Drug firms arming for battle at ballot box

By PAUL ELIAS, AP Biotechnology Writer
Tuesday, August 16, 2005

San Francisco (AP) --

The drug industry launched a television advertising blitz as part of a drug pricing battle that has already become the costliest ballot issue in California election history.

The industry has raised more than $72 million to oppose a November ballot measure that would require companies to provide drug discounts to California's poorest, uninsured residents. The proposition would also allow residents to sue drug companies for charging "unconscionable" prices, a prospect the industry fears will open it to a slew of costly lawsuits.

The world's largest pharmaceutical makers have donationd to a campaign that also supports a competing industry-sponsored proposition that would make the drug discounts voluntary and makes no mention of lawsuits.

On Monday, the industry's Washington D.C.-based lobbyist and leader of the California campaign — the Pharmaceutical Research and Manufacturers of America — rolled out a 30-second television ad it began airing throughout the state.

A coalition of unions and consumer health groups have raised a little more than $10 million in support of the mandatory drug discount measure and they oppose the industry-backed measure.

The dueling initiatives come at a time when prescription drug prices continue to rise.

"They are spending so much money because the drug companies want to protect their ability to price gouge," said Anthony Wright, head of consumer group Health Access California.

The industry-supported Proposition 78 would provide discounted drugs to uninsured Californians making up to three times the federal poverty level. That's about $28,000 for an individual and $58,000 for a family of four. The program would cover about 5 million people. Participation in the program by drug companies is voluntary.

Jan Faiks, a lawyer for the drug lobbyist, said at a news conference in Sacramento on Monday that the industry is also concerned with rising prices and providing for the uninsured. Faiks said the industry has voluntarily started several discount programs throughout the country and argued that tying price controls to programs like Medicaid can't be done without federal approval.

The competing measure, Proposition 79, would provide discounted drugs to uninsured Californians making up to four times the federal poverty level. That's about $38,000 for an individual and $77,000 for a family of four. The program would cover about 10 million people. Individuals would be able to sue drug companies if they believe the company engages in illegal profiteering.

"This will allow health care dollars to go into lawyers pockets," said Dorothy Rothrock, chief lobbyist for the California Manufacturers & Technology Association who attended the Sacramento news conference where campaign officials showed the 30-second spot be aired throughout California.

"Dockets will fill up trying to figure it out," Rothrock said.

If a drug company does not participate in the program, the state could choose to discourage the use of its drugs in the state's Medicaid program.