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California coalition presses lawmakers to enact Rx discount plan

Consumer Coaltion Vows to Push California Lawmakers to Enact Prescription Drug Price Relief Following Defeat Of Prop. 79

Drug Company-Bankrolled Prop. 78 Also Rejected by Voters at the Polls Despite Record-Breaking Campaign Spending by Pharmaceutical Industry

Tuesday, November 8, 2005
SACRAMENTO, CA — Following a contentious campaign marked by record spending by the pharmaceutical industry, Californians today voted down both Prop 78 and Prop 79, the dueling prescription drug discount measures on the November 8 ballot. The coalition of consumer, senior, and health groups sponsoring Prop 79 announced that they intend to renew their push for a prescription drug discount plan when the state legislature reconvenes next year.
The pharmaceutical industry spent $80 million to promote Prop 78, the voluntary scheme sponsored by drug companies, and oppose Prop 79, the consumer coalition’s enforceable discount plan. Drug companies outspent the Prop 79 campaign, which reported $2 million in expenditures, by over 40 to one.
“The pharmaceutical industry may have succeeded in blocking prescription drug reform at the ballot, but we’ll be back next year to push even harder in the state legislature,” said Anthony Wright, Executive Director of Health Access California. “Millions of California families struggle to pay for the prescription drugs they need to stay healthy. While we fell short of our aim on election day, the momentum is growing for enacting real relief for Californians who are hurt by soaring drug prices.”
“The pharmaceutical industry tried to hoodwink voters with a toothless discount program that would have done little to rein in high drug prices,” said Elizabeth Imholz, Director of Consumers Union’s West Coast Office. “But Californians rejected the pharmaceutical industry’s big money campaign. Voters have made it clear that they want more than just a promise from drug companies to voluntarily lower prices.”
Prop. 79 would have enabled the state to use its market clout as a big purchaser of drugs to negotiate deep and enforceable discounts for Californians who cannot afford to pay high retail prices for prescription drugs. California buys over $4 billion of prescription drugs through the state’s Medi-Cal program each year and uses this massive purchasing power to negotiate discounts of 50 percent or more on many drugs. If a drug company refuses to meet the asking price, the state can steer business away from that company and toward others that agree to acceptable discounts. This negotiating strategy saved the state $510 million in the last fiscal year alone, while still ensuring that Medi-Cal patients get all medically necessary drugs.
Under Prop. 79, the state would have been empowered to use this same leverage to negotiate drug discounts for an estimated 8-10 million Californians who are uninsured, underinsured, or have high healthcare costs. Prop. 78 relied on drug manufacturers to voluntarily lower their prices and would have covered about half as many Californians as Prop 79. The voluntary program under Prop 78 could have ended at any time if not enough drug companies agreed to participate.

Anthony Wright – Health Access California, 916-442-2308
Elizabeth Imholz – Consumers Union, 415-431-6747