Consumer groups aiming to put drug plans on ballot

By Clea Benson -- Bee Capitol Bureau
Published 2:15 am PST Tuesday, January 25, 2005

A month after the Schwarzenegger administration unveiled a plan for bringing cheaper prescription drugs to some Californians, two consumer groups are taking steps to put alternatives on the ballot that would cover more people and take a tougher stance toward drug companies.

Gov. Arnold Schwarzenegger's plan, known as California Rx, has been introduced as a bill in the Legislature. Under his model, the state would negotiate with drug companies to bring price breaks to low-income Californians. Drug companies eager to market their products to a large pool of buyers would participate voluntarily.

But Democrats and consumer groups have criticized the governor's proposal for covering only a small group of Californians and for lacking any enforcement muscle to bring drug companies to the table. So consumer organizations have announced that they plan to seek voter signatures to put their own measures on the next ballot.

The measures could appear on a ballot as soon as this year if proponents gather enough signatures for them to qualify and if Schwarzenegger calls a special election.

One potential initiative, submitted Monday to the attorney general by a coalition of consumer groups, would allow all Californians paying a $10 membership fee to join the same purchasing pool that currently negotiates drug discounts for state employees. It would also impose a $100,000 fine on drug companies charging "excessive" prices or making "unreasonable" profits.

"This initiative will harness the purchasing power of California to negotiate discounts on behalf of everyone in the state," said consumer advocate Jerry Flanagan at a news conference Monday.

Anthony Wright of Health Access, a nonprofit health-consumer group, said his organization also will try to qualify a drug-discount proposal for the ballot. The measure, submitted last week to the attorney general, would drop drug companies from the preapproved list for the state's $4 billion Medi-Cal drug-purchasing program for the needy if they did not offer similar discounts to the uninsured.

The Health Access plan would apply to those making up to four times the federal poverty level, or $75,300 for a family of four. The Republican governor's discount plan would be available to uninsured Californians making up to three times the federal poverty level, $56,500 for a family of four.

The proposal is similar to legislation that Assembly Democrats have introduced.

Stan Rosenstein, deputy director of Medical Care Services at the state Department of Health Services, said the administration had not yet reviewed Flanigan's proposal. But he said state officials believed an attempt to link drug discounts for the uninsured to the Medi-Cal program for the needy - as in the Health Access proposal and Democratic bills - would end up in court. It could also end up causing the state to lose rebate payments from drug manufacturers, he said.

"We don't think it's appropriate to condition the receipt of medication by a Medi-Cal beneficiary to a program for higher- income individuals," he said.

Wanda Moebius, a spokeswoman for the Pharmaceutical Research and Manufacturers of America, said the group had not seen the proposed initiatives and could not comment on them.