Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.
A neck-and-neck proposition designed to cap the skyrocketing cost of drugs has been rejected
A neck-and-neck proposition designed to cap the skyrocketing cost of drugs has been rejected
Lydia RamseyNov 9, 2016, 19:38 IST
Supporters of Proposition 61, the California Drug Price Relief Act, gathered at La Placita Olvera, the heart of Los Angeles, to launch the "On the Road for Lower Drug Prices," YES ON 61 Tour across California, on Monday, Sept. 19, 2016. Coalition members, community leaders and supporters laid out how Proposition 61 will lower drug prices.Gilles Mingasson/AP Images for AIDS Healthcare Fondation
California voters on Tuesday rejected a measure that would have set California state prescription drug prices capped at the price the Department of Veterans Affairs (VA) pays for them.
Advertisement
With 93% of California voters reporting Tuesday morning, Prop 61 has been rejected. Roughly 46% of Californians voted in favor of the measure, while 54% voted against it.
Pharmaceutical stocks were up in pre-market trading Tuesday.
More than $125 million was raised for lobbying efforts for Prop 61, with the majority of that coming from drug companies that oppose it.
Going into the week before the election, the race had tightened, with support for the measure waning and opposition from drug companies growing. A poll released Friday showed the race as neck and neck, with 47% voting yes, 47% voting no, and another 6% undecided or abstaining.
Those in favor of the proposition pulled out all the stops leading up to Tuesday, with Vermont Senator Bernie Sanders - a frequent critic of the drug industry - speaking at rallies across the state Monday.
U.S, Sen. Bernie Sanders (I-Vt.) expresses his support for Proposition 61 downtown Los Angeles, Monday, Nov. 7, 2016. The ballot initiative drawing the most spending on the November ballot would not affect the average Californian, but drug companies have a major stake and are spending heavily to defeat it. Proposition 61 would prohibit state agencies from paying more for prescription drugs than the U.S. Dept. of Veterans Affairs does in an effort to curb rising costs for taxpayers.AP
Who would have benefitted
Prop 61 was designed to set drug prices at the lowest possible price. One problem with it, however, was that the proposition didn't lay down the concrete tools for how to make it happen.
Currently, about 26% of California's 38.8 million residents have their health insurance covered by state programs - and for some of them, Prop 61 would be great news. But others would have been left out.
Anyone on Medi-Cal's managed care plan (roughly 75% of the people on Medi-Cal), would see no direct benefit. That's because those plans go through commercial health insurers, which are in charge of negotiating their own drug discounts.
