Gilles Mingasson/AP Images for AIDS Healthcare Fondation
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.
So it's no surprise that the most expensive ballot measure in California is about drug pricing, with drug companies pouring millions into lobbying efforts aimed at voting it down.
Proposition 61 would keep the prices of prescription drugs capped at the price the Department of Veterans Affairs (VA) pays for them. Unlike other government agencies, the VA can negotiate drug prices, and gets the lowest prices on prescription drugs of any government agency. The proposition would apply only to drugs that are paid for by California's state government.
Backers of Prop 61 say it would save the state millions, even billions, on prescription drug spending. Currently, the VA gets a discount of about 24% off traditional drug prices, and the agency can negotiate further discounts on top of that. And the state spends a lot on pharmaceuticals.
So far, more than $125 million has been raised for lobbying efforts for Prop 61, with the majority of that coming from drug companies that oppose it. The proposition has also attracted the attention of Senator Bernie Sanders, who has repeatedly said he believes drug prices are too high.
In an October op-ed for the Los Angeles Times, Sanders even went so far as to call the ballot measure "a chance to stand up to the pharmaceutical industry's greed and spark a national movement to end this price-gouging."
Who would benefit
Prop 61 is designed to set drug prices at the lowest possible price. One problem with it, however, is that the proposition doesn'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 get 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.
Who's on each side
Hundreds of groups have donated to either support or oppose the proposition, but here are some of the most prominent backers and opponents.
"Yes on Prop 61"
- The AIDS Healthcare Foundation - $14.7 million
- The California Nurses Association - $55,430
"No on Prop 61"
- Pharmaceutical companies have donated more than $109 million in total, with the top 10 donors having contributed about $69.8 million
- Merck & Co. - $9,420,395
- Pfizer - $9,420,395
- Johnson & Johnson - $9,301,646
Other groups have come out vocally either in support or opposition to the proposition. In an October editorial opposing the measure, the LA Times' editorial board argued that the proposition was short-sighted. Drugmakers that could be losing money on the bigger discounts it now has to give the state could turn around give everyone else fewer discounts. "The underlying problem of fast-rising drug prices needs to be addressed comprehensively and nationally, so that relief for some doesn't come at the expense of others," the editorial board wrote.
Heading into the week before the election, the race has gotten tighter, with support for the ballot measure waning and drug company opposition growing. As of a Tuesday poll, those voting "yes" on 61 made up 51% of the vote, while those opposing made up 24%. Another quarter of voters said they were still undecided. Another poll released Friday showed the race as neck and neck, with 47% voting yes, 47% voting no, and another 6% undecided or abstaining.
"We're fighting that tooth and nail," pharmaceutical company Eli Lilly CEO John Lechleiter said on a quarterly earnings call on October 25.