Drug companies court California's uninsured voters
By Clea Benson -- Bee Capitol Bureau

August 1, 2005

SACRAMENTO -- It looks a lot like a prescription-drug ad: With a montage of active people in colorful settings playing across the screen, a woman's soothing voice intones, "We're making medicine more affordable."
But instead of pushing a particular brand-name medication, an ad now playing in major media markets across California is publicizing discounts that drug companies offer to the low-income uninsured.

It's part of a new multi-million-dollar campaign, dubbed Rx Help for Californians, that the pharmaceutical industry is waging to connect eligible state residents with existing price breaks.

The effort comes as pharmaceutical companies are preparing to campaign against Proposition 79, a measure on the Nov. 8 special election ballot that would force them to expand their discount programs and offer cheap drugs to about 10 million Californians. The industry also has placed a rival initiative on the ballot, Proposition 78, which would allow drug companies to voluntarily provide smaller discounts to fewer people than Proposition 79.

Proponents of Proposition 79 say they view the ads now airing as an opening salvo in the fall campaign.

"The drug companies are clearly trying to dissipate anger over unfair drug prices before voters have the opportunity to take action in November," said Anthony Wright, director of Health Access, one of the consumer groups behind Proposition 79. "They know that there's a meaningful solution to high prescription drug costs in Proposition 79 on the November ballot and this is the beginning of a major campaign to distract attention from that solution."

But the drug companies dismiss that claim.

"Frankly, that's ridiculous," said Kassy Perry, a spokeswoman for Rx Help for Californians.

The ads started airing in March, before either measure was on the ballot, and were part of a deal to set up a clearinghouse for drug discounts that pharmaceutical makers cut with Gov. Arnold Schwarzenegger last year, Perry said.

The television ad refers viewers to a web site and a toll-free number where they can learn if they qualify for markdowns on 2,300 different medicines: www.rxhelpforca.org or 877-777-7815.

To get discounts, Californians must have limited incomes and lack insurance coverage for medications.

Officials at the Pharmaceutical Research and Manufacturers Association, the trade group representing most of the major drug companies in the United States that is behind Rx Help for Californians, don't deny that the effort is designed to combat perceptions that drugs are too expensive. They say they have committed "tens of millions of dollars" to conducting similar outreach in every state.

"We're doing it for two reasons: because it's the right thing to do, and because it's the smart thing to do," said Ken Johnson, a vice president of the Pharmaceutical Research and Manufacturers Association. "If we're going to preserve a free-market health-care system that respects innovation, if we're going to avert health-care rationing and government-run health-care systems, we have to make sure people who fall through the cracks get a helping hand when they need it."

PhRMA last week released statistics showing that Rx Help for Californians has provided discounts to 50,000 Californians since the ad campaign started in March. Nationwide, similar drug-industry clearinghouses have helped 250,000 people over the past few months, PhRMA said.

Johnson said it was unclear exactly how much the heightened publicity had boosted use of the discount programs, which many drug companies have had in place for years. In the past, eligible consumers usually learned about the price breaks though their medical providers.

Last year, the industry provided 22 million free or deeply discounted prescriptions, Johnson said. That's less than one percent of the 3.5 billion prescriptions dispensed last year in the United States, according to IMS Health, a firm that tracks drug-industry statistics.

As the drug industry wages its $10 million campaign to publicize Rx Help for Californians, PhRMA's member companies have also started amassing a huge war chest for the ballot-initiative campaigns. As of Friday, PhRMA's initiative fund contained $57 million in contributions.

The consumer groups and Democratic interests behind Proposition 79 have yet to set up campaign accounts.