Proposition 61 Defeat Raises Questions for Drug Pricing

What does the defeat of California’s lower drug cost initiative mean for residents?

On Election Day, as Americans gathered at the polls to cast their vote for the next president, Californians were also faced with a choice about how to combat rising drug costs.

Proposition 61 would tie the price state agencies pay for drugs to the price paid by the US Department of Veterans Affairs (VA). On average, the VA pays less for drugs than other state agencies, due to special discounts and negotiations.

The proposition would apply to any program where the state is the ultimate payer for the drug, even if it does not purchase the drug directly. It would apply to programs such as Medicare and Medicaid, among others.

Increasing drug costs have been a worry to many Americans who are now finding it hard to afford their medications and pay other bills. Advocates for the bill and campaigns, such as Yes on 61, say that voting “yes” on the bill would lower drug costs for all of California.

US Senator Bernie Sanders (D-VT) and many other federal, state, and local officials have joined the campaign in support of the bill because they believe it would lower drug costs statewide.

However, an opposing campaign called No Prop 61 said approving the law would actually have the opposite effect and raise costs.

They refer to the law as a being “deceptive” and a “scheme,” that would harm patients and veterans, while increasing taxes for the general public. The campaign states that while the law would not apply to 88% of people, it would negatively impact all Californians through increased drug costs.

No on 61 also said that the VA would lose special discounts for veterans that could result in higher drug costs. Critics of the bill also state that Proposition 61 could invalidate current drug discount agreements, and could lead to reduced patient access.

Californians decided to not approve the law at this time, with a majority casting their vote against the bill. Approximately 4,676,151 (46.05%) of individuals voted in favor of the law, and 5,477,391 (53.95%) voted against the bill.

Other states have considered drug cost proposals during the last legislative session held over the summer. These proposals would require manufacturers to show how they priced their products, and how much money they spend on research and development, according to California Healthline.

Both New Jersey and Virginia will be renewing the consideration of transparency laws that did not secure passage. In California, state Assembly member David Chiu (D-San Francisco) is considering whether or not to create a new drug pricing bill next year.

While many Americans face sticker shock over the prices of drugs, it is in question whether President-elect Donald Trump will tackle this issue head on. Inaction could leave other states on their own when it comes to reducing drug costs.

With California’s recent defeat on Proposition 61, states may be hesitant to enact similar bills that advocate for lower prices and increased pricing transparency.