California Rx Discount Legislation Repelled, But Not Necessarily Dead

The defeat of two California ballot initiatives that would have created a drug discount program will not deter the propositions' backers from pursuing similar legislation through the traditional legislative process.

Props 78 and 79, which would have established a state pharmacy assistance program, were defeated by a wide margin Nov. 8 by California voters, but both measures have companion legislation in the state legislature.

Prop 78 was based on Senate Bill 19, which has been stalled in committee since May. The California Rx Program would authorize the negotiation of drug rebate agreements with manufacturers willing to participate in the program.

"We will continue to support this legislation and hope to see it re-introduced and passed as quickly as possible," the Pharmaceutical Research & Manufacturers of America said Nov. 9.

Prop 79, which was supported by consumer groups and unions, is similar to Assembly Bill 75, which passed the House June 2. To bolster its negotiating leverage, AB 75 would permit the state to require prior authorization in the California Medicaid program for drugs marketed by any firm not participating in Cal Rx.

"The coalition of consumer, senior and health groups sponsoring Prop 79...intend to renew their push for a prescription drug discount plan when the state legislature reconvenes next year," Consumers Union said.

Both SB 19 and AB 75 would require the development of a system to provide patients with the best discount available either through Cal Rx or manufacturer patient assistance programs. PhRMA has advocated the promotion of PAPs as a means to restore its tarnished public image (see ¹ (Also see "Manufacturer Patient Assistance Programs To Change Following IG Guidance" - Pink Sheet, 14 Nov, 2005.)).

Although PhRMA publicly endorsed Prop 78, the Nov. 8 votes represent a victory for the pharma industry as it avoided government-brokered price concessions.

PhRMA did suffer one legislative setback on election day; Washington voters rejected a ballot initiative that would have limited recovery of non-economic damages for healthcare liability cases to $350,000.