FDAnews Drug Daily Bulletin

CALIFORNIA VOTERS REJECT RX DISCOUNT PROPOSALS

Nov. 18, 2005
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California voters have overwhelmingly rejected two proposals that would have reduced drug costs by either instituting a voluntary program or by forcing companies to lower prices by threatening to pull their products from the state's Medicaid program.

Proposition 78, a voluntary program, and Proposition 79, a more punitive approach, both failed by a sizeable margin. With 100 percent of precincts reporting, Prop. 78 lost 58 percent to 42 percent and Prop. 79 lost 61 to 39 percent.

Prop. 78 was based on an Ohio program that has achieved discounts of more than 30 percent, according to election documents with the California secretary of state. The California program would have provided discounts of at least 40 percent off regular retail prices, its proponents argued. Prop. 78 was strongly supported by the drug industry, which, according to press reports, funneled an estimated $80 million into the effort to pass the measure.

The competing Prop. 79 would have compelled drugmakers to cut prices by threatening to pull their products from the state's Medicaid program, known as Medi-Cal, if discounts weren't offered.