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Propositions 78 & 79: Prescription Drug Discounts |
LIBRARY Institute of Governmental Studies University of California 109 Moses Hall #2370 Berkeley, CA 94720-2370 510-642-1472 (voice) 510-643-0866 (fax) Statewide Returns from the California Secretary of State: Prop. 78: Support 41.5%, Oppose 58.5% Prop. 79: Support 39.3%, Oppose 60.7%
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With the the costs of prescription drugs rising, Californians now face shrinking coverage, higher co-pays and difficulty in obtaining the medication they need. Current California law requires pharmacies to sell prescription drugs at reduced prices for residents enrolled in the federal Medicare program. However, the pressure to introduce new pharmacy assistance programs has intensified in recent years. The urgency of the prescription drug issue has led to two measures on the November 8, 2005 Special Election ballot. Both initiatives would reduce prices for prescription drug users. One, supported by the pharmaceutical industry, would allow discounted drugs for those in financial need but would allow companies to drop their prices voluntarily. The other, supported by health and consumer groups, would mandate an agreement between the California Department of Health Services and drug companies which would keep drug prices lower for low and middle income prescription drug consumers.
Prop. 78: California State Pharmacy Assistance Program
The California State Pharmacy Assistance Program is a measure promoted by drug manufacturers to provide voluntary prescription drug discounts. The proposition would establish a state program called Cal RX, which would reduce the costs of prescription drugs for low and middle income residents. The program would establish a discount card system which would qualify consumers for discounts at pharmacies. The card would be available to individuals and families which meet federal poverty conditions. Individuals who make $28,000 or lower and families of four who make $56,000 or under would be eligible. The program would be available to residents who do not currently have private health care benefits or state benefits programs. Consumers would apply for the card from Cal RX and would pay an annual $15 fee to pharmacies. The California Department of Health Services would administer the program. Under the program, pharmacies who choose to participate in the program would negotiate an agreement with the state to sell certain prescription drugs at a discount to Cal RX card users. Drug companies would then send rebates to the state which would then transfer the money back to consumers who purchased the drugs.
The measure was previously attempted as SB 19 which was defeated by Senate Health Committee in May. The language was also submitted as a ballot measure on February 4, 2005. The effort to qualify the ballot measure was sponsored by the Pharmaceutical Research and Manufacturers of America. Other backers of the initiatives include Republicans in the legislature and Governor Arnold Schwarzenegger. The proposition was launched to counter the Cheaper Prescription Drugs for California Act (see above). The proposal has met with resistance from health groups who say that the proposal is an effort by drug companies to maintain high profits while offering an inadequate solution to the drug coverage crisis. They point to the fact that there are no penalties for companies that do not reduce prices. They also cite the fact that the state would carry the administrative and outreach costs of the program. Proponents of the measure claim that the program would be beneficial to both the drug companies and individual drug users, with an average discount of at least 40% off regular retail prices.
Prop. 79: Cheaper Prescription Drugs for California Act
The Cheaper Prescription Drugs for California Act is a proposal that would establish a program which would administer prescription drug discounts for low-income Californians. This measure revives the language of legislation that passed the Legislature, but was vetoed by the governor. Under the measure, eligible residents would be able to apply for a discount card which they could present to pharmacies for discounts on their drug purchases. Individuals who make $37,000 or less a year and families of four who make $75,000 or less a year could participate in the program. The card would also be available to individuals from wealthier families who have medical expenses that exceed 5% of their family's income. Residents who participate in the program would pay a $10 annual fee to pharmacies. The California Department of Health Services would administer the program.
Individual pharmacies could choose to voluntarily participate in the program and would sell drugs at prices pre-negotiated with the state. The state would receive rebates from drug companies which would then be sent on to consumers. The Cheaper Prescription Drugs for California Act differs chiefly from the opposing initiative in that it would hold drug makers accountable if they did not sell their drugs at significantly discounted prices for the new program. The program would mandate that the Department of Health Services would seek rebates from drug companies equal to prices established for federal programs. Companies that did not negotiate discounts could be barred from selling drugs to the state Medi-Cal program. Currently, drugs do not have to have prior authorization to be included in Medi-Cal. Inclusion in the Medi-Cal program currently earns drug companies more than $4 billion annually.
The Cheaper Prescription Drugs for California Act is supported by health care organizations, labor groups and many Democratic legislators. On March 15, 2005, the Pharmaceutical Research and Manufacturers of America (PHRMA) filed a lawsuit challenging the legality of the act. PHRMA is a drug trade group which represents 48 of the leading pharmaceutical companies in the United States. They assert that a segment of the initiative violates the state Constitution in that it names the California Chamber of Commerce and the California Labor Federation AFL-CIO as partners in setting up purchasing programs for small employers. Health Access, one of the groups supporting the Act, claims that the pharmaceutical industry is threatened by the initiative and is seeking any way to halt its progress.
Groups who oppose the initiative claim that the discounts mandated by the Cheaper Prescription Drugs for California Act would be far too expensive for companies to cover. They claim that California State Pharmacy Assistance Program (a PHRMA backed iniative - see below) is a much fairer proposition. Supporters of the Act believe that the Cheaper Prescription Drugs for California Act will allow for an estimated 10 million low and middle income Californians to gain necessary medications. They also say that the Act will force drug companies to provide drugs at affordable prices.
Official
Voter InformationProposition 78
Official Voter Information Guide
Campaign Finance:
Individual Campaign Committees
Total Contributions and Expenditures (select "Nov. 2005 election" and "Prop. 78" in dropdown boxes)
Proposition 79
Official Voter Information Guide
Campaign Finance:
Individual Campaign Committees
Total Contributions and Expenditures (select "Nov. 2005 election" and "Prop. 79" in dropdown boxes)
Better California
Anti-Prop. 78 site from Alliance for a Better California. Also includes a Pro-Prop. 79 site.
California Department of Health Services
California Healthcare Foundation
2005 Election resource for health-related initiatives.Californians For Affordable Prescriptions
Pro-Proposition 78 site.
California Health Care Foundation
Non-Partisan analysis of both propositions
California Labor Foundation, AFL-CIO
The California Labor Foundation supports the Cheaper Prescription Drugs for California ActHealth Access California
Pro-Proposition 79 site.Health Vote
Non-partisan analysis of Prop. 78.
Health Vote
Non-partisan analysis of Prop. 79.Prop. 78 site
Prop. 79 site
League of Women Voters sites.Pharmaceutical Research and Manufacturers of America
Group financing Proposition 78.
Vote Yes on Prop. 79
Joyce, Geoffrey
F.; Schuster, Cynthia; Trivedi, Manan.
The
Right Prescription for California? An Analysis of Propositions 78 and 79:
RAND, Oct. 21, 2005.
Public
Opinion
Knowledge Networks 2005 Election Survey. Palo Alto, Hoover Institute, Nov. 7, 2005.
Schwarzenegger Propositions Still Trailing: Three of four ballot initiatives backed by Governor are behind
and Proposition 75 is now in a dead heat. Support for both prescription drug initiatives falls. Polimetrix poll, Nov. 6, 2005.
"Voters moving to the NO side on each of the three health-related ballot initiatives – Propositions 73, 78 and 79," Field Poll, Release 2175, Nov. 2, 2005.
Knowledge Networks
2005 Election Survey. Palo Alto, Hoover Institute, Oct. 17, 2005.
Methodology
and results of survey one
Methodology
and results of survey two
"Special
Survey on Californians and the Initiative Process", PPIC Statewide
Survey, Public Policy Institute, September 2005
"Both
prescription drug intitiatives, Props. 78 and 79, are leading, but few voters
can identify the proponents of each initiative: voters divided on Prop. 73,
the Parental notification of teen abortion initiative," Field
Poll, Release 2169, Sept. 6, 2005.
"Union dues consent initiative getting heavy initial support, as do two drug discount propositions. Voters narrowly back parental notification for teen abortion," Field Poll, Release 2160, June 22, 2005.
Selected
Newspaper Articles Girion, Lisa.
"Drug Industry Wins Despite Defeat, Some Say: With discount initiatives rejected, the companies maintain the status quo, political experts say," Los Angeles Times, Nov. 10, 2005.
NewsBank (UCB)Colliver, Victoria.
"Prescriptions:Measures to provide drugs to lower-income residents both rejected by voters," San Francisco Chronicle, Nov. 9, 2005.
San Francisco ChronicleMorain, Dan.
"Drug Firms Gave Money to Some Who Endorsed Proposition 78," Los Angeles Times, Nov. 4, 2005.
NewsBank (UCB)Richman, Josh.
"Lawmakers call brochure on drug initiatives misleading: Lee among politicians unhappy about inclusion in pro-78, anti-79 mailer," Oakland Tribune, Nov. 3, 2005.
Oakland TribuneColliver, Victoria.
"$80 million battle over drug measures costliest ever in state," San Francisco Chronicle, Nov. 2, 2005.
San Francisco ChronicleLucas, Greg.
"Field Poll: Props. 73, 78 and 79 are also trailing" Reasons vary, but governor's plan isn't one of them." San Francisco Chronicle, Nov. 2, 2005.
San Francisco ChronicleMorain, Dan.
"Drug Makers Shatter Campaign Records: The industry spends $76.5 million to back Proposition 78 and fight Proposition 79," Los Angeles Times, Oct. 28, 2005.
NewsBank (UCB)Ainsworth, Bill
"Drug industry's hiring of black leaders gets endorsement results," San Diego Union-Tribune, Oct. 27, 2005.
NewsBank (UCB)Ainsworth, Bill.
"Drug industry ties to backers of initiatives is questioned," San Diego Union-Tribune, Oct. 27, 2005.
NewsBank (UCB)"Prop. 79 ad brings up trial lawyers," Sacramento Bee, Oct. 25, 2005.
NewsBank (UCB)[Opinion].
"How to lower the cost of drugs," San Francisco Chronicle, Oct. 23, 2005.
San Francisco ChronicleBenson, Clea.
"Drug-discount proposals dueling on Nov. 8 ballot," Modesto Bee, Oct. 20, 2005.
NewsBank (UCB)Ainsworth, Bill.
"$80 million spent by foes of `hammer' in drug plan," San Diego Union-Tribune, Oct. 18, 2005.
NewsBank (UCB)Lui, Earl.
"The best RX for assisting with pharmacy costs: Prop. 79: Enforces prescription drug discounts," San Francisco Chronicle, Oct. 18, 2005.
San Francisco ChronicleRemak, William.
"The best RX for assisting with pharmacy costs: Prop. 78: Delivers drug discounts to the poor," San Francisco Chronicle, Oct. 18, 2005.
San Francisco ChronicleBenson, Clea.
"Rival plans target pain of uninsured," Sacramento Bee, Oct. 14, 2005.
NewsBank (UCB)Sheppard, Harrison.
"Prop. 78: Pro: Drug discounts to aid many," Daily News of Los Angeles, Oct. 14, 2005.
NewsBank (UCB)Sheppard, Harrison.
"Prop. 78: Con: Firms not required to take part," Los Angeles Daily News, Oct. 14, 2005.
NewsBank (UCB)[Opinion]
"Stop the Schwarzenegger power grab. Yes on 79, no on 78. Sandoval for assessor. Complete recommendations for the Nov. 8 election," San Francisco Bay Guardian, Oct. 13, 2005.
San Francisco Bay GuardianColliver, Victoria.
"Props. 78, 79 backers make the difference: Consumers support one initiative; other it's the drugmakers," San Francisco Chronicle, Oct. 13, 2005.
San Francisco Chronicle
Benson, Clea.
"Ad targets drug firm opposition to Proposition 79," Sacramento Bee, Oct. 9, 2005.
NewsBank (UCB)Gittelsohn, John.
"Record cash raised for special election: Drug industry alone collects $80 million to back Prop. 78 and beat Prop. 79. Pro-Schwarzenegger
on the ballot, Anti-Schwarzenegger," Orange County Register, Sept. 30, 2005.
NewsBank (UCB)Girion, Lisa.
"Prop. 78 May Suffer From Drug Makers' Poor Image: The industry is spending millions on the discount plan but a poll shows distrust of the backers," Los Angeles Times, Sept. 30, 2005.
NewsBank (UCB)Girion, Lisa.
"Comparing the Drug Discount Initiatives," Los Angeles Times, Sept. 30, 2005.
NewsBank (UCB)Girion, Lisa.
"AARP Opposes Pharmaceutical Industry's Proposition 78," Los Angeles Times, Sept. 29, 2005.
NewsBank (UCB)Gledhill, Lynda.
"Voters unhappy with governor, his initiatives -- poll: 55% disapprove of job he is doing, none of his measures in survey top 43% approval," San Francisco Chronicle, Sept. 29, 2005.
San Francisco ChronicleSchrag, Peter [Opinion].
"The governor makes the election choices easy," Sacramento Bee, Sept. 28, 2005.
NewsBank (UCB)Salladay, Robert; Morain, Dan.
"Gov. Donates $1.25 Million, Backs 6 Initiatives," Los Angeles Times, Sept. 24, 2005.
NewsBank (UCB)Lucas, Greg.
"Support slips for plan pushed by drug firms: Neither low-income prescription initiative backed by majority," San Francisco Chronicle, Sept. 6, 2005.
San Francisco ChronicleHiltzik, Michael [Opinion].
"Drug firms try to fool voters," Los Angeles Times, Aug. 25, 2005.
NewsBank (UCB)Benson, Clea.
"Drug-benefit initiatives are complicated," Sacramento Bee, Aug. 23, 2005.
NewsBank (UCB)Ainsworth, Bill.
"Fight over drug costs picks up in California: Dueling initiatives offer very different programs," San Diego Union-Tribune, Aug. 22, 2005.
NewsBank (UCB)Bluth, Alexa H.
"Drug firms begin ad campaign: TV spot fights wider discount programs under Prop. 79," Sacramento Bee, Aug. 16, 2005.
NewsBank (UCB)Morain, Dan; Vogel, Nancy.
"2005 political fundraising at $226 million: National drug firms supporting Prop. 78 on the fall ballot lead the way in candidates' and causes' efforts to build war chests," Los Angeles Times, Aug. 2, 2005.
NewsBank (UCB)Hilzik, Michael.
"Drug Firms' $50-Million California Prescription," Los Angeles Times, July 25, 2005.
NewsBank (UCB)Benson, Clea.
"Lots of cash for ballot clash: Drug firms spend big to beat one plan, boost own," Sacramento Bee, July 17, 2005.
NewsBank (UCB)"Drug firms arming for battle at ballot box: $43 million in past month alone given to fight stringent prescription discounts," San Francisco Chronicle, July 13, 2005.
San Francisco ChroniclePollack, Andrew.
"Rival Drug Discount Plans On Fall Ballot in California," New York Times, July 8, 2005.
ProQuest (UCB)Furillo, Andy.
"Union dues measure leads in early poll: Labor consultant says margin will narrow as campaign unfolds," Sacramento Bee, June 23, 2005.
NewsBank (UCB)
"Union dues initiative drawing early support: 57% back measure to trim political power of public employee unions," San Francisco Chronicle, June 23, 2005.
San Francisco Chronicle
"Drug plan qualifies for special election," San Jose Mercury-News, June 16, 2005.
NewsBank (UCB)Rau, Jordan.
"Governor Puts Agenda on the Ballot: Three special-election initiatives would wrest power from legislators and public employee unions: The political battle will be costly, with a deal unlikely," Los Angeles Times, June 14, 2005.
NewsBank (UCB)Ainsworth, Bill.
"Governor sets Nov. 8 for special election: 3 measures essential to his reform, he says," San Diego Union-Tribune, June 14, 2005.
NewsBank (UCB)Herdt, Timm [Opinion].
"Wanna sign this petition?" Ventura County Star, June 8, 2005.
NewsBank (UCB)Walters, Dan [Opinion].
"But will they vote?" Long Beach Press-Telegram, June 1, 2005.
NewsBank (UCB)
[Opinion]
"The prescription: Compromise pills: Legislative remedy for soaring drug prices is needed," San Jose Mercury News, May 16, 2005.
NewsBank (UCB)
Rau, Jordan.
"Drug Industry Sues to Block Ballot Initiative: The action seeks to bar officials from verifying signatures on the proposal, which would force firms to cut prescription prices," Los Angeles Times, May 13, 2005.
NewsBank (UCB)Berthelsen, Christian.
"Energy reregulation might make ballot: Group also has signatures for drug-cost measure," San Francisco Chronicle, May 11, 2005.
San Francisco Chronicle
Rau, Jordan.
"Deal on Cheaper Medicines Unravels: Senate panel rejects governor's plan. Many Democrats back a more stringent rival bill," Los Angeles Times, Apr. 28, 2005.
NewsBank (UCB)
Furillo, Andy.
"Labor says initiative good to go: Drug price plan has plenty of signatures, say backers," Sacramento Bee, Apr. 15, 2005.
NewsBank (UCB)
Furillo, Andy.
"Lawyers, drug companies huddle: Talks aim at a truce over initiative campaigns that would hurt pocketbooks of both interest groups," Sacramento Bee, Apr. 15, 2005.
NewsBank (UCB)
Strassman, Marc.
"Major drug companies launch multi-media "Cal Rx" initiative campaign," California Politics Today, issue #314, April 12, 2005.
California Politics TodayFurillo, Andy.
"Drug firms pull initiative to cap attorney fees," Sacramento Bee, Apr. 5, 2005.
NewsBank (UCB)Furillo, Andy.
"Lawyers, drug companies huddle: Talks aim at a truce over initiative campaigns that would hurt pocketbooks of both interest groups," Sacramento Bee, Mar. 25, 2005.
NewsBank (UCB)Folmar, Kate.
"Big money put behind drug-cost campaign: Pharmaceutical industry wants to seize initiative," Sacramento Bee, Mar. 12, 2005.
NewsBank (UCB)Chorneau, Tom.
"Drug companies' PAC gives big after Schwarzenegger's vetoes," The Bakersfield, March 10, 2005.
The BakersfieldFurillo, Andy; Delsohn.
"Drug firms may back 3 initiatives: Industry group is set to spend $10 million on ballot measures," Sacramento Bee, Feb. 15, 2005.
NewsBank (UCB)Benson, Clean.
"Consumer groups aiming to put drug plans on ballot," Sacramento Bee, Jan. 25, 2005.
NewsBank (UCB)
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