Pharmaceutical Companies Win With Defeat of Proposition 79

Tuesday's special election results "gave the pharmaceutical industry exactly what it wanted: the defeat of Proposition 79" -- not the approval of Proposition 78, the Sacramento Bee reports (Benson, Sacramento Bee, 11/10).

Proposition 78 would have established a voluntary prescription drug discount plan for state residents whose annual incomes do not exceed 300% of the federal poverty level. The measure was supported by the Pharmaceutical Research and Manufacturers of America.

Proposition 79, a measure supported by Health Access California and a coalition of labor groups, would have required drug makers to participate in a prescription drug discount program or face exclusion from the Medi-Cal formulary in some cases. To qualify, state residents' annual incomes could not have exceeded 400% of the federal poverty level. State residents who spend more than 5% of their annual income on health care also would have been eligible to participate in Proposition 79's drug discount program. In addition, people would have been allowed to sue a pharmaceutical company if they believe it is participating in illegal pricing practices.

With 100% of precincts reporting, 41.5% of Californians voted in favor of Proposition 78, while 58.5% voted 'no' on the measure. On Proposition 79, 38.9% of voters voted 'yes' and 61.1% voted 'no' (California Healthline, 11/9).

Darry Sragow, a political consultant and Democratic strategist, said pharmaceutical companies "made a great investment" with Proposition 78 because it had the most votes and would have won over Proposition 79 had both measures been approved. But "their biggest victory was if neither won, because that maintains the status quo," Sragow said.

Political and financial analysts also were watching the election closely "as a key test of the industry's ability to fend off mandatory discounts," the Los Angeles Times reports (Girion, Los Angeles Times, 11/10).

Democrats and consumer groups on Wednesday said they would work to pass legislation that gives discounts on prescription drugs for the uninsured and includes language to compel drug companies to participate. Assembly Majority Leader Dario Frommer (D-Glendale) said, "I think we can negotiate, but I'm not interested in a program that's voluntary (for drug companies)."

PhRMA President Billy Tauzin in a statement said the industry also is willing to negotiate, adding, "We have maintained from the beginning that the legislative process, working with the administration and the state Legislature, is the best way to set policy" (Sacramento Bee, 11/10).