Legislative Update

Lower-income consumers could obtain discounts of 40% on brand-name drugs and 60% on generic medications under a bill signed into law last week by Gov. Arnold Schwarzenegger (R). The legislation was the result of a compromise between Schwarzenegger, Assembly Speaker Fabian Nuñez (D-Los Angeles) and Senate President Pro Tempore Don Perata (D-Oakland). Pending approval by CMS, the law will require pharmaceutical companies to begin offering the discounts within three years or face restrictions on selling their products to Medi-Cal, California's Medicaid program. Schwarzenegger has described the measure as "a critical step in addressing access to affordable health care." Lawmakers involved in the drafting of the legislation expect drug makers to file a lawsuit to block provisions of the law from taking effect, but representatives from the Pharmaceutical Researchers and Manufacturers of America have declined to comment on their intentions.

The governor acted on a number of other bills by last Saturday's deadline, including signing a measure that will limit how much hospitals can charge uninsured and underinsured patients who have incomes lower than 350% of the federal poverty level. Schwarzenegger in 2004 vetoed similar legislation, saying at the time that the state should wait to see if voluntary hospital pricing guidelines were effective in addressing concerns about billing practices.

Of the bills sent to his desk this year, Schwarzenegger signed 910 and vetoed 262. The 2007-2008 legislative session begins Dec. 4.

This week's Legislative Update also highlights several other measures Schwarzenegger acted on, including:

• A bill that will allow regulators to grant two-year extensions for some hospitals to meet state seismic safety standards;
  
  
• Legislation that will create a statewide biomonitoring program; and
  
  
• A measure that will prohibit hospitals from transporting homeless patients to other counties for treatment.