BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...
Oct. 20 — The pharmaceutical industry pumped in another $22 million in late contributions against California’s initiative to limit what the state pays for prescription drugs with total industry donations reaching nearly $109 million, filings with the California Secretary of State’s Office reveal.
Proposition 61 would prohibit state agencies from paying more than what the U.S. Department of Veterans Affairs pays for prescription drugs. Opponents, led by the Pharmaceutical Research and Manufacturers of America, added nearly $22 million in late contributions, the California Secretary of State’s Office reported Oct. 19.
Merck & Co. and Pfizer Inc. each contributed a total $9.4 million, while Johnson & Johnson contributed $9.3 million, filings said.
Proponents of Prop. 61, the California Drug Price Relief Act, contributed nearly $14.5 million. The California Nurses Association donated $54,930, and sponsor AIDS Healthcare Foundation paid the rest, according to reporting though Oct. 14.
Opponents as of Sept. 24 spent $48.7 million, compared with the $7.8 million the Prop. 61 backers spent, the filings said.
“The passage of this initiative would have a tremendous financial impact, so the amount of money they’re spending to defeat Proposition 61 is a fairly small amount compared to the broader financial stakes involved,” Dan Schnur, director of the University of Southern California’s Unruh Institute of Politics, told Bloomberg BNA.
“If certain California state agencies receive VA prices, as the measure intends, this would set new prescription drug price limits at VA prices for all state Medicaid programs,” the state Legislative Analyst’s Office said in a July analysis. “As a result, the measure could extend the VA’s favorable drug prices to health programs serving tens of millions of additional people nationwide, placing added pressure on drug manufacturers to take actions to protect their profits under the measure.”
Prop. 61 covers drug spending for 4 million of California’s 39 million residents. The University of California, the California Public Employees’ Retirement System, public health, jails and prisons, and California State University would be affected by Prop. 61. Exempted are drug purchases in the managed care program funded through the state Medicaid program, Medi-Cal.
“This is the future of ballot initiatives in California, make no mistake. The initiative process was originally intended to be a voice of the people, an opportunity to give voters a chance to weigh in on matters that their elected representatives were not resolving,” Schnur said Oct. 19. “But in the state of 39 million people, communicating a message on behalf of or against an initiative is extremely expensive. So it’s not surprising that the initiative process has become the province of special interests as well.”
California is an expensive state, Kathy Fairbanks, spokeswoman for the No on Prop 61-Californians Against the Deceptive Rx Proposition, said Oct. 19.
“Even if there were only one or two initiatives, we unfortunately have to spend a lot of money to reach voters in California. And now add to it 16 additional initiatives and everything else to it and it becomes more expensive,” Fairbanks told Bloomberg BNA.
Major markets including Los Angeles, San Francisco, San Diego and Sacramento mean major spending to get out the message amid advertising for state and local initiatives and office seekers.
“It just takes more firepower to cut through the clutter,” said Fairbanks.
Add to the volume of initiatives and candidates the advent of permanent absentee voting, which changes the time line to inform the 65 percent of voters who cast ballots by mail, said Garry South, a longtime political consultant working on Yes on 61 campaign, told Bloomberg BNA.
“I think that the pharma side will break all records of money spent either on behalf of or in opposition” to a measure, South said Oct. 19.
Prop. 61’s impact on pharmaceutical companies’ financial performance may not be as lethal as feared, RBC Dominion Securities analyst Michael Yee said in a note to clients. His remarks were included in analysis published last month by Bloomberg Markets.
“We think a possible 2-3 percent earnings per share impact to large-caps if this initiative were passed across all 50 states, but this is more headline risk than anything,” Yee wrote.
To contact the reporter on this story: Joyce E. Cutler in San Francisco at JCutler@bna.com
To contact the editor responsible for this story: Brian Broderick at firstname.lastname@example.org
The campaign contribution data from the California Secretary of State’s Office are at http://src.bna.com/jwR.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)