California Proposition 61, Drug Price Standards (2016)

California Proposition 61
Election date November 8, 2016
Topic Healthcare
Status d Defeated
Type State statute	Origin Citizens

2016 measures
June 7
Proposition 50 a
November 8
Proposition 51 a
Proposition 52 a
Proposition 53 d
Proposition 54 a
Proposition 55 a
Proposition 56 a
Proposition 57 a
Proposition 58 a
Proposition 59 a
Proposition 60 d
Proposition 61 d
Proposition 62 d
Proposition 63 a
Proposition 64 a
Proposition 65 d
Proposition 66 a
Proposition 67 a
Polls
Voter guides
Campaign finance
Signature costs

California Proposition 61, the Drug Price Standards Initiative, was on the November 8, 2016, ballot in California as an initiated state statute. It was defeated.

A "yes" vote supported regulating drug prices by requiring state agencies to pay no more than the U.S. Department of Veterans Affairs (VA) pays for prescription drugs.

A "no" vote opposed this measure to require state agencies to pay no more than the VA pays for prescription drugs.

Proposition 61 was the most expensive ballot measure battle in 2016, with the combined amount of money raised by the support and opposition campaigns totaling over $128.28 million.

The AIDS Healthcare Foundation, a prominent backer of the campaign supporting Proposition 61, also backed Ohio Issue 2—a similar drug price standards initiative—that appeared on the November 2017 ballot in Ohio.

This election was one of Ballotpedia's top 10 state-level races in 2016. Click here to read the full list.

Election results

Proposition 61
Result		Votes	Percentage
d No		7,109,642	53.20%
Yes		6,254,342	46.80%

Election results from California Secretary of State

Overview

Drug price standards in California

California spent nearly $3.8 billion on prescription drugs in fiscal year 2014-2015. Almost 83 percent of the amount spent on drugs was for Medi-Cal and the Public Employees’ Retirement System (CalPERS). In California, state agencies negotiate drug prices with manufacturers in attempts to receive discounts and lower prices. In some situations, state agencies independently negotiate drug prices, leading to different agencies of the state paying different prices for the same drug. In other situations, state agencies jointly negotiate drug prices.

Initiative design

Proposition 61 was designed to restrict the amount that any state agency could pay for drugs, tying it to the price paid by the U.S. Department of Veterans Affairs—an organization that falls under certain state laws regarding drug price negotiations. Specifically, it would have prohibited state agencies to enter into any purchasing agreement with drug manufacturers unless the net cost of the drug was the same or less than that paid by the VA. The measure would have applied in any case in which the state ultimately provided funding for the purchase of drugs, even if the drugs were not purchased directly by a government agency. The measure would have only applied to the purchasing of drugs by state agencies and not to purchases made by individuals. Medicaid-managed care programs would have been exempt from drug price regulations required by Proposition 61.

Amber Didier, an analyst for the state's Legislative Analyst's Office, stated that it was not possible to give an accurate estimate of how this measure would impact state finances. Didier said, “There are potentially different ways that pharmaceutical companies could react to this that would then influence the fiscal impact.” Proponents pointed toward a 2005 Congressional Budget Office report that indicated that the VA paid about 42 percent of market prices and that those in the California Medicaid system pay about 51 percent. Mike Wofford, the chief of pharmacy policy for the state department that oversees Medi-Cal, said that, while he did not have access to information about the VA's drug prices, Medi-Cal had a history of success in its negotiations with drug companies. Wofford estimated that Medi-Cal paid about the same or even less than the VA.

State of the ballot measure campaigns

No on 61 outraised supporters six-to-one. Opponents raised $109.1 million, while Californians for Lower Drug Prices received $19.2 million. The top ten donors to No on 61 were all pharmaceutical companies or companies with interests in the pharmaceutical drug industry. About 98 percent of contributions to Californians for Lower Drug Prices came from the AIDS Healthcare Foundation. Polls indicated that support for Proposition 61 was around 57 percent.

Text of measure

Ballot title

The ballot title was as follows:

“

State Prescription Drug Purchases. Pricing Standards. Initiative Statute.

”

Ballot summary

The long-form ballot summary was as follows:

“

Prohibits state agencies from buying any prescription drug from a drug manufacturer at any price over the lowest price paid for the same drug by the United States Department of Veterans Affairs, except as may be required by federal law. Applies to any program where the state agency is the ultimate payer for a prescription drug, even if the state agency does not itself buy the drug. Exempts purchases of prescription drugs under managed care programs funded through Medi-Cal.

”

The shorter ballot label summary was as follows:

“

Prohibits state from buying any prescription drug from a drug manufacturer at price over lowest price paid for the drug by United States Department of Veterans Affairs. Exempts managed care programs funded through Medi-Cal. Fiscal Impact: Potential for state savings of an unknown amount depending on (1) how the measure’s implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.

”

The long-form, official ballot summary for Proposition 61 was identical to the initial summary provided to initiative proponents for the purpose of circulating the initiative for signature collection.

Fiscal impact statement

Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's legislative analyst and its director of finance. The fiscal impact statement was as follows:

“

Potential for state savings of an unknown amount depending on (1) how the measure’s implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.

”

In April 2015, the state's legislative analyst wrote:

“

A reasonable estimate of the net impact of this proposed initiative measure cannot be prepared within the 50-day period from the date this proposed initiative was received. [...] In the time provided, we were unable to obtain sufficient information on the lowest prices paid for prescribed drugs by USDVA to enable us to make a reasonable comparison between the prices paid by USDVA and the prices paid by the state. Lacking such price comparison information, we were unable to come up with a reasonable estimate of the measure’s potential fiscal impact on state costs for prescribed drugs.

”

On May 10, 2016, the legislative analyst indicated that the fiscal impact was still uncertain, listing three possible fiscal scenarios that could result from the measure:

“

Scenario #1: Drug Manufacturers Offer Lowest VA Prices to the State. If manufacturers choose to offer the lowest VA prescription drug prices to the state, this measure may achieve state savings to the extent that the lowest price paid by the VA is lower than that paid by state entities. However, these savings could be at least partially offset if manufacturers respond by raising the prices of other drugs paid for by the state but not purchased by the VA. Scenario #2: Drug Manufacturers Decline to Offer Lowest VA Prices to the State. The measure places no obligations on drug manufacturers to offer prescription drugs to the state at the lowest VA price. Therefore, drug manufacturers may decline to offer the state some or all of the drugs purchased by the VA at the lowest price paid by the VA. This manufacturer response could result in various state responses, each of which generates further uncertainty around the fiscal effects of the measure. These state responses could include: State Programs Could Modify Formularies. Most state departments and programs have discretion over which drugs they make available to their beneficiaries. Should manufacturers decline to extend VA pricing on some or all drugs to these state entities, the entities may change which drugs they make available, offering only (1) those drugs that the VA does not purchase and (2) drugs that manufacturers will offer at the lowest VA price. DHCS May Have to Disregard Measure’s Price Ceiling. DHCS, as administrator of California’s Medi-Cal program, is required by federal Medicaid law to offer most Food and Drug Administration (FDA)-approved prescription drugs to beneficiaries. Failing to offer an FDA-approved drug would likely result in the loss of federal financial participation in the pharmacy portion of the Medi-Cal program. Should manufacturers decline to extend VA pricing to Medi-Cal, DHCS may have to disregard the measure and pay higher prices than the measure allows in order to comply with federal Medicaid law. Furthermore, the measure could endanger the supplemental rebates that DHCS collects from drug manufacturers because these rebates derive from voluntary state agreements with manufacturers that, were the negotiated prices higher than the VA’s, could contravene the measure’s provisions about allowable agreements. In such circumstances, the measure could raise DHCS spending on prescription drugs. Scenario #3: Drug Manufacturers Raise VA Drug Prices Given Their New Pricing Benchmark Role. To continue to be able to offer prescription drugs to state entities and minimize reductions in their revenues, drug manufacturers may elect to raise VA drug prices. The fiscal effect of the measure would vary under this scenario depending on the extent to which manufacturers raise VA prices and tie state prices to the higher VA prices. When VA drug prices were previously extended to Medicaid nationally, drug manufacturers responded by raising VA drug prices before the U.S. Congress subsequently removed the linkage between VA and Medicaid pricing.

”

Full text

The full text of the measure was as follows:

Section 1. Title. This Act shall be known and may be cited as "The California Drug Price Relief Act" (the "Act"). Section 2. Findings and Declarations. The People of the State of California hereby find and declare all of the following: (a) Prescription drug costs have been, and continue to be, one of the greatest drivers of rising health care costs in California. (b) Nationally, prescription drug spending increased more than 800 percent between 1990 and 2013, making it one of the fastest growing segments of health care. (c) Spending on specialty medications, such as those used to treat HIV/AIDS, Hepatitis C, and cancers, are rising faster than other types of medications. In 2014 alone, total spending on specialty medications increased by more than 23 percent. (d) The pharmaceutical industry's practice of charging inflated drug prices has resulted in pharmaceutical company profits exceeding those of even the oil and investment banking industries. (e) Inflated drug pricing has led to drug companies lavishing excessive pay on their executives. (f) Excessively priced drugs continue to be an unnecessary burden on California taxpayers that ultimately results in cuts to health care services and providers for people in need. (g) Although California has engaged in efforts to reduce prescription drug costs through rebates, drug manufacturers are still able to charge the State more than other government payers for the same medications, resulting in a dramatic imbalance that must be rectified. (h) If California is able to pay the same prices for prescription drugs as the amounts paid by the United States Department of Veterans Affairs, it would result in significant savings to California and its taxpayers. This Act is necessary and appropriate to address these public concerns. Section 3. Purposes and Intent. The People of the State of California hereby declare the following purposes and intent in enacting this Act: (a) To enable the State of California to pay the same prices for prescription drugs as the prices paid by the United States Department of Veterans Affairs, thus rectifying the imbalance among government payers. (b) To enable significant cost savings to California and its taxpayers for prescription drugs, thus helping to stem the tide of rising health care costs in California. (c) To provide for the Act's proper legal defense should it be adopted and thereafter challenged in court. Section 4. The California Drug Price Relief Act shall be codified by adding the following Section to the California Welfare and Institutions Code: Section 14105.32. Drug Pricing (a) Notwithstanding any other provision of law and insofar as may be permissible under federal law, neither the State of California, nor any state administrative agency or other state entity, including, but not limited to, the California Department of Health Care Services, shall enter into any agreement with the manufacturer of any drug for the purchase of a prescribed drug unless the net cost of the drug, inclusive of cash discounts, free goods, volume discounts, rebates, or any other discounts or credits, as determined by the California Department of Health Care Services, is the same as or less than the lowest price paid for the same drug by the United States Department of Veterans Affairs. (b) The price ceiling described in subsection (a) above also shall apply to all programs where the State of California or any state administrative agency or other state entity is the ultimate payer for the drug, even if it did not purchase the drug directly. This includes, but is not limited to, California's Medi-Cal fee-for-service outpatient drug program, and California's AIDS Drug Assistance Program. In addition to agreements for any cash discounts, free goods, volume discounts, rebates, or any other discounts or credits already in place for these programs, the responsible state agency shall enter into additional agreements with drug manufacturers for further price reductions so that the net cost of the drug, as determined by the California Department of Health Care Services, is the same as or less than the lowest price paid for the same drug by the United States Department of Veterans Affairs. The requirements of this Section shall not be applicable to drugs purchased or procured, or rates developed, pursuant to or under any Medi-Cal managed care program. (c) It is the intent of the People of the State of California that the State of California, and all state agencies and other state entities that enter into one or more agreements with the manufacturer of any drug for the purchase of prescribed drugs, shall implement this section in a timely manner, and to that end the State of California and all such state agencies and other state entities are required to implement and comply with this law no later than July 1, 2017. (d) The State of California, and each and every state administrative agency or other state entity, may adopt rules and/or regulations to implement the provisions of this Section, and may seek any waivers of federal law, rule, and/or regulation necessary to implement the provisions of this Section. Section 5. Liberal Construction. This Act is an exercise of the public power of the People of the State of California for the protection of their health, safety, and welfare, and shall be liberally construed to effectuate its purposes. Section 6. Conflicting Measures. This Act is intended to be comprehensive. It is the intent of the People of the State of California that in the event this Act and one or more measures relating to the same subject shall appear on the same statewide ballot, the provisions of the other measure or measures shall be deemed to be in conflict with this Act. In the event that this Act receives a greater number of affirmative votes, the provisions of this Act shall prevail in their entirety, and all provisions of the other measure or measures shall be null and void. Section 7. Proponent Accountability. The People of the State of California hereby declare that the proponent of this Act should be held civilly liable in the event this Act is struck down, after passage, in whole or in part, by a court of law for being constitutionally or statutorily impermissible. Such a constitutionally or statutorily impermissible initiative is a misuse of taxpayer funds and electoral resources and the Act's proponent, as drafter of the Act, must be held accountable for such an occurrence. In the event this Act, after passage, is struck down in a court of law, in whole or in part, as unconstitutional or statutorily invalid, and all avenues for appeal have been exhausted, the proponent shall pay a civil penalty of $10,000 to the General Fund of the State of California for failure to draft and sponsor a wholly constitutionally or statutorily permissible initiative law but shall have no other liability to any person or entity with respect to, related to, or arising from the Act. No party or entity may waive this civil penalty. Section 8. Amendment and Repeal. This Act may be amended to further its purposes by statute passed by a two-thirds (2/3) vote of the Legislature and signed by the Governor. Section 9. Severability. If any provision of this Act, or part thereof, or the applicability of any provision or part to any person or circumstances, is for any reason held to be invalid or unconstitutional, the remaining provisions and parts shall not be affected, but shall remain in full force and effect, and to this end the provisions and parts of this Act are severable. The voters hereby declare that this Act, and each portion and part, would have been adopted irrespective of whether any one or more provisions or parts are found to be invalid or unconstitutional. Section 10. Legal Defense. The People of the State of California desire that the Act, if approved by the voters, and thereafter challenged in court, be defended by the State of California. The People of the State of California, by enacting this Act, hereby declare that the proponent of this Act have a direct and personal stake in defending this Act from constitutional or statutory challenges to the Act's validity. In the event the Attorney General fails to defend this Act, or the Attorney General fails to appeal an adverse judgment against the constitutionality or statutory permissibly of this Act, in whole or in part, in any court of law, the Act's proponent shall be entitled to assert its direct and personal stake by defending the Act's validity in any court of law and shall be empowered by the citizens through this Act to act as agents of the citizens of the State of California subject to the following conditions: (1) The proponent shall not be considered an "at-will" employee of the State of California, but the Legislature shall have the authority to remove the proponent from their agency role by a majority vote of each house of the Legislature when "good cause" exists to do so, as that term is defined by California case law; (2) The proponent shall take the Oath of Office under California Constitution, Article XX, §3 as an employee of the State of California; (3) The proponent shall be subject to all fiduciary, ethical, and legal duties prescribed by law; and (4) The proponent shall be indemnified by the State of California for only reasonable expenses and other losses incurred by the proponent, as agent, in defending the validity of the challenged Act. The rate of indemnification shall be no more than the amount it would cost the State to perform the defense itself. Section 11. Effective Date. Except as otherwise provided herein, this Act shall become effective the day after its approval by the voters.

Support

Californians for Lower Drug Prices, also known as Yes on 61, led the campaign in support of Proposition 61. The campaign was supported by the AIDS Healthcare Foundation.

Supporters

Officials

• Sen. Bernie Sanders (I) of Vermont, 2016 presidential candidate
• U.S. Rep. Mike Honda (D-17)
• Asm. David Chiu (D-17)
• Asm. Kansen Chu (D-25)

Former officials

• Robert Reich, former U.S. Secretary of Labor
• Rohit Khannah, former Assistant Deputy U.S. Secretary of Commerce
• Former Sen. Art Torres (D-24)
• Former Asm. Mariko Yamada (D-AD 4)
• Former Asm. Steve Fox (D-AD 36)

Parties

• Green Party of California
• California Peace and Freedom Party
• Progressive Democrats of America
• Alameda County Democratic Party
• Madera County Democratic Party
• Contra Costa County Democratic Party
• Sacramento County Democratic Party
• Santa Barbara County Democratic Party
• Santa Clara County Democratic Party
• Santa Monica Democratic Club
• Solano County Democratic Party
• Ventura County Democratic Party
• Yolo County Democratic Party

Organizations

• AIDS Healthcare Foundation
• American Association of Retired Persons, California
• Association of Asian Pacific Community Health Organizations (AAPCHO)
• Asian Pacific Policy and Planning Council (A3PCON)
• AsianWeek Foundation
• California Environmental Justice Alliance Action
• California Friends of the African American Publication
• California Nurses Association
• California Association of Retired Americans
• Los Angeles Urban League
• National Asian Pacific American Families Against Substance Abuse
• Our Revolution
• Social Security Works
• Therapeutic Residential Care Services
• VoteVets

Individuals

Yes on 61's short film Your Money or Your Life

• Michael Weinstein, President of the AIDS Healthcare Foundation
• Rev. Al Sharpton, civil rights activist
• Dolores Huerta, civil rights and labor activist
• Basim Elkarra, Executive Director of the Center for American Islamic Relations
• Jeevan Zutshi, Founder of the Indo-American Community Federation

Arguments

Supporters made the following arguments in support of Proposition 61:

• The proposition would fight price-gouging from drug companies.
• The proposition would provide better access to life-saving drugs.
• The proposition would save taxpayers billions of dollars in healthcare costs.

U.S. Sen. Bernie Sanders (I) of Vermont wrote an opinion article in the Los Angeles Times praising Proposition 61 and responding to opponents' arguments. The following is an excerpt from his article:

“

Now, drugmakers are using their cash and clout to try to defeat Proposition 61. Incredibly, the measure’s opponents are prepared to spend up to $100 million in California to make sure that Americans continue paying the highest drug prices in the world. Why? A major pharmaceutical industry publication has called Proposition 61 'ground zero' in the fight against high drug prices, and warned drug company executives that 'adoption of VA pricing by the state of California would be a ‘pricing disaster’ for the entire U.S. drug industry.' ... As the former chairman of the Senate Veterans' Affairs Committee, I would never support a measure that harms our veterans. Pharmaceutical companies cannot unilaterally raise the prices of drugs it sells to the VA... The drug industry also argues that less than 20% of Californians will benefit from Proposition 61. In fact, the measure will provide relief to all Californians whose tax dollars pay for the drugs used to treat many Medi-Cal recipients and state employees. Taxpayers would save an estimated $1 billion a year. It’s unacceptable that the exact drugs that we buy in our country are sold in Canada, Britain and other countries for a fraction of the price. My urgent message is to vote yes on Proposition 61 to make medicine more affordable in California and send a signal to Washington that the whole nation’s prescription drug policies need an overhaul.

”

Official arguments

Zenei Cortez, co-president of the California Nurses Association, Nancy McPherson, state director of AARP California, and Art Torres, former chair of the California Democratic Party, wrote the official argument in support of Proposition 61 found in the state's voter guide. Their argument was as follows:

Drug companies making enormous profits from people's illnesses and misery isn't Just a moral issue. Skyrocketing prescription drug prices are a matter of life and death. More Americans die of hepatitis C than from all other infectious diseases — EVEN THOUGH THERE'S A CURE, One reason? The drug company that controls it charges more than $1,000 per pill, out of most patients' reach. That's not the only outrageous example of drug-company price-gouging: The price of a common infection-fighting pill was raised overnight from $13.50 to $750 — nearly a 5000% increase, The average annual cost of widely-used specialty drugs is estimated at $53,000 — greater than the nation's median household income ($52,000) and almost 3 1/2 times larger than average annual Social Security benefits of $15,000. One cancer drug costs $300,000 a year. The drug companies put profits over people, returns for stockholders over cures for patients. What good are miraculous, life-saving medications, if they're priced so high patients can't afford them — and thousands are dying as a result? Proposition 61, The California Drug Price Relief Act, fights back against the drug companies' price-gouging. And it is expected to save lives. Here's how it would work: The Act would require the State of California to negotiate with drug companies for prices that are no more than the amounts paid for the same drugs by the U.S. Dept. of Veterans Affairs (DVA). Why the Dept. of Veterans Affairs? Because unlike Medicare, the DVA negotiates for drug prices, and pays on average 20-24% less for medications than other government agencies, up to 40% less than Medicare Part D. The Drug Price Relief Act empowers the State of California, as the healthcare buyer for millions of Californians, to negotiate the same or even better deals for taxpayers, which could save billions in healthcare costs. Drug companies are planning to spend $100 million to fight this measure because they know It would cause downward pressure on ALL drug prices — and cut into their excessive profits. Don't just take our word for it, a publication for drug executives called Prop. 61 "GROUND ZERO" in the national fight for lower drug prices, warning: "If the voters of California approve this proposition ... [it] would no doubt cause an immediate demand for the same VA discount rate to be made available to other states, the federal government, and likely private [health plan] entities, as well. IN SHORT [IT] WOULD BE A PRICING DISASTER FOR THE ENTIRE U.S. DRUG INDUSTRY." But a "pricing disaster" for drug companies would equal price relief for hard-pressed consumers. Prop. 61 is strongly supported by the 86,000-member California Nurses Association the largest healthcare-provider organization in the state; AARP, the largest retirees' group in California, with 33 million members; the Urban League; the Campaign for a Healthy California, including many labor unions; Progressive Democrats of America; Sen. Bernie Sanders; former U.S. Labor Secretary Robert Reich; and many others. JOIN US IN FIGHTING AGAINST HIGH DRUG PRICES AND DRUG COMPANY GREED. VOTE YES ON PROPOSITION 61. For more information, go to www.StopPharmaGreed.com.

Campaign advertisements

The following video advertisements were produced by Yes on 61 or Consumer Watchdog:

A Yes on 61 ad titled "Vote for a Fair Deal For Prescription Drugs"

A Californians for Lower Drug Prices ad featuring Jeannine English of the AARP

A Californians for Lower Drug Prices ad featuring Steve Dunwoody

More videos can be revealed below:
A Californians for Lower Drug Prices' "Naked Truth About The Price of Prescription Drugs"	A Californians for Lower Drug Prices featuring Rev. Al Sharpton	A Californians for Lower Drug Prices ad titled "Vets for Prop 61"
A Californians for Lower Drug Prices ad titled "Take NoAxion"	A Californians for Lower Drug Prices ad titled "Greed Is Not Good"	A Consumer Watchdog advertisement titled "The Road to Lower Priced Rx"
A Californians for Lower Drug Prices advertisement featuring Dr. Otto Yang	A Californians for Lower Drug Prices ad titled "Sick of Being Bombarded by Drug Company Ads That Lie To You?"	A Yes on 61 ad featuring U.S. Sen. Bernie Sanders
A Californians for Lower Drug Prices advertisement featuring Rebekka Armstrong	A Californians for Lower Drug Prices ad titled "This Guy?"	A Yes on 61 ad featuring Zenei Cortez of the CA Nurses Association

Opposition

Californians Against the Deceptive Rx Proposition, also known as No on 61, led the campaign in opposition to Proposition 61.

Opponents

Officials

• U.S. Rep. Tom McClintock (R-4)

Parties

• California Republican Party
• Libertarian Party of California
• San Francisco Democratic Party
• Harvey Milk LGBT Democratic Club
• Alice B. Toklas LGBT Democratic Club
• Fresno Stonewall Democrats
• Los Angeles County Young Democrats

Businesses

• Johnson & Johnson
• Bristol-Myers Squibb Company
• Purdue Pharma, L.P.
• Amgen
• AstraZeneca Pharmaceuticals L.P.
• AbbVie Inc.
• Novartis
• Eli Lily
• Otsuka America, Inc.

Organizations

Civic organizations California NAACP California League of United Latin American Citizens Black American Political Association of California Embracing Latina Leadership Alliances Council of Mexican Federations in North America Black Women Organized for Political Action Vamos Unidos The Latino Coalition Hispanic 100 California Senior Advocates League ONEgeneration Health organizations California Medical Association American Congress of Obstetricians and Gynecologists, California Mental Health America of California Bonnie J. Addario Lung Cancer Foundation California Chronic Care Coalition California Hepatitis C Task Force California Psychiatric Association California Association of Neurological Surgeons California Association of Rural Health Clinics Asian Pacific AIDS Intervention Team Latino Diabetes Association Ovarian Cancer Coalition of Greater California California Academy of Eye Physicians and Surgeons California Urological Association, Inc. Medical Oncology Association of Southern California Los Angeles County Medical Association San Diego County Medical Society American Liver Foundation – Pacific Coast Division American Liver Foundation – Greater Los Angeles Division Lupus Foundation of Southern California International Foundation for Autoimmune Arthritis Santa Clara County Medical Association Ventura County Medical Association Monterey County Medical Society Sierra Sacramento Valley Medical Society Community Health Action Network The G.R.E.E.N. Foundation Minority Health Institute Los Angeles Wellness Station Mental Health Systems Plaza Community Services Veterans organizations Veterans of Foreign Wars, Department of California Vietnam Veterans of America, California State Council American Legion, Department of California AMVETS, Department of California Military Officers Association of America, California Council of Chapters American GI Forum of California Marine Corps League, Department of California Military Order of the Purple Heart, Department of California California Association of County Veterans Service Officers (CACVSO) California State Commanders Veterans Council Disabled Veterans Business Alliance Women Veterans Alliance Paralyzed Veterans of America, Bay Area & Western Chapter Association of the United States Army, Northern California, Sixth Region Association of the United States Army, Southern California, Seventh Region Reserve Officers Association, Department of the Golden West Fleet Reserve Association, West Coast Region Minority Veterans Coalition of California Jewish War Veterans of America, Department of California Scottish American Military Society California Veterans Benefit Fund (CAVBF) Sons of the American Legion, Detachment of California AMVETS Ladies Auxiliary, State of California Rear Area Support Foundation Veterans Affiliated Council of Sacramento County San Diego Military Advisory Council Yuba-Sutter United Veterans Council Kings County Military and Veterans Coalition Taxpayer associations California Taxpayers Association California Taxpayer Protection Committee San Diego County Taxpayers Association Placer County Taxpayers Association SoCal Tax Revolt Coalition, Inc. Business associations California Chamber of Commerce California Business Roundtable California Manufacturers & Technology Association Valley Industry & Commerce Association Orange County Business Council Silicon Valley Leadership Group Los Angeles County Business Federation San Francisco Chamber of Commerce Los Angeles Area Chamber of Commerce Fresno Chamber of Commerce South Bay Association of Chambers of Commerce Chamber of Commerce Alliance of Ventura and Santa Barbara Counties Southwest California Legislative Council Regional Chamber Alliance Sacramento Metro Chamber of Commerce Greater Riverside Chambers of Commerce Irvine Chamber of Commerce San Gabriel Valley Economic Partnership Hollywood Chamber of Commerce Anaheim Chamber of Commerce San Diego East County Chamber of Commerce Moreno Valley Chamber of Commerce Tulare Chamber of Commerce San Mateo Chamber of Commerce North Orange County Chamber of Commerce Santa Clara Chamber of Commerce Oxnard Chamber of Commerce Santa Clarita Valley Chamber of Commerce Port Hueneme Chamber of Commerce United Chambers of Commerce San Fernando Valley & Region Latin Business Association California Black Chamber of Commerce Hispanic Chamber of Commerce of San Francisco Sacramento Black Chamber of Commerce Chinese American Council of Sacramento Orange County Hispanic Chamber of Commerce Kern County Hispanic Chamber of Commerce Nicaraguan American Chamber of Commerce of Northern California Latin American & Caribbean Business Chamber of Commerce Guatemalan American Chamber of Commerce Bay Area Central American Chamber of Commerce Unions State Building & Construction Trades Council of California California State Association of Electrical Workers California State Council of Laborers California Nevada Conference of Operating Engineers LA/OC Building & Construction Trades Council San Diego Building Trades Council International Brotherhood of Boilermakers Southern California Pipe Trades District Council 16 International Brotherhood of Electrical Workers (IBEW) Local 6, Local 11, Local 40, Local 45, Local 47, Local 100, Local 234, Local 302, Local 332, Local 340, Local 428, Local 440, Local 441, Local 477, Local 551, Local 595, Local 617, Local 639, Local 684, Local 952, Local 1245 United Union of Roofers, Waterproofers & Allied Workers Local 45 United Union of Plumbers & Pipe Fitters Local 78 United Union of Plumbers & Pipe Fitters Local 114 Sheet Metal Workers Local Union 104 Plasterers Union Local 200 United Association Plumbers, Steamfitters, Refrigeration & HVAC Service Technicians Local 230 United Association of Steam, Refrigeration, Air Conditioning, Pipefitters & Apprentices Local 250 United Association of Landscape & Irrigation, Sewer & Storm, Underground Industrial Piping Industry Local 345 United Association of Plumbers, Pipefitters, Refrigeration Local 364 United Association of Plumbers & Steam Fitters Local 398 United Association of Plumbers & Steam Fitters Local 403 United Association of Plumbers & Steam Fitters Local 460 United Association of Plumbers & Steam Fitters Local 484 United Association of Plumbers & Pipe Fitters Local 582 United Association of Sprinkler Fitters Local 709 United Association of Plumbers & Fitters Local 761

Individuals

• Kevin Drum, political blogger for Mother Jones

A No on 61 ad titled "Misleading Rx Measure Facts"

Arguments

Opponents made the following arguments in opposition to Proposition 61:

• The proposition would hurt veterans by causing prices to increase.
• The proposition would reduce patient access to medicines.
• The proposition would increase bureaucracy, red tape, lawsuits, and taxpayer costs.
• The proposition would increase state prescription drug costs.
• The proponent wrote special provisions for his own organization regarding the proposition.

U.S. Rep. Tom McClintock (R-4) endorsed a "No" vote on Proposition 61. He argued:

“

Sounds good on the surface: the state should pay no more for drugs than the Veterans’ Administration does. Why would taxpayer and veterans groups oppose it? Because it will likely increase overall drug costs as the market adapts and create drug shortages along the way. Price controls always sound good in theory – but in practice they always create shortages of whatever commodity is being controlled.

”

Official arguments

Dale Smith, commander of California's Veterans of Foreign Wars, Randy Munoz, vice chair of Latino Diabetes Association, and Gail Nickerson, president of California Association of Rural Health Clinics, wrote the official argument against Proposition 61 found in the state's voter guide. Their argument was as follows:

Proposition 61 is a deeply flawed and costly scheme that is not what it seems. Prop 61 was written and is being promoted by Michael Weinstein, the controVersial president of an organization that brought in more than $1 billion selling prescription drugs and HMO policies, Suspiciously, he exempted his own HMO from having to comply with the measure he wrote and is promoting. The Veterans of Foreign Wars, Department of California warns Prop 61 would harm veterans. The California Medical Association, representing 41,000 doctors, warns Prop 61 would reduce patient access to medicines, The California Taxpayers Association warns Prop 61 would impose new bureaucracy, red tape and lawsuits - costing taxpayers millions. PROP 61 DOES NOT APPLY TO 88% OF CALIFORNIANS. BUT IT NEGATIVELY IMPACTS ALL CALIFORNIANS The proposition only covers an arbitrary group of patients in certain state government programs, including some government employees and state prisoners. More than 88% of Californians are excluded. More than 10 million Medi-Cal low-income patients, 20 million Californians with private health insurance and Medicare, and millions of others —ALL EXCLUDED. PROP 61 COULD INCREASE PRESCRIPTION DRUG COSTS FOR VETERANS The US Department of Veterans Affairs receives special discounts on prescription drugs for veterans, This measure could result in eliminating these discounts and increasing prescription drug prices for veterans. That's why the measure is opposed by more than a dozen veteran groups, including: Veterans of Foreign Wars, Department of California Vietnam Veterans ofAmerica, California State Council American Legion, Department of California AMVETS, Department of California DOCTORS AND PATIENT ADVOCATES SAY PROP 61 WOULD DISRUPT ACCESS TO NEEDED MEDICINES Prop 61 would result in a new bureaucratic prior approval process that would interfere with patient access to needed medicines. Leading health groups oppose Prop 61, including: California Medical Association American Congress of Obstetricians and Gynecologists (AGOG) - District IX/CA Ovarian Cancer Coalition of Greater California PROP 61 WOULD LIKELY INCREASE STATE PRESCRIPTION DRUG COSTS Prop 61 would result in the elimination of drug discounts the state currently receives increasing state prescription costs by tens of millions annually. The state's nonpartisan Legislative Analyst says the measure could raise state spending on many prescription drugs. INCREASED BUREACRACY, RED TAPE AND HIGHER TAXPAYER COSTS The California Taxpayers Association opposes Prop 61. The measure is completely vague on how it would be implemented. Passage of this measure would result in more government bureaucracy, red tape and lawsuits as state agencies struggle to implement it - costing taxpayers millions. PROMOTER WROTE IN SPECIAL PROVISIONS FOR HIS OWN ORGANIZATION The proponent exempted his billion dollar operation and wrote in provisions giving him a special right to engage in lawsuits regarding this measure. This provision requires California taxpayers to pay his lawyers - a virtual blank check. Proposition 61 is yet another example of a misleading and costly ballot measure. It would hurt veterans; jeopardize patient access to needed medicines; increase state prescription costs; and add more bureaucracy, red tape and lawsuits - costing taxpayers millions. JOIN VETERANS, DOCTORS, PATIENT ADVOCATES, TAXPAYER GROUPS: NO on 61. www.NoProp61.com

Campaign advertisements

The following video advertisements were produced by No on 61:

No on Prop 61's "Who's In Who's Out"

No on Prop 61's "Lamont"

No on Prop 61's "Mike"

More videos can be revealed below:
No on Prop 61's "Facts"	No on Prop 61's "Marty and Dr. Thymes"	No on Prop. 61's "Who's Behind Prop 61?"
No on Prop 61's "Promesas (Spanish)"	No on Prop 61's "Big Promises"	No on Prop. 61's "Endorsement"

Campaign finance

The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed, which covered through December 31, 2016.

See also: Campaign finance requirements for California ballot measures

Two committees registered in support of the measure. Together they reported $19.3 million in contributions. The single opposition campaign reported over $109.1 million in contributions.

	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Support	$18,977,432.04	$324,764.51	$19,302,196.55	$18,790,624.69	$19,115,389.20
Oppose	$108,417,232.00	$688,928.61	$109,106,160.61	$110,267,828.02	$110,956,756.63
Total	$127,394,664.04	$1,013,693.12	$128,408,357.16	$129,058,452.71	$130,072,145.83

Support

The following table includes contribution and expenditure totals for the committees in support of the ballot measure.

Committees in support of Proposition 61
Committee	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Yes on Prop 61, Californians for Lower Drug Prices	$18,827,266.04	$324,618.51	$19,151,884.55	$18,626,433.19	$18,951,051.70
Consumer Watchdog Campaign - Yes on 61	$150,166.00	$146.00	$150,312.00	$164,191.50	$164,337.50
Total	$18,977,432.04	$324,764.51	$19,302,196.55	$18,790,624.69	$19,115,389.20

Donors

The following table shows the top donors to the committees registered in support of the ballot measure.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
AIDS Healthcare Foundation	$18,675,000.00	$105,562.13	$18,780,562.13
California Nurses Association PAC (CNA-PAC	$50,000.00	$219,056.38	$269,056.38
Californians for Lower Drug Prices	$150,000.00	$0.00	$150,000.00
Consumer Watchdog Campaign	$0.00	$146.00	$146.00

Opposition

The following table includes contribution and expenditure totals for the committee in opposition to the ballot measure.

Committees in opposition to Proposition 61
Committee	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
No on Prop 61 - Californians Against the Deceptive Rx Proposition	$108,417,232.00	$688,928.61	$109,106,160.61	$110,267,828.02	$110,956,756.63
Total	$108,417,232.00	$688,928.61	$109,106,160.61	$110,267,828.02	$110,956,756.63

Donors

The following table shows the top donors to the committee registered in opposition to the ballot measure.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
Merck & Co., Inc.	$9,420,395.00	$0.00	$9,420,395.00
Pfizer, Inc.	$9,420,395.00	$0.00	$9,420,395.00
Johnson & Johnson	$9,301,646.00	$0.00	$9,301,646.00
Amgen Inc.	$7,633,314.18	$37,453.82	$7,670,768.00
AbbVie Inc.	$6,859,873.00	$0.00	$6,859,873.00

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Media editorials

Support

• East Bay Express: "But major pharmaceutical companies are throwing huge cash to defeat 61, and many editorial boards are surprisingly on their side, arguing that the proposition is riddled with unknowns. But that’s not reason enough to vote against it. Time to send a message and kick-start drug-price reform. Vote yes."

• San Diego Free Press and OB Rag endorsed Proposition 61 and cited Doug Porter, who said, "I think I’m gonna send a message to Big Pharma and go with the protest vote. The chances of the legislature or congress doing anything that would offend their financial overlords are slim and none. Still, I doubt Proposition 61 will have the effect it promises."

• San Francisco Examiner: "This measure would fight price gouging by big drug companies and expand access to life-saving medicine. The opposition has heavily outspent the proponents of this measure, and nearly every major newspaper in the state has backed Big Pharma on this issue. We do not follow them."

Opposition

• The Bakersfield Californian: "Proposition 61 on the November ballot proposes to control Big Pharma’s ham-fisted grip on our wallets. But, regrettably, the measure falls short and should be defeated."
• Los Angeles Times: "The biggest unknown, though, is what drug makers would do if the measure put a dent in their revenues. If pharmaceutical companies are as profit-hungry as the supporters of Proposition 61 contend — and you’ll hear no argument to the contrary from us — they will seek to recover those lost profits by taking more out of someone else’s hide. After all, that’s what happened after Congress ordered drugmakers in 1990 to extend discounts to Medicaid; according to the General Accounting Office, many pharmaceutical companies responded by raising prices for buyers in the private sector."
• The Mercury News: "There are good reasons to be outraged at drug pricing by Big Pharma, which sets prices partly from a need to recover research costs but sometimes out of just plain greed. ... Prop 61 is loaded with unknowns, but here’s one sure thing: If it passes, Big Pharma will do everything it can to keep it from working as promised. Otherwise, every state will adopt a similar law."
• Monterey County Herald: "Like too many state measures, Proposition 61 is more of a protest than a cure — and likely would be tied up in court for years. Real changes with drug pricing and profiteering will have to be fought out in Congress and the Legislature. This measure has far too many unknowns. Vote no on Proposition 61."
• Orange County Register: "Everyone likes the sound of cheaper drug prices, and many would not shed a tear for cutting the profits of the 'big, bad' pharmaceutical companies, but setting below-market-rate prices for drugs would work out no better than rent control has in making housing affordable to the masses in San Francisco, creating similar shortages and other unintended consequences. It will only lead to less innovation and a diminished supply of drugs."
• The Record: “Vote no. This could make medications more expensive for people in governmental health plans. Think veterans, for instance.”
• The Sacramento Bee: "It would serve Big Pharma right if Californians passed Proposition 61... The industry certainly has given voters every reason to do it – from jacking up the cost for lifesaving EpiPens by a whopping 500 percent to making the most effective treatments for hepatitis C so expensive that they’re out reach for millions of Americans. ... But Proposition 61 is not the way to do that. The initiative comes with too many uncertainties and not enough guarantees that things won’t get worse. We’re loath to admit the industry is right when it says this is an all-too-simplistic solution to a complicated issue. ... In short, a vote for this initiative is a protest vote. Real change, as Brown noted, can unfortunately come primarily from Congress and, in lesser ways, from the Legislature. It’s the only cure to this racket."
• San Diego City Beat: “The measure doesn’t require drug manufacturers to comply either, enabling them to refuse to sell certain drugs to the state. And to salvage profits, they could increase VA prescription prices, anyway. Plus, these price cuts only apply to 25 percent of Medi-Cal patients.”
• The San Diego Union-Tribune: "The pharmaceutical industry’s lack of transparency and occasional machinations may deserve a public backlash, but it should be a smart backlash, not a hash sure to have unintended consequences. This board says no on Proposition 61."
• San Francisco Chronicle: "However, we must oppose Prop. 61, despite our disgust with the industry-bankrolled disingenuous advertising blitz. … A link between Medi-Cal and the VA is not necessarily a good corollary; their respective patient bases have different demographics and medical needs. Also, the fear of reduced access to certain drugs is legitimate: It would rely to some extent on the good faith of an industry whose greedy practices were the inspiration for this initiative. … Perhaps the ideal outcome for Prop. 61 would be a one-vote loss, which would send a message to the industry and the politicians who cater to it that the status quo is not acceptable. This measure contains too much risk, with too many lives dependent on access to life-sustaining drugs."
• San Mateo Daily Journal recommended a "No" vote on Proposition 61.
• Santa Rosa Press Democrat: "So it’s easy to understand why voters might be tempted to punish drug companies. ... Unfortunately, it might backfire. ... The rising cost of prescription medicine is a drain on public agencies, private employers and millions of families. Pharmaceutical companies seemingly raise prices at will, and they gain leverage through confidentiality agreements with bulk buyers as well as a consumer-unfriendly federal law that prohibits Medicare from negotiating bulk discounts of the sort enjoyed by the Department of Veterans Affairs. These issues need to be addressed, but that will take more than one initiative in one state."

Polls

See also: Polls, 2016 ballot measures

• In July 2016, Tulchin Research surveyed Californians on Proposition 61. Tulchin Research found 73 percent of respondents in support and 13 percent in opposition. There was not a major difference between Republicans and Democrats in the poll. About 77 percent of Democrats and 70 percent of Republicans supported the measure.
• In early September 2016, the USC Dornsife and Los Angeles Times joint poll found 66 percent of respondents in support of and 23 percent in opposition to Proposition 61.
• A Field Poll/IGS Poll surveyed 943 registered voters in September 2016 and found support for Proposition 61 to be 50 percent. The largest demographic gap was between age cohorts, with 64 percent of people 18-29 and 47 percent of people 65 and over supporting the measure.
• The Hoover Institution and YouGov surveyed 1,250 likely voters between October 4 and October 14, 2016. Support for the measure was 51 percent. The poll disaggregated respondents into four racial/ethnic groups. Blacks had the strongest support for the initiative at 76 percent. Asians supported it at a rate of 53 percent. Whites and Hispanics supported Proposition 61 at rates of 50 percent.
• The Field Poll/IGS Poll surveyed 1,498 likely voters between October 25 and October 31, 2016, and found support for the measure at 47 percent.

Polls with margins of error

California Proposition 61 (2016)
Poll	Support	Oppose	Undecided	Margin of error	Sample size
Hoover Institution/YouGov 10/4/2016 - 10/14/2016	51.0%	24.0%	25.0%	+/-3.28	1,250
USC Dornsife/Los Angeles Times 9/1/2016 - 9/8/2016	66.0%	23.0%	12.0%	+/-3.0	1,912
Tulchin Research 7/21/2016 - 7/24/2016	73.0%	13.0%	14.0%	+/-3.46	800
AVERAGES	63.33%	20%	17%	+/-3.25	1,320.67
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Polls without margins of error

Note: The Field Poll/IGS Poll does not report a margin of error because "[polls] conducted online using an opt-in panel do not easily lend themselves to the calculation of sampling error estimates as are traditionally reported for random sample telephone surveys."

California Proposition 61 (2016)
Poll	Support	Oppose	Undecided	Sample size
The Field Poll/IGS Poll 10/25/2016 - 10/31/2016	47.0%	47.0%	6.0%	1,498
The Field Poll/IGS Poll 9/7/2016 - 9/13/2016	50.0%	16.0%	34.0%	943
AVERAGES	48.5%	31.5%	20%	1,220.5
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Lawsuit

  

Lawsuit overview
Issue: Plaintiff alleges that legislative analyst's statement on VA drug prices was misleading
Court: Sacramento Superior Court
Ruling: The judge ruled in favor of the defendant. The plaintiff's issue was not concerning because elsewhere the legislative analyst states that "[t]he federal government has established discount programs that place upper limits on the prices paid for prescription drugs by selected federal payers, including the VA."
Plaintiff(s): Aref Aziz	Defendant(s): Secretary of State Alex Padilla
Plaintiff argument: The statement "drug manufacturers might choose to raise VA drug prices" is misleading; federal law limits drug companies from raising VA drug prices above 76 percent of average manufacture price. The statement should read "drug manufacturers might choose to raise VA drug prices, subject to federal price caps on brand-name drugs."	Defendant argument: The legislative analyst's statement is not misleading.

  Source: Sacramento Superior Court

On August 8, 2016, petitioner Aref Aziz, a consumer activist, filed for a writ of mandate asking that the state's legislative analyst add the caveat "subject to federal price caps on brand-name drugs" to the phrase "drug manufacturers might choose to raise VA drug prices," so that the full phrase would read, "[D]rug manufacturers might choose to raise VA drug prices, subject to federal price caps on brand-name drugs." Aziz claimed the "average voter," upon reading the statement, "will assume that drug manufacturers are free to raise drug prices on veterans as much as they want, in order to maximize their profits." However, federal law limits drug companies from raising VA drug prices above 76 percent of average manufacture price.

Judge Christopher Krueger of the Sacramento Superior Court denied Aziz's petition on August 15, 2016. Judge Krueger argued that the legislative analyst's statement was not misleading because elsewhere the analyst states that "[t]he federal government has established discount programs that place upper limits on the prices paid for prescription drugs by selected federal payers, including the VA." The legislative analyst provided sufficient information, according to the judge.

Background

Drug price increases

See also: Prescription drug prices

Daraprim and Turing Pharmaceuticals

The issue of drug prices was highlighted across the nation in September 2015 when Turing Pharmaceuticals increased the price of a drug called Daraprim—which is used to treat a parasitic infection especially dangerous to patients suffering from AIDS or cancer—from $18 to $750 per tablet. Both Hillary Clinton (D) and Bernie Sanders (I) openly criticized the price increase. Marco Rubio (R) also expressed disapproval of what he called "pure profiteering" by drug companies.

Former Turning Pharmaceuticals CEO Martin Shkreli testifying before the House Committee on Oversight and Government Reform on drug prices.

Martin Shkreli, who founded Turing Pharmaceuticals and was the chief executive of the company, said that the criticism of the increase in Daraprim prices was unwarranted. He made the following three points:

• The higher price of Daraprim was more in line with the cost of other rare drugs for uncommon ailments.
• Very few patients require Daraprim and most require the drug for a short amount of time, making the overall impact of the higher prices small.
• Turing Pharmaceuticals wasn't trying to make a huge profit, but, rather, was trying to stay in business and maintain enough revenue to continue research and the development of improved drugs.

Shkreli said, “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business." On December 21, 2015, Shkreli was arrested based on allegations of securities fraud and resigned as CEO of Turing Pharmaceuticals.

Turing developed a patient access program designed to offer lower prices to hospitals and increase the availability of Daraprim through other methods. Nancy Retzlaff, the Chief Commercial Officer of Turing, said, "Combined with our robust patient access programs, this is an important step in our commitment to ensure ready access to Daraprim at the lowest possible out-of-pocket cost for both hospitals and patients. We pledge that no patient needing Daraprim will ever be denied access."

Other drugs with increased price tags

Daraprim was not the only case of dramatically increased drug prices; the prices of several drugs were increased to many times the previous price between 2012 and 2016. Some examples are below:

• The price of 30 pills of Cycloserine, which is used to treat drug-resistant tuberculosis, increased from $500 for 30 pills to $10,800 for 30 pills.
• The price of Isuprel, a heart drug acquired by Marathon Pharmaceuticals in 2013, was increased by 525 percent.
• Marathon also purchased Nitropress at the same time as Isuprel and more than tripled the price.
• In October 2013, the price of the antibiotic Doxycycline went up from $20 per bottle to $1,849 per bottle.
• Mylan increased the price of EpiPens from $57 in 2007 to about $500 in August 2016.

A study by Truveris concluded that the cost of brand drugs increased by 14.8 percent overall in 2014, and the prices of specialty drugs increased by 9.7 percent in 2014.

In general, representatives and supporters of the pharmaceutical industry argue that increased drug prices are a result of production costs, availability, and demand and that price hikes are necessary to fund continued research and the development of new and better drugs. Critics of pharmaceutical companies that increase the price of drugs accuse the industry of profiteering and argue that the availability and affordability of drugs should be a basic right for patients.

A poll released by the Kaiser Family Foundation in late October 2015 indicated that 77 percent of U.S. residents thought the affordability of drugs used to treat chronic conditions was a priority.

Legislation

According to policies established in early 2015 by the state's health insurance exchange marketplace, which was established by the Affordable Care Act, patients with life-threatening conditions participating in California's insurance exchange cannot be asked to pay more than $250 per drug per month. California Assembly Bill 339, which was signed into law in October 2015, applied this co-payment cap to patients not participating in the exchange as well. California was the first state to establish such a limitation on drug co-payments.

2014 campaign finance

The table below shows the campaign contributions for California ballot measures in 2014, which can be compared with the campaign finance information for this initiative. The support campaign for Proposition 46, which featured 2014's most expensive race, raised $12,392,768 and the opposition campaign raised $57,835,713. In 2014, the average of the total contributions for support and opposition ballot measure campaigns was $22,325,136.

Proposition	Donations in favor	Donations against	Outcome
Proposition 41	$632,326	$0	a
Proposition 42	$647,254	$0	a
Proposition 1	$16,832,314	$97,999	a
Proposition 2	$15,436,802	$0	a
Proposition 45	$6,274,002	$56,954,326	d
Proposition 46	$12,392,768	$57,835,713	d
Proposition 47	$10,791,022	$501,925	a
Proposition 48	$448,730	$22,081,047	d

How much money is being spent on this?

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By November 2, 2016, the combined support and opposition campaign contributions added up to more than $125.89 million.

Proposition 61 was the most expensive ballot measure battles in 2016. Most of the donations to the opposition campaign were made by pharmaceutical companies, with major backing from Pharmaceutical Research and Manufacturers of America (PhRMA). The signature-gathering efforts and support campaign were sponsored by the AIDS Healthcare Foundation.

For comparison, in 2014, the most expensive California ballot measure race, Proposition 46, featured a final support campaign war chest of $12,392,768 and a final opposition campaign war chest of $57,835,713. The average of the total combined contributions for support and opposition ballot measure campaigns in 2014 was $22,325,136. Only two measures featured total contributions of over $23 million. In 2014, in California, the ballot measure campaign that spent the most money, whether in support or opposition to proposals, won victory on election day. Large amounts of campaign funding have not guaranteed victory in all recent ballot measure elections, however. For example, supporters of California Proposition 38, an education income tax increase, failed after spending about $47 million—over a thousand times more than what was spent by opponents.

Ohio drug price initiative

See also: Ohio Issue 2, Drug Price Standards Initiative (2017)

Ohioans were scheduled to vote on a drug price standards initiative on November 7, 2017. The Ohio measure was designed to require state agencies to pay the same prices that the U.S. Department of Veterans Affairs pays for prescription drugs. The measure would only apply to the purchasing of drugs by state agencies and not to purchases made by individuals.

Proposition 61 was similar to the Ohio initiative. Professor Rachel E. Sachs of the Washington University in St. Louis School of Law deemed the two measures "nearly identical," and The Columbus Dispatch called them "almost identical." The following table illustrates the similarities and differences, with differing provisions in italics, between the Ohio initiative and California Proposition 61:

Ohio Issue 2 (2017) "The Ohio Drug Price Relief Act"	California Proposition 61 (2016) "The California Drug Price Relief Act"
• Adds a new section to Ohio Revised Code	• Adds a new section to California Welfare and Institutions Code
• Forbids state agencies from entering into purchasing agreements with drug manufacturers unless the net cost of the drug is the same or less than that paid by the VA.	• Forbids state agencies from entering into purchasing agreements with drug manufacturers unless the net cost of the drug is the same or less than that paid by the VA.
• Applies to all programs where the state is the ultimate payer for the drug, even if it did not purchase the drug directly.	• Applies to all programs where the state is the ultimate payer for the drug, even if it did not purchase the drug directly.
• No equivalent provision excluding Medicaid managed care.	• Excludes drugs purchased or procured under Medi-Cal (Medicaid) managed care.
• Ohio Governor and General Assembly may take any additional actions to promptly carry out the initiative's provisions.	• General Assembly may amend the initiative with a two-thirds vote of both chambers to further its purposes.
• Defended against lawsuits by the Ohio Attorney General. However, proponents have a "direct and personal stake in defending" the initiative and may defend it in any court. The state shall provide reasonable compensation to the proponents' attorneys for defending the measure.	• Defended against lawsuits by the California Attorney General. However, proponents have a "direct and personal stake in defending" the initiative and may defend it in any court. The state shall provide reasonable compensation to the proponents' attorneys for defending the measure. Proponents defending the measure would not be considered at-will employees, but could be removed from defense by the legislature when good cause exists to do so. Proponents would take the Oath of Office.
• If the measure is ruled unenforceable, proponents shall pay a civil fine of $10,000 to Ohio.	• If the measure is ruled unenforceable, proponents shall pay a civil fine of $10,000 to the General Fund of California.

The major difference between the two initiatives was that Proposition 61 was designed to exempt from price regulation drugs purchased or procured under Medi-Cal (Medicaid) managed care programs. The Ohio initiative does not exempt from price regulation drugs purchased or procured under Ohio Medicaid managed care programs. Medicaid managed care programs are insurance companies or networks of healthcare providers that contract with Medicaid to provide care for Medicaid recipients. People who use Medicaid managed care programs must sign up for plans to receive services. In 2011, about 60 percent of California Medi-Cal recipients and 75 percent of Ohio Mediciad recipients were enrolled in managed care programs.

The AIDS Healthcare Foundation was a major donor to Ohioans for Fair Drug Prices, the campaign supporting the Ohio measure.

Path to the ballot

See also: California signature requirements

• Michael Weinstein, founder and president of the AIDS Healthcare Foundation, submitted a letter requesting a title and summary on March 2, 2015.
• A title and summary was issued by California's attorney general on May 6, 2015.
• 365,880 valid signatures were required for qualification purposes.
• Supporters had until November 2, 2015, to collect the required signatures.
• Proponents submitted 542,879 signatures by the deadline.
• The measure qualified for the 2016 ballot on December 17, 2015.
• The measure was assigned its official title, Proposition 61, on July 2, 2016.

Cost of signature collection:
Sponsors of the measure hired PCI Consultants, Inc. to collect signatures for the petition to qualify this measure for the ballot. A total of $1,355,765.65 was spent to collect the 365,880 valid signatures required to put this measure before voters, resulting in a total cost per required signature (CPRS) of $3.36.

State profile

Demographic data for California
	California	U.S.
Total population:	38,993,940	316,515,021
Land area (sq mi):	155,779	3,531,905
Race and ethnicity**
White:	61.8%	73.6%
Black/African American:	5.9%	12.6%
Asian:	13.7%	5.1%
Native American:	0.7%	0.8%
Pacific Islander:	0.4%	0.2%
Two or more:	4.5%	3%
Hispanic/Latino:	38.4%	17.1%
Education
High school graduation rate:	81.8%	86.7%
College graduation rate:	31.4%	29.8%
Income
Median household income:	$61,818	$53,889
Persons below poverty level:	18.2%	11.3%
Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015) Click here for more information on the 2020 census and here for more on its impact on the redistricting process in California. **Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here.

Presidential voting pattern

See also: Presidential voting trends in California

California voted for the Democratic candidate in all seven presidential elections between 2000 and 2024.

More California coverage on Ballotpedia

• Elections in California
• United States congressional delegations from California
• Public policy in California
• Endorsers in California
• California fact checks
• More...

Related measures

Healthcare measures on the ballot in 2016
State	Measures
Washington	Washington Taxation of Stand-Alone Dental Plans, Advisory Vote 14 d
Nevada	Nevada Medical Equipment Sales Tax Exemption, Question 4 a

Recent news

The link below is to the most recent stories in a Google news search for the terms California Proposition 61 drug price. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

California Proposition 61, Drug Price Standards (2016) - Google News

See also

Suggest a link

• California 2016 ballot propositions
• 2016 ballot measures
• Laws governing the initiative process in California

External links

Basic information

• Letter requesting a ballot title for Initiative 15-0009
• California 2016 Voter Guide

Support

• Yes on Proposition 61 - Californians for Lower Drug Prices
• Yes on Proposition 61 - Californians for Lower Drug Prices Facebook
• Yes on Proposition 61 - Californians for Lower Drug Prices Twitter

Opposition

• No on Proposition 61 - No Misleading Rx Measure
• No on Proposition 61 - No Misleading Rx Measure Facebook
• No on Proposition 61 - No Misleading Rx Measure Twitter

Other resources

• Upvote California Podcasts on Ballot Measures

Footnotes

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