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A collaboration between Capital Public Radio, KQED, KPCC and KPBS to cover the 2016 elections in California.

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Prop. 61, The Drug Pricing Initiative, Explained

Rebecca Plevin | KPCC

One of the 17 statewide propositions facing California voters on the November ballot is Proposition 61, which is intended to lower prescription drug prices.

Below, Impatient breaks down this initiative, which besides being one of the most complicated ballot measures, has sparked by far this year's most expensive campaign fight over an initiative.

In a nutshell

Under Prop. 61, certain state agencies would pay no more than what the Department of Veterans Affairs pays for prescription drugs.

Conventional wisdom is that the VA gets steep discounts on drugs; the AIDS Healthcare Foundation, which wrote the measure, says this proposition would provide people with better access to life-saving drugs and save taxpayers a lot of money by lowering what the state pays for drugs.

The measure would apply to programs in which the state is the ultimate payer for a drug, including Medi-Cal fee-for-service plans and CalPERS, which provides health benefits to current and retired state employees. (It would not cover Medi-Cal managed care plans.) Adding in prison inmates and people receiving AIDS medications from the government, the initiative would affect drug prices for programs serving some 5 million people, according to its proponents.


Vermont senator and 2016 presidential candidate Bernie Sanders has thrown his support behind Prop. 61, as have former U.S. Secretary of Labor Robert Reich and civil rights activists Dolores Huerta and Rev. Al Sharpton.

Nearly a dozen local Democratic partiy chapters, the California chapter of the American Association of Retired Persons and the California Nurses Association also support the measure.

Here's one of Yes on 61's video ads:

As of Sept. 18, proposition supporters had raised a little under $10 million, according to the California Secretary of State.


The pharmaceutical industry has so far poured more than $86 million into fighting Prop. 61, according to the Secretary of State's office. The industry argues that the initiative would increase drug prices for veterans and the state, reduce patients' access to medication and increase bureaucracy.

A number of medical organizations, including the California Medical Association, the California Psychiatric Association and the Lupus Foundation of Southern California, and veterans groups, including the state chapters of the American Legion and the Veterans of Foreign Wars, also oppose the measure.

Here's an ad from No Prop 61, featuring a VFW member named Mike King:

A number of local chambers of commerce and unions are also opposed.

Would it work?

In short: This issue is extremely complicated, so nobody knows for sure.

Neeraj Sood, a professor of public policy at the University of Southern California, says the initiative could lower drug prices, but he says he's not certain – for several reasons.

"I don't know what the prices paid by the VA and California state agencies are," Sood says. "No one knows that because the prices are confidential."

While he believes the VA gets discounts on drugs, Sood explains that he can't know for sure because the agency keeps some of its contracts confidential. Since there's no price baseline, he says, it's impossible to know whether Prop. 61 would save the state money.

On top of that, he says, it's unknown how drug companies would react to this measure.

Other experts have told KPCC that if voters approve the measure, drug manufacturers would increase the prices they charge the VA to avoid giving big discounts to state agencies.

Meanwhile, the state's nonpartisan Legislative Analyst’s Office has essentially said it can't fully analyze the measure's impact, since both the VA and the state have some confidential drug contracts.

The LAO says the proposition could save the state money – or it could have a negligible impact. But, again, it can't say for sure, because there could be several bureaucratic challenges to implementing the measure, and it doesn't know how drug makers would respond to it.