The pharmaceutical industry has contributed $109 million to defeat Proposition 61, the most money raised for or against any of the 17 statewide ballot initiatives this year.
The measure, which comes at a time of heightened public concern over drug pricing, would prohibit the state government from paying a higher price for a drug than the federal Department of Veterans Affairs, which gets big mandatory discounts and can negotiate with drug makers for even steeper ones.
If approved, Proposition 61 could mean savings for California’s public employees and retirees, its prison system and part of Medi-Cal, the state’s Medicaid program. But the size of savings is unclear, and could range from “relatively little” to “significant,” according to the nonpartisan state legislative analyst.
One reason for the uncertainty is whether state agencies will be able to determine what Veterans Affairs pays for certain drugs. Another reason is that pharmaceutical companies might try to offset Proposition 61 by charging higher prices to other customers, including the V.A. Advertisements opposing Proposition 61 that now saturate the airwaves often feature veterans saying the measure would raise prices for them and others.
Still, the drug manufacturers paying for these commercials are probably worried less about the mechanics of Proposition 61 than the precedent its approval would set for more government control of prices. Other states may try similar measures. And Medicaid programs in all states might have to be offered the lower prices paid by California agencies.
Supporters of the initiative say the threat of countervailing price increases is an empty one and that it is time to stand up to the pharmaceutical industry. Almost all of the more than $14.7 million contributed to support the measure comes from its sponsor, the AIDS Healthcare Foundation, which runs pharmacies and treatment centers for people with H.I.V.
Other supporters include the California Nurses Association and the state branch of AARP. Senator Bernie Sanders of Vermont has held rallies in California to campaign for the measure, which he said would be “a real blow against this greedy industry that will reverberate all over America.”
Despite the pharmaceutical industry war chest, the measure was comfortably ahead in some polls conducted in September. California newspapers generally oppose the measure because of its specifics, while acknowledging the temptation for a protest vote against high drug prices.