The pharmaceutical industry-backed effort to defeat a statewide ballot initiative intended to lower prescription drug costs has garnered the endorsements of the associations representing California’s doctors, psychiatrists and other providers, as well as of groups fighting specific diseases.
The California Medical Association, the California Psychiatric Association and the California chapter of the American College of Obstetricians and Gynecologists are all opposed to the California Drug Price Relief Act, according to Californians Against the Misleading Rx Measure.
The effort to defeat the initiative also has the backing of the Ovarian Cancer Coalition of Greater California, the American Liver Foundation – Pacific Coast Division, the Lupus Foundation of Southern California and the California Hepatitis C Task Force, the measure’s opponents say.
The initiative would require the state to pay no more than the lowest price the U.S. Department of Veterans Affairs is charged for a particular prescription. Federally-mandated discounts lower the prices the VA pays for drugs, and the agency “regularly negotiates additional discounts,” according to the state’s nonpartisan Legislative Analyst’s Office.
The VA typically buys drugs at prices about 40 percent below what drug makers charge states, according to the measure’s proponent, the AIDS Healthcare Foundation.
If approved by the voters, the new policy would apply to any program in which the state is the ultimate payer for a drug, including Medi-Cal fee-for-service plans and CalPERS, which provides health benefits to current and retired state employees. Adding in prison inmates and people receiving AIDS drugs from the government, the initiative would affect drug prices for programs serving some 5 million people, according to its backers.
The AIDS Healthcare Foundation predicts the measure would save taxpayers approximately $5.7 billion over 10 years.
But Bill Remak, chairman of the California Hepatitis C Task Force, says his organization believes that “drug costs could go up and our patients could see delays in getting the prescriptions they need” if voters approve the initiative.
That argument echoes those made by Californians Against the Misleading Rx Measure, which is sponsored by Pharmaceutical Research and Manufacturers of America.
The state’s nonpartisan Legislative Analyst’s Office says “the fiscal impact of this initiative is unknown,” according to a presentation it made to an Assembly committee earlier this month. The Analyst’s Office says it cannot make an estimate in part because of “a lack of transparency around what prices the VA pays” for drugs.
The VA has not confirmed whether its published drug prices “accurately identify the lowest prices the VA pays,” and “it is also uncertain whether public disclosure of the lowest prices paid would be required or exempt” under the Federal Freedom of Information Act, the analysis says.
Another issue impeding the Analyst’s Office’s ability to estimate the measure’s impact is “uncertainty around how manufacturers might alter prescription drug prices as a market response to this initiative,” according to the presentation.
The industry has suggested that the ballot measure will prompt it to change course in its dealings with the state. In its release announcing the endorsements of the medical groups and other organizations, Californians Against the Misleading Rx Measure says the initiative “would likely invalidate existing contracts the state has negotiated with pharmaceutical manufacturers, increasing state costs for prescription drugs by tens of millions of dollars and reducing funding for Medi-Cal.”
Pharmaceutical Research and Manufacturers of America has raised more than $68 million for the effort to defeat the initiative. That dwarfs the roughly $4 million raised by Californians for Lower Drug Prices, the pro-initiative effort funded in large part by the AIDS Healthcare Foundation.
The Yes campaign has secured the backing of the California branch of the AARP, as well as of the California Nurses Association and presidential candidate Sen. Bernie Sanders (D-Vermont).
Garry South, campaign director for the initiative’s backers, alleges that some groups opposing the initiative are doing so because they receive funding from the pharmaceutical industry.
“[The pharmaceutical industry] has unlimited money because they are shooting the moon with their prices of pharmaceuticals,” says South. “Over many years, they have extended their tentacles into many of these groups.”
The AIDS Healthcare Foundation used to receive money from the pharmaceutical industry but doesn’t anymore, he says, adding, “even if they were taking their money, so what? They’re out there fighting them tooth and nail.”