative for a formulary reference product when that alternative has lower net cost to the carrier.

For a carrier-directed trial of an alternative during continuing coverage, conditions include no prescriber substitution prohibition, lower net carrier cost, member cost sharing based on that net cost and no higher than the reference product, and at least 60 days’ advance notice with alternatives and exception instructions. Existing authorization for the reference product cannot simply require new authorization for the alternative, and the carrier cannot alter or issue a prescription. The text protects exception requests and bars exclusive use of an affiliated biosimilar when unaffiliated options exist. These continuing-coverage and switch sections exclude drugs prescribed for uses different from FDA marketing approval; those uses instead follow the separately referenced off-label coverage laws. It also sets January 15, 2027 provider notices and reporting beginning by October 1, 2027. As of October 4, dispensing authority, formulary implementation and continuity changes require separate preparation and commencement checks.

Why it matters

Substitution, formulary access and a carrier-required switch are different workflows, each with safeguards affecting prescriptions, member costs and continuity.

Implementation playbook

1. Confirm affected members, benefits and contracts against the final statutory scope. Managed Care · Due 2026-10-18
2. Reconcile dispensing authority, prescriber instructions, formulary selection and member continuity exceptions. Compliance · Due 2027-01-01
3. Validate updated workflows, communicate changes and monitor implementing guidance. Compliance · Due 2027-01-01

Sources

• SB1094 enacted final textOfficial · California Legislature · 2026-09-30 · Source review 2026-10-05