Proposition 78: Voluntary Prescription Drug Discount Program

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(Sacramento, CA)
Wednesday, October 26, 2005

Supporters say that under Prop 78 every drug a doctor prescribes is eligible for a direct discount and even though drug makers won’t be forced to offer price cuts a lot of them will.

"Participation would be voluntary, however we have a really high degree of interest by these companies," according to Yes on 78 spokeswoman Denise Davis. She says pharmaceutical companies would have an incentive to participate. "This also is very good for business for the drug companies. It creates a new purchasing pool."

Only low-income, uninsured Californians would be eligible for the discounts: individuals who earn up to 29-thousand dollars a year and families that make up to 58-thousand dollars annually. Davis says it’s similar to a discount drug program already underway in Ohio. "The important thing about Ohio is every major manufacturer does participate, the discounts are good and they will also be good in California – about 40%.

But Prop 78 opponents disagree. Earl Lui is a senior attorney with Consumers Union. "We don’t think the Ohio program works," he says. 
"If you talk to consumer groups there, it doesn’t really provide much of a discount and very few people in Ohio have signed up for the program."

Consumers Union supports Prop 78’s rival initiative: Proposition 79.
"Which basically says that the state can use its negotiating power to shift business from one drug company that doesn’t play ball and give a discount to other drug companies that do."

Proposition 78 is backed by pharmaceutical companies and endorsed by Governor Schwarzenegger and the California Chamber of Commerce.