Drug Discount Initiatives Similar to Ohio, Maine Programs
California voters following the Proposition 78 and Proposition 79 campaigns "can expect to hear a lot about Maine and Ohio" because supporters for both proposals say their plans are modeled after laws creating drug discount programs in those states, the Sacramento Bee reports (Benson, Sacramento Bee, 8/7).
Proposition 79, which consumer groups and unions support, would exclude drug companies from the Medi-Cal formulary if they do not offer discounts on drugs to state residents whose incomes do not exceed 400% of the federal poverty level. Proposition 78, an initiative sponsored by the drug industry, would create a voluntary drug discount program for which state residents whose annual incomes do not exceed 300% of the federal poverty level would be eligible to participate (California Healthline, 7/18).
Supporters of Proposition 79 say it is modeled on the Maine Rx Plus program. Maine became a "bellwether" for other states in 2000 when it passed a law that allowed the state to limit Medicaid sales from companies that did not offer discounts, the Bee reports. However, as a result of court challenges from the Pharmaceutical Research and Manufacturers of America, Maine altered the program and has not enforced the penalty clause against pharmaceutical companies.
Meanwhile, backers of Proposition 78 cite the Ohio's Best Rx program, which relies on drug companies to voluntarily offer discounts to eligible beneficiaries. Consumer groups in Ohio initially attempted to establish a program similar to the Maine program through a ballot initiative in 2003, but PhRMA "effectively block[ed] it," the Bee reports. Consumer groups and drug companies eventually agreed to a compromise measure, which the Ohio Legislature approved.
"[I]n practice, neither program stands as a clear model" for California voters in part because most discounts in both programs thus far have come from pharmacies, rather than drug companies, the Bee reports.
To date, Maine's program has enrolled about 100,000 of the approximately 225,000 eligible beneficiaries into the program, while Ohio has enrolled about 25,000 of roughly 1.2 million eligible persons (Sacramento Bee, 8/7).
The campaign is sure to be "one of the costliest campaigns in U.S. history," the AP/San Jose Mercury News reports. PhRMA since June has collected more than $59 million for an industry-controlled account known as the California Initiative Fund. Pfizer, Merck and GlaxoSmithKline each made contributions of nearly $8.4 million (Fouhy, AP/San Jose Mercury News, 8/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.