Bernie Sanders' Next Mission: Getting California Voters to Take a Chance on Prescription Drug Prices

This post is a collaboration between Countable and our partners at CALmatters.
Rising prescription drug prices have plagued consumers for years and state agencies have been feeling those effects as well. That led the AIDS Healthcare Foundation to advance Proposition 61, which has gained the support of Sen. Bernie Sanders (I-VT) and the opposition of the Chamber of Commerce. Californians will get a chance to vote on capping the amount that the state pays for pharmaceuticals this November in the hope of bringing costs under control.

What the Initiative Does

This initiative would prohibit state agencies from buying any prescription drug from the manufacturer for a price that exceeds the lowest price paid by the U.S. Dept. of Veterans Affairs (VA).

The price rule would apply to any program in which a state agency ultimately pays for the prescription drug, even if it doesn’t actually buy the drug (meaning it compensates the consumer).

Purchases of prescription drugs under managed care programs that get funding through Medi-Cal (the state’s Medicaid program) would be exempted.

This initiative will appear on California ballots on November 8 as "Proposition 61."

In Favor

Proposition 61 will protect taxpayers and those who rely on prescription drugs through state programs by getting the state of California a better deal on what it pays pharmaceutical companies.

"Prescription drug prices in the United States are the highest in the world — by far. Californians on Nov. 8 have a chance to stand up to the pharmaceutical industry’s greed and spark a national movement to end this price-gouging." — Sen. Bernie Sanders.

Opposed

No one really knows what effect Proposition 61 will have on the prices the state of California pays for prescription drugs, and it could have negative consequences if pharmaceutical companies raise prices.

"The nonpartisan Legislative Analyst’s Office cannot determine whether Proposition 61 will save the state any money. In fact, state health care spending could go up. Not only could the state pay more for prescription drugs, but patients would have to go through a cumbersome approval process before getting their medicine, putting bureaucrats between patients and their doctors." — Don Harper, California American Legion.

In Depth

The state of California spent almost $3.8 billion on prescription drugs in 2014-15, with $1.8 billion going to help low-income Californians through Medi-Cal and another $1.3 billion going to the Public Employees’ Retirement System (CalPERS). The next two largest public spenders were the University of California system and the state’s Dept. of Corrections, which spent $334 million and $211 million, respectively, on prescription drugs during that period.

That purchasing power gives supporters hope that California’s clout could lead the state to getting a comparable deal to what the federal VA receives. But detractors worry that no one knows for sure what this proposition, if enacted, would do to prices. The state may not get the same deal the VA gets or pharmaceutical prices could raise prices across the board.

CALmatters reported that it would also be difficult for the state’s Legislative Analyst’s Office to determine if the state was really saving money, as negotiations over prescription drug prices are sealed by law or through private contracts.

Read more at CALmatters.