Two Consumer Groups Submit Proposals for Ballot Measures To Address Prescription Drug Costs

Two consumer groups on Monday unveiled prescription drug discount proposals that would "cover more people and take a tougher stance toward drug companies" than a plan proposed by Gov. Arnold Schwarzenegger (R) last month, the Sacramento Bee reports (Benson, Sacramento Bee, 1/25).

Schwarzenegger's California Rx plan would rely on voluntary discounts from drug companies to provide low-income state residents with discounts of about 40% on prescription drugs. The program, which the governor announced in his State of the State address, would be available to an estimated five million uninsured state residents. Pharmacies and drug makers would provide approximately equal shares of the discounts.

Health and Human Services Agency Secretary Kim Belshe said drug makers would participate voluntarily because of California's large purchasing power. State health officials said that all major drug makers -- represented by the Pharmaceutical Research and Manufacturers of America -- have agreed to participate in the program.

Sens. Deborah Ortiz (D-Sacramento) and Chuck Poochigian (R-Fresno) earlier this month introduced a bill (SB 19) that would implement California Rx, which, if approved, would begin enrolling members Jan. 1, 2006 (California Healthline, 1/7).

Some Democrats and consumer advocates have said that California Rx would cover "only a small group of Californians" and would lack "any enforcement muscle to bring drug companies to the table," the Bee reports.

Health Access and a consortium of consumer groups in the past week submitted separate proposals to the attorney general for measures that could appear on the next statewide ballot.

One proposal submitted on Monday by the consortium of advocates would allow residents to pay a $10 membership fee to join the state employee drug purchasing pool. The initiative would impose a $100,000 fine on drug companies that charge "excessive" prices or earn "unreasonable" profits.

Consumer advocate Jerry Flanagan said, "This initiative will harness the purchasing power of California to negotiate discounts on behalf of everyone in the state."

Health Access' proposal -- submitted last week -- would drop drug makers from Medi-Cal's $4 billion drug purchasing program if they did not offer similar discounts to the uninsured. The plan would apply to uninsured state residents with annual incomes that do not exceed 400% of the federal poverty level; Cal Rx would be available to uninsured state residents with annual incomes that do not exceed 300% of the federal poverty level.

Health Access' proposal is similar to a bill some Assembly Democrats have introduced.

Stan Rosenstein, deputy director of Medical Care Services at the Department of Health Services, said the administration has not yet reviewed the consortium's proposal. However, he noted that state officials believe linking drug discounts to Medi-Cal -- as proposed by the Health Access initiative and legislation sponsored by some Democrats -- would result in legal disputes and cause the state to lose rebate payments from drug makers.

"We don't think it's appropriate to condition the receipt of medication by a Medi-Cal beneficiary to a program for higher-income individuals," Rosenstein said.

PhRMA spokesperson Wanda Moebius said the group had not reviewed either proposed initiative and could not comment on the proposals (Sacramento Bee, 1/25).