SB 1094 changes biosimilar substitution and formulary requirements
Oct 11, 2026 edition · GC-2026-0248 · Published 2026-10-11 · Version 3 · Final
SB 1094 distinguishes pharmacist substitution from carrier-directed biosimilar changes. Lower patient cost, prescriber instructions, continuity notices, and exception routes remain conditions alongside formulary, provider-notification, and reporting requirements.
What happened
A pharmacist may select a qualifying biosimilar as well as an interchangeable biological product, subject to a prescriber's no-substitution direction and a patient cost no higher than the prescribed product. The law retains patient notice and prescriber communication, including the specified five-day electronic-record route and alternatives. Separately, qualifying prescription-drug contracts issued, amended, or renewed from January 1, 2027 must list a qualifying alternative when the reference product is on the formulary and the alternative has a lower net cost to the carrier. Dispensing authority and formulary inclusion are therefore different decisions.
A carrier-directed switch must meet net-cost and member-cost-sharing conditions and provide at least sixty days' notice with identified alternatives, affected members, and applicable formulary or step-therapy exception instructions. An existing reference-product authorization does not require a new authorization for the alternative, and the act restricts affiliated-product-only requirements when unaffiliated biosimilars are available. Provider notices about listed reference/alternative products are due January 15, 2027, while reporting starts by October 1. These mechanisms preserve prescriber no-substitution and member exception routes rather than giving the carrier authority to rewrite a prescription.
Scope and timing
- Authority status
- Final
- Applicability
- Potentially applicable
- Audience
- Health systems, Provider networks, Health-tech
- Jurisdiction
- California
- Affected functions
- Managed Care, Compliance, Clinical Operations
- Responsible owner
- Managed Care
- Recorded date
- 2027-01-15
- Date type
- implementation
Why it matters
Pharmacy and benefit teams need consistent substitution and continuity rules.
Recommended action
Reconcile dispensing authority, prescriber instructions, formulary selection and member continuity exceptions.
Implementation playbook
- Confirm affected members, benefits and contracts against the final statutory scope. Managed Care · Due 2026-10-18
- Reconcile dispensing authority, prescriber instructions, formulary selection and member continuity exceptions. Compliance · Due 2027-01-01
- 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 2026-10-11
Complete edition and supplemental material
This finding in the complete approved report →Regulatory horizons, CIA trends and implementation trackers remain in the full report.
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