Proposition 61: California Becomes Ground Zero in the Battle to Curb Drug Price Gouging

LOS ANGELES, CA -- With the potential to become one of the the most expensive ballot measure campaigns in California history, Proposition 61 is being watched by activists and legislators around the country. Why? Because it takes on big pharmaceutical companies directly in an effort to curb drug company price gouging.

The controversy centers on the way it aims to go about doing that.

Proposition 61 seeks to tie the cost of prescription drugs that state agencies pay to the low rate paid by the U.S. Department of Veterans Affairs. If it works, it could keep the cost of life-saving medicine down while also saving taxpayers millions. But it’s a gambit that could fail if drug companies respond by simply raising the price that veterans pay for medicine.

It’s championed by progressives such as Bernie Sanders, who on Friday called Proposition 61 the "most significant proposition in the country to end drug industry greed."

As of Oct. 2, more than $101 million had been raised by the measure’s supporters and opponents. It’s passage would have ripple effects across the nation as statehouses everywhere watch to see if it can effectively contain rising drug prices.

``The entire nation is looking at California," Sanders said at a Hollywood rally in favor of the measure Friday.

The VA pays about 20 to 25 percent less than the average government agency for drugs, so government agencies would save money if they paid the same rate goes the theory behind Proposition 61. But the Legislative Analyst's Office has struggled to estimate how much money the state would save. That’s because in some cases, certain state agencies may already be paying prices as low as the VA for some drugs. And if the drug companies respond to the law by simply raising the costs it charges the VA, then there could be no savings.

In fact tv ads, funded in part by the pharmaceutical companies opposing Proposition 61, warn that the measure would raise drug prices for veterans.

According to Ballotpedia, “Major financial backing for the campaign on behalf of Proposition 61 comes from the AIDS Healthcare Foundation. The major backers for the campaign against the measure comes from the pharmaceutical companies Merck & Co., Inc. and Pfizer, Inc., according to the Secretary of State's Office.”

The state Green Party is in favor of the measure while the Republican Party opposes it.

Proponents of the measure couch it as a moral issue, noting that people are dying because of skyrocketing drug costs. Curbing the costs, would make life-saving drugs more accessible to everyone, they contend.

According to the official argument in favor of the measure, “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.”

Greedy drug companies charge $300,000 a year for one cancer drug and raised the price of infection-fighting overnight from $13.50 to $750, the proponents argue.

But opponents of the measure say it attempts a noble goal in a deeply flawed way. Opponents including a broad coalition of groups including the American Medical Association, the NAACP and the Veterans of Foreign Wars, warn that it’s sure to spike prescription drug costs for veterans without any guarantee of savings for taxpayers.

According to the official argument against the measure on Ballotpedia, “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.”

Click here to read more about Proposition 61. Photo: by www.ccPixs.comvia flickr.com