SACRAMENTO, Calif. – The soaring price of prescription drugs has led federal and state lawmakers to seek ways to ease the burden on uninsured residents. But in California, the land of direct democracy, drug companies and consumer groups are going straight to the voters with dueling initiatives in one of the costliest campaigns in U.S. history.
Both measures on California's Nov. 8 special election ballot would cover uninsured residents of all ages who are not eligible for Medicaid (search), the federal health program for the poor. But they differ on how many people would be eligible and whether drug companies would be forced to participate.
Proposition 79, backed by a coalition of consumer groups and unions, would offer prescription drug discounts to uninsured individuals and families making up to four times the federal poverty level — up to $37,000 for an individual and $75,000 for a family of four. It would discourage any companies that refuse to provide discounts from participating in the state's $4 billion Medicaid program, and would allow residents to sue drug companies for "illegal profiteering."
"Proposition 79 is the wrong proposition for the people of California," said Jan Faiks, vice president for government affairs at the Washington-based Pharmaceutical Research and Manufacturers Association of America. "We will spend as much as it takes to educate the voters. It is that important to us."
PhRMA has made good on that promise. Since June, the California Initiative Fund, an industry-controlled account, has collected more than $59 million, according to campaign finance reports released this past week, a figure that should rise significantly. Drug companies including Pfizer (search), Merck & Co. (search) and Glaxosmithkline (search) each made identical contributions of nearly $8.4 million to the fund.
By contrast, the pharmaceutical industry spent a total of $9.4 million to affect federal elections in 2004, according to the Washington-based Center for Responsive Politics.
At this pace, drug companies' spending will easily surpass the previous record for a state initiative campaign, of $66 million, spent by Indian tribes in 1998 to legalize casino gambling on tribal land in California.
"The amount they've collected is breathtaking, and it shows how scared they are and how much trouble they think they're in," said Anthony Wright of Health Access California, a consumer group backing Proposition 79. "Is this a David and Goliath fight? Yes. But there are lots of Davids out there who are suffering through high drug costs — and remember, David won."
The drug industry's alternative is Proposition 78, based on legislation supported last year by Arnold Schwarzenegger, who as governor has received over $377,000 in contributions from drug companies.
It would allow drug companies to voluntarily participate in a plan offering discounts to uninsured residents earning three times the federal poverty level — up to $28,000 for an individual and $56,000 for a family of four.
Many states, including California, have programs that provide drug discounts to senior citizens and the disabled, but only Hawaii, Maine and Michigan have programs that cover people of all ages. Arkansas, Maryland, Montana, New Mexico, Oklahoma and Rhode Island have recently passed laws creating low-cost drug programs for uninsured of all ages, but none have yet launched.
But as the nation's most populous state, California presents more of a threat to the drug companies' bottom line, and the idea of allowing people to sue over "illegal profiteering" has mobilized industry lobbyists like never before.
A statewide Field poll released last month showed voters favoring both initiatives, with 64 percent saying they support the industry initiative and 54 percent supporting the consumer measure.
That deeply concerns both sides. Under state law, voters can say yes or no to either or both of the initiatives — and if both pass the measure with the most votes becomes law.
Both sides have tried to negotiate a way out of this political war. The obstacle, both sides say, is that the propositions can't be removed from the ballot.
That means that even if a compromise were reached, it would have to be placed on the ballot as a third alternative to compete with the other two — a recipe for even more voter confusion.
State Sen. Deborah Ortiz co-sponsored the industry-backed bill last year. She said a legislative solution could have been reached that would have eliminated the need for an expensive ballot showdown, but "heavy handed" campaigning by opponents got in the way.
"What's really unfortunate is, all this aggressive opposition really had to do with politics, not policy," Ortiz said. "Shame on all of them."
Sofya Rubinshteyn, 58, who lives in San Francisco with her husband on a combined income of about $30,000 per year, cares less about politics than about getting help — and soon. She takes three separate medications to control her high blood pressure. Her husband, a diabetic, takes numerous drugs every day.
"We need whatever it takes to reduce the cost of medication — it's a necessity to survive, it's not just a luxury," Rubinshteyn said.