Everything you need to know about ranked-choice voting in one spot. Click to learn more!

California Proposition 79, Prescription Drug Discount Program Initiative (2005)

From Ballotpedia
Jump to: navigation, search
California Proposition 79
Flag of California.png
Election date
November 8, 2005
Topic
Healthcare
Status
Defeatedd Defeated
Type
State statute		Origin
Citizens

California Proposition 79 was on the ballot as an initiated state statute in California on November 8, 2005. It was defeated.

A "yes" vote supported establishing a state drug discount program to reduce prices for prescription drugs for Californians with an income at or below 400 percent of the federal poverty level.

A "no" vote opposed establishing a state drug discount program to reduce prices for prescription drugs for Californians with an income at or below 400 percent of the federal poverty level.


Election results

California Proposition 79

Result Votes Percentage
Yes 3,003,912 39.37%

Defeated No

4,625,132 60.63%
Results are officially certified.
Source


Text of measure

Ballot title

The ballot title for Proposition 79 was as follows:

“
Prescription Drug Discounts. State-Negotiated Rebates. Initiative Statute.


”

Ballot summary

The ballot summary for this measure was:

“

• Provides for prescription drug discounts to Californians who qualify based on income-related standards, to be funded through rebates from participating drug manufacturers negotiated by California Department of Health Services.

• Prohibits new Medi-Cal contracts with manufacturers not providing the Medicaid best price to this program, except for drugs without therapeutic equivalent.

• Rebates must be deposited in State Treasury fund, used only to reimburse pharmacies for discounts and to offset costs of administration.

• At least 95% of rebates must go to fund discounts.

• Establishes oversight board.

• Makes prescription drug profiteering, as described, unlawful.		”

Full Text

The full text of this measure is available here.

Fiscal impact

See also: Fiscal impact statement

The fiscal estimate provided by the California Legislative Analyst's Office said:[1]

“
  • One-time and ongoing state costs, potentially in the 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 net costs or savings as a result of provisions linking state Medi-Cal rebate contracts and the new drug discount program.
  • Unknown potentially significant savings for state and county health programs due to the availability of drug discounts.
  • Unknown costs and revenues from the provisions regarding lawsuits over profiteering on drug sales.
  • Potential unknown effects on state revenues and expenditures from changes in prices and quantities of drugs sold in California.[2]
 ”

Support

"Yes on 79" website banner from the Yes on 79 website

Supporters

  • Henry "Hank" Lacayo, state president of the Congress of California Seniors[1]
  • Elizabeth M. Imholz, west coast office director of the Consumers Union[1]
  • Lupe Alonzo-Diaz, executive director of the Latino Coalition for a Healthy California[1]
  • Betty Perry, public policy director of the Older Women's League of California[1]
  • Michael Weinstein, president of the AIDS Healthcare Foundation[1]
  • Jacqueline Jacobberger, president of the League of Women Voters of Californi [1]
  • Barbara A. Brenner, executive director of Breast Cancer Action[1]
  • Ramon Castellblanch, policy advisor to the Senior Action Network[1]
  • Kathy J. Sackman, RN, president of the United Nurses Association of California[1]

Official arguments

The official voter guide arguments in favor of Proposition 79 were signed by Henry "Hank" Lacayo, state president of the Congress of California Seniors; Elizabeth M. Imholz, West Coast office director of the Consumers Union; and Lupe Alonzo-Diaz, executive director of the Latino Coalition for a Healthy California:[1]

“

As prescription drug prices soar, more and more Californians are forced to choose between vital medicines and other necessities. There are two prescription drug measures on the ballot. Prop. 78 is sponsored by drug companies. Prop. 79 is sponsored by consumer, senior and health organizations, and labor unions. The pharmaceutical industry has pledged to spend 'whatever it takes' to defeat Prop. 79, launching what could be the most expensive initiative campaign in California history. Manufacturers like GlaxoSmithKline and Merck have each donated nearly $10 million. Here’s why: PROP. 79 PROVIDES ENFORCEABLE, NOT 'VOLUNTARY,' DISCOUNTS BY DRUG COMPANIES

Prop. 78 is completely voluntary for drug companies: they are free to choose whether or not to offer discounts. But California has tried a voluntary drug discount plan before. The pharmaceutical industry refused to participate so the program dissolved in 2001. Prop. 79 has an enforcement mechanism. If a drug company refuses to provide discounts, the state can shift business away from that company and buy from other drug companies that offer discounts. CALIFORNIA WOULD USE ITS PURCHASING POWER TO GET THE BEST PRICE

Americans pay more for their prescriptions than consumers in many wealthy nations. That’s in part because these other governments negotiate discounts from the drug industry on behalf of their citizens. California does something similar through Medi-Cal, negotiating discounts of 50 percent and more, saving taxpayers $5 billion in the last 10 years. Prop. 79 builds on this success, using the same mechanism to negotiate these discounts for eligible Californians. As a result, consumers will pay less out of their own pockets for prescriptions at the expense of the drug companies, not taxpayers. Under Prop. 79, eligible Californians would get a drug discount card to present to their pharmacist to receive discounts of up to 50 percent or more. PROP. 79 OFFERS DISCOUNTS TO 8–10 MILLION CALIFORNIANS

Nearly twice as many Californians will be eligible for discounts under Prop. 79 than under Prop. 78, including:

  • Californians with catastrophic medical expenses who spend at least five percent of their income on medical

expenses;

  • The uninsured who earn up to 400 percent of the Federal Poverty Level ($64,360 for a family of three);
  • Californians on Medicare for drug costs not fully covered by Medicare;
  • Seniors, the chronically ill, and others with inadequate drug coverage through private insurers or their employer.

PROP. 79 WOULD SAVE PATIENTS, TAXPAYERS, AND EMPLOYERS MONEY By making affordable drugs more accessible to more people than Prop. 78, fewer people would fall onto Medi-Cal or other public programs, and need to use taxpayer-funded emergency rooms. Prop. 79 can reduce employers’ health premiums by authorizing a new purchasing pool to reduce drug prices for employer-paid coverage. PROP. 79: BACKED BY DOZENS OF HEALTH, SENIOR, AND CONSUMER ADVOCACY ORGANIZATIONS

Stand up to the unfair, unaffordable prices of the prescription drug industry. For real, enforceable discounts of up to 50 percent or more on prescription drugs for 8–10 million Californians, VOTE YES on PROP. 79.[2]

”

Opposition

Opponents

  • Tom Murphy, chair of the California Arthritis Foundation Council[1]
  • John Kehoe, policy director of the California Senior Advocate League[1]
  • Rodney Hood, MD, president of the Multicultural Foundation[1]
  • Rodrigo A. Munoz, M.D., past president of the San Diego County Medical Society[1]
  • John Merchant, chair of California Citizens Against Lawsuit Abuse[1]
  • Chris Mathys, president, Valley Taxpayers Coalition, Inc.[1]

Official arguments

The official voter guide arguments opposing Proposition 79 were signed by Tom Murphy, chair of the California Arthritis Foundation Council; John Kehoe, policy director of the California Senior Advocate League; and Rodney Hood, MD, president of the Multicultural Foundation:[1]

“

We all want to provide cheaper prescription drugs to needy Californians, but Proposition 79 just won’t work. It’s based on a flawed proposal from the state of Maine that never went into effect, never delivered a single discount, and was ultimately abandoned by Maine. Californians don’t need another false initiative promise that will result in years of legal challenges and ultimately never go into effect.

'Maine residents were counting on a drug discount program that was just like California’s Proposition 79. But it was tied up in court and never received approval from the federal government. Not a single patient got a discounted drug as a result of that failed program.' Calvin Fuhrmann, MD, FCCP Kennebunk Medical Center, Maine

Backed by public employee unions, Proposition 79 sets up another big government program that will cost California millions. With huge budget deficits that already affect funding for critical programs, how can we take on a massive new government program? On top of that, Proposition 79 jeopardizes over $480 million in rebates that taxpayers currently receive from pharmaceutical companies.

Because Proposition 79 changes the state’s Medi-Cal program, which is largely funded with federal dollars, the federal government would have to approve Proposition 79. No federal administration, Democratic or Republican, has ever approved a program like Proposition 79. Why won’t Proposition 79 receive federal approval?

Prop. 79 risks the health of poor patients in order to provide drug discounts for people who make as much as $77,000 annually, including some people who already have health insurance. Proposition 79 says that if a drug manufacturer does not provide steep discounts to these higher income Californians, they can’t provide prescription drugs to help the poor, seniors, and disabled patients who depend on Medi-Cal.

'Proposition 79 jeopardizes access to prescription drugs for the lowest income and most vulnerable individuals in this state.' Neva Hirschkorn, Executive Director Epilepsy Foundation of Northern California

A hidden section in Proposition 79 will let trial lawyers file thousands of frivolous lawsuits simply by claiming the price charged for the product is too much or that the manufacturer’s profits are too high. The initiative doesn’t define what is a fair price or a reasonable profit! Worse, trial lawyers don’t need a client to bring these lawsuits and can keep for themselves 100% of the money they are able to force from a defendant!

'Last November, Californians passed Proposition 64 to prevent shakedown lawsuits. Proposition 79 would re-open the door to shakedowns, flood our courts with frivolous litigation, and drive up the cost of prescription drugs.' John H. Sullivan, President Civil Justice Association of California

Like so many previous initiatives, 79 won’t deliver what it claims. It will result in years of litigation and will ultimately be rejected by the federal government. It creates an expensive big government program, jeopardizes the health of low income Californians, and will result in a deluge of frivolous litigation benefiting trial lawyers at our expense. Prop. 79 is the wrong prescription for California. Join seniors, taxpayers, health advocates, patients, and small businesses and VOTE NO on Proposition 79.[2]

”


Path to the ballot

See also: California signature requirements

In California, the number of signatures required for an initiated state statute is equal to 5 percent of the votes cast at the preceding gubernatorial election. For initiated statutes filed in 2005, at least 373,816 valid signatures were required.

The campaign paid $4,635,466 to Kimball Petition Management to qualify the measure for the ballot.[3]

See also: California ballot initiative petition signature costs

See also

2005 Measures

California

News and analysis

External links

Supporters:

Footnotes

  1. ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 University of California Hastings, "Voter Guide," accessed April 2, 2021
  2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
  3. ↑ Expenditure detail for Yes on 79, accessed April 2, 2021
Flag of California
v • e
State of California
Sacramento (capital)
Elections

What's on my ballot? | Elections in 2025 | How to vote | How to run for office | Ballot measures

Government

Who represents me? | U.S. President | U.S. Congress | Federal courts | State executives | State legislature | State and local courts | Counties | Cities | School districts | Public policy

Retrieved from "https://ballotpedia.org/wiki/index.php?title=California_Proposition_79,_Prescription_Drug_Discount_Program_Initiative_(2005)&oldid=9011390"