Pharma giants join forces to squash CA drug price cap initiative
- The California Drug Price Relief Act is a ballot initiative being launched by the Los Angeles-based AIDS Healthcare Foundation in response to soaring prescription drug prices and a flurry of recent media attention on pharma's practice of hiking prices for some older medications.
- The initiative requires 500,000 signatures to make it onto the state ballot in November 2016—and the AIDS nonprofit says that it's close to crossing that threshold, according to Pharmalot.
- Under the proposal, California state health programs like Medi-Cal (the state's Medicaid program) would pay the same rates for prescription drugs as the Department of Veterans Affairs does for the medicines. The VA usually wins significant discounts of about 24%. Biopharma is not, to put it lightly, a fan of this proposal and has poured more than $10 million in an effort to swat it down.
Welcome to the post-Martin Shkreli era.
With the media and national politicians placing pharma's pricing practices in their crosshairs, state and federal efforts to tackle hugh drug costs was nearly inevitable. This proposed California ballot initiative is one major example of that (there is also a similar campaign underway in Ohio).
PhRMA is now leading an effort to defeat the initiative in case it makes it onto the ballot, and has raised more than $10 million for those purposes. According to Ed Silverman, donors to this fund include Johnson & Johnson ($5.7 million); Bristol-Myers Squibb ($2.9 million); Purdue Pharma ($1.1 million); and a range of other companies including Pfizer, Daichii Sankyo, Eisai, The Medicines Co., and more.
It's unclear what the savings for California health programs would be if the initiative is ultimately passed into law by the public.