Drug Companies Collect $43 Million For Special Election Fight
KXTV, CA
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July 14, 2005

Fundraising numbers for dueling drug initiatives on the November 8 special election ballot show California is shaping up for a possible record-breaking, David vs. Goliath battle between drug companies and state labor and consumer groups.

The nation's largest drug companies have donationd $43 million in the past month toward the fight over a pair of propositions directed at cutting the cost of prescription drugs to California patients.

Pharmaceutical giants Pfizer, Merck and GlaxoSmithKline donationd $8.5 million each to the California Initiative Fund, formed to help pass the drug industry-sponsored measure Proposition 78, at the same time those companies are working to defeat Proposition 79, supported by many state unions and consumer advocacy organizations.

"They're scared about it enough that they're willing to spend tens of millions of dollars to defeat it," said Anthony Wright of statewide health care consumer advocacy coalition Access Health California.

With their already overflowing war chest, analysts predict the drug price propositions could become the most expensive California ballot initiative ever. The current record is the estimated $66 million spent by state Indian tribes to help pass casino gambling on tribal lands in 1998.

While Propositions 78 and 79 each offer lower drug prices for California's poorest residents, the initiatives offer wildly different solutions for getting medication to those most in need.

Under Proposition 79, individuals making less than $37,000 or families making less than $75,000 would be eligible for pharmacy discounts on prescription drugs. Any drug companies who can not work out discount pricing with the state would also be frozen out of selling drugs to California's $4 billion Medi-Cal program.

Opponents argue Proposition 79 is too costly for drug companies and could stunt the supply of needed drugs to Medi-Cal patients.

Proposition 78 supporters say their proposal offers a more balanced alternative. Under Proposition 78, drug discounts would be available only to individuals making less than $28,000 and families making less than $56,000. Proposition 78 would also make compliance with the program voluntary on the part of drug companies.

"It's really two campaigns. We have to educate voters on the benefits of how Proposition 78 will help the uninsured and we have to tell them how Proposition 79 is a false promise that can never be implemented," said pharmaceutical industry spokesperson Jan Faiks.

Opponents say not enough Californians will be covered under the proposal and drug companies will have no incentive to participate in the plan without the threat of penalties.

Wright said the drug industry sees the results of the upcoming election as a strong indicator of what could be on the horizon for their business. "The prescription drug companies have said their number one national priority is to kill this measure in California. They are scared if we get lower prices, other states will want to do the same," said Wright.