With California’s initiatives to be certified today, more than 100 groups oppose the misleading prescription drug contracting measure

Independent experts warn measure could increase prescription costs, reduce access to medicines and harm our nation’s veterans.

SACRAMENTO – With news expected later today from the Secretary of State certifying the final number of initiatives on the November ballot, the list of influential California organizations officially opposed to one measure sure to be included continues to grow.

More than one hundred groups now oppose the Misleading Drug Contracting Measure, including the California Medical Association; Veterans of Foreign Wars, Department of California; American Congress of Obstetricians and Gynecologists, District IX; California Taxpayers’ Association; California Association of Rural Health Clinics and dozens of other patient advocacy, health care, veterans, labor, business, civil rights, taxpayer and senior groups.

Experts warn the drug contracting measure will harm veterans and reduce patient access to needed medicines, while imposing new bureaucracy, red tape and lawsuits that will cost taxpayers.

The California Public Employee Retirement System (CalPERS), the nonpartisan Legislative Analyst’s Office (LAO), and HIV and hepatitis C advocacy groups, all of which are neutral on the measure, have raised significant concerns:

  • The Legislative Analyst Office’s report to the legislature says: “The measure could endanger the supplemental rebates that (the State Department of Health Care Services) DHCS collects from drug manufacturers… In such circumstances, the measure could raise DHCS spending on prescription drugs.”
  • A recent CalPERS staff analysis warns the measure “would drastically change the current drug purchasing landscape and could result in unintended consequences,” and could lead to “decreased access to certain drugs for CalPERS members.”
  • Project Inform, the San Francisco AIDS FoundationAIDS Project Los Angeles and the Los Angeles LGBT Center, groups serving people living with and affected by HIV and hepatitis C, are officially neutral on the ballot measure but have raised concerns about the initiative. In a policy paper analyzing the measure, they raise red flags:
    • “The initiative does not include any provisions that would lower the cost of prescription drugs for consumers.”
    • “It is unclear whether the initiative would result in cost savings to the state”
    • “This initiative could actually increase the price of drugs in a number of public programs, including (AIDS Drug Assistance Program) ADAP, Medi-Cal, the VA, and California’s prison system.”

Patient advocacy, veterans and health groups opposed to the measure also have identified problems:

  • The California Medical Association: “the measure would result in a new bureaucratic prior approval process that could interfere with patient access to the medicines they need.”
  • The California Association of Rural Health clinics: “the measure could actually increase prescription drug costs for the state’s Medi-Cal program, which serves low-income families who make up the majority of the patients we serve.”
  • Veterans of Foreign Wars, Department of California: “America’s uniformed service members lay their lives on the line to protect our country. In recognition of their service, they are afforded certain unique benefits. This measure ignores their sacrifice. It seeks to extend the special prescription medicine discounts given to veterans to some state purchasing programs. This could increase prescription drug costs for the U.S. Department of Veterans Affairs and ultimately for veterans, retirees and military families.”


The controversial promoter behind this measure runs an organization, the AIDS Healthcare Foundation (AHF), which brought in more than $1 billion in revenue last year through prescription drug sales and operating health insurance plans. AHF also operates a Medi-Cal managed care plan in California called PHC or Positive Healthcare California. Yet the proponent specifically exempted Medi-Cal managed care plans from the provisions of the California initiative.

And in five separate government audits, his organization was found to have overcharged Los Angeles County by more than $6 million. In addition, his organization is currently suing the state so it can charge more for prescription drugs.


The flawed ballot measure would prohibit the state from entering into contracts to purchase prescription drugs unless the prices are the same or lower than the special discounts provided to the US Department of Veterans Affairs (VA) and our nation’s veterans.

However, the measure 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, the state’s largest low-income health care program. The measure could also result in more physician paperwork and more bureaucratic hassle for patients, limiting or delaying access to prescription drugs.

The proposition only covers a handful of state government programs affecting barely 12% of Californians, including some state government workers and state prisoners. More than 88% of Californians are excluded. Patients served by Covered California, more than 10 million low-income people in the Medi-Cal program and 20 million Californians who have private health insurance all would be excluded.