Senate Committee Rejects California Rx Plan

The Senate Health Committee on Wednesday rejected a bill (SB 19) that would have enacted Gov. Arnold Schwarzenegger's (R) California Rx plan, the Los Angeles Times reports. Despite support from committee Chair Deborah Ortiz (D-Sacramento) and Senate Republicans, the proposal failed when all committee Democrats other than Ortiz voted against it (Rau, Los Angeles Times, 4/28).

California Rx would have been available to an estimated five million uninsured state residents. Pharmacies and drug makers had agreed to voluntarily provide approximately equal shares of the discounts, which would have amounted to about 40% off retail drug prices.

State health officials said that all major drug makers -- represented by the Pharmaceutical Research and Manufacturers of America -- had agreed to participate in the program.

Provisions of the plan, which would have been available for those with annual incomes less than 300% of the federal poverty level, would have included:

• A discount card that would have required an annual $15 fee from participants;
  
  
• A requirement for participating manufacturers to offer drugs at the lowest price paid by any commercial buyer in the state;
  
  
• A requirement for pharmacies to grant participants discounts similar to those given to large buyers;
  
  
• A discount available for all uninsured residents, as well as those who have some health care coverage but must pay full price for some medications; and
  
  
• A Web site, funded by $10 million from PhRMA, that would have helped state residents enroll in existing drug maker discount programs. The state general fund also would have contributed $4 million to create the Web site.
  

Critics of California Rx said the plan was inadequate because it relied on drug companies to voluntarily lower prices and did not penalize companies that declined to participate.

According to the Times, many Democrats support a proposal by Assembly Majority Leader Dario Frommer (D-Glendale) that features higher income-eligibility guidelines. Frommer's bill, which is pending in the Assembly and in a ballot measure written by Health Access California, would penalize drug makers that do not participate.

"[C]omplex political jockeying" over prescription drug plans in the Assembly "makes it less likely" that a deal will be reached in 2005, the Times reports. However, legislators who favor Frommer's proposal "will have greater motivation to strike a deal" with Schwarzenegger if he does not call a special election, according to the Times.

Ortiz said she would consider rewriting and reintroducing the California Rx proposal this year. She said there is a possibility for compromise on prescription drug bills in the Legislature.

Ortiz attributed the bill's failure to "a lot of pressure from the unions, and it had to do with the battle they've got with the governor." Ortiz added, "We've lost the opportunity to serve five million Californians."

Frommer said the bill failed because it lacked public support and was "written and backed" by the pharmaceutical industry.

Schwarzenegger spokesperson Margita Thompson said the bill's defeat was "another example of lawmakers putting politics before good public policy and the people of California suffering as a result."

Anthony Wright, executive director of Health Access, said, "The governor put a lot of chits on this plan, and it didn't get out of this first committee" (Los Angeles Times, 4/28).