California Proposition 78 (2005)
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California Proposition 78 was on the November 8, 2005 special statewide ballot in California as an initiated state statute, where it was defeated in spite of the fact that over $118 million was spent encouraging voters to approve it.
Had Proposition 78 passed, California would have adopted a new state drug discount program to reduce the costs of prescription drugs for Californians at or below 300 percent of the federal poverty level.
Major contributors supporting Prop. 78 were Pharmaceutical Research and Manufacturers of America California Initiative Fund of Sacramento, Pfizer, Inc. of New York, Johnson & Johnson of New Brunswick, New Jersey, Merck & Co. of Whitehouse Station, New Jersey, and Glaxosmithkline of Philadelphia, Pennsylvania.
Proposition 78's ballot title was, "Should the state adopt a new state drug discount program to reduce the costs of prescription drugs for Californians at or below 300 percent of the federal poverty level?"
Proposition 78 was regarded as competing with California Proposition 79 (2005). Both propositions failed.
Election results
| Proposition 78 | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
 No
| 4,508,873 | 58.5% | ||
| Yes | 3,199,193 | 41.5% | ||
| Total votes | 7,708,066 | 100.00% | ||
| Voter turnout | NK% | |||
Official summary
The official summary provided to describe Proposition 78 said:
- Establishes discount prescription drug program, overseen by California Department of Health Services.
- Enables certain low- and moderate-income California residents to purchase prescription drugs at reduced prices.
- Authorizes Department: to contract with participating pharmacies to sell prescription drugs at agreed-upon discounts negotiated in advance; to negotiate rebate agreements with participating drug manufacturers.
- Imposes $15 annual application fee.
- Creates state fund for deposit of drug manufacturers’ rebate payments.
- Requires Department’s prompt determination of residents’ eligibility, based on listed qualifications.
- Permits outreach programs to increase public awareness.
- Allows program to be terminated under specified conditions.
Fiscal impact
The fiscal estimate provided by the California Legislative Analyst's Office said:
- One-time and ongoing state costs, potentially in the millions to low tens of millions of dollars annually, for administration and outreach activities for a new drug discount program. A significant share of these costs would probably be borne by the state General Fund.
- State costs, potentially in the low tens of millions of dollars, to cover the funding gap between when drug rebates are collected by the state and when the state pays funds to pharmacies for drug discounts provided to consumers. Any such costs not covered through advance rebate payments from drug makers would be borne by the state General Fund.
- Unknown potentially significant savings for state and county health programs due to the availability of drug discounts.
- Potential unknown effects on state revenues and expenditures from changes in prices and quantities of drugs sold in California.
Campaign spending
The campaigns for and against Proposition 78 were heavily related to the campaigns for and against Proposition 79. This chart displays spending on both campaigns; if a campaign committee registered itself as in favor of one proposition and opposed to the other, its spending is reflected in more than one column in the table.[1],[2]
| Committee name | Spent for 78 | Spent against 78 | Spent for 79 | Spent against 79 |
|---|---|---|---|---|
| Pharmaceutical Research & Manufacturers of America, Yes on 78 and No on 79 | $85,998,683 | $85,998,683 | ||
| Californians for Affordable Prescriptions, Yes on 78 | $32,767,788 | |||
| Yes on 79 and No on 78, a Coalition of Consumer Organizations for Affordable Prescription Drugs | $811,356 | $811,356 | ||
| Californians against Arnold's Special Interest Election, No on 73, 74, 75, 76, 77 and 78 and Yes on 79 & 80 | $47,960 | $47,960 | ||
| Alliance for a Better California, Yes on Proposition 79 and 80 | $38,754,725 | |||
| Californians Against the Wrong Prescription, No on 79 | $37,351,418 | |||
| Biotechnology Industry Organization Committee Against Proposition 79 | $922,583 |
See also
External links
- Official California Voter Guide to Proposition 78
- Smart Voter Guide
- California Voter Foundation Guide
- Official election results
- The 2005 special elections in California from the Institute of Governmental Studies
