Landmark Law Allowing California to Negotiate Discounted Drugs May Be Defunded Before It Gets Started

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

The Senate budget subcommittee that oversees the state's health budget voted to eliminate funding that would have implemented the California Discount Prescription Drug Program. By eliminating the $5.8 million in funding for this program, the work that state officials have done the past two years in negotiating lower rates will go to waste.

As many may recall, health advocates went through a bruising battle against Big PhRMA in 2005 ($80 million spent against us) on the ballot, and then won a year later when Gov. Arnold Schwarzenegger signed the bill and even had a fancy signing ceremony in the Capitol Rotunda.

The discount drug program would have allowed the state to negotiate discounted drug prices from pharmaceutical company, helping approximately 5.4 million uninsured families -- the people who now pay FULL PRICE for prescription drugs -- buy drugs at fairer prices. If drug companies did not give satisfactory discounts, then the state could have used the purchasing power of Medi-Cal to leverage lower prices.

Californians below 300% of poverty ($63,600 for a family of four) would have been able to buy drugs at 40-60% off the sticker price. While that's still more than many of us pay for our drugs (insured Californians often pay a fixed co-pay), it's still a lot less than what they pay without the program.

So that means middle-income and low-income Californians, who are already seeing the substantial reductions in their health benefits through public programs for their children, and schools, will now have to pay more for drugs.

Hanh Kim Quach is the Health Care Policy Coordinator for Health Access California. Before joining the organization, she worked as a journalist for nearly 9 years covering issues in California. Health Access California is a statewide health care consumer advocacy coalition of over 200 groups. This article has also been published on the Health Access Weblog.

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