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Proposition 61 defeated to allay changes on drug pricing

Published on 11/11/16 at 09:05am

Another major piece of voting news emerged on 9 November, with Proposition 61 voted down by Californian residents, with the measure failing at 46% for and 54% against. Proposition 61 was introduced as a ballot measure to regulate prices of drug sales from drug makers. The measure would have forced the state to purchase drugs at the same price as that paid by the US Department of Veterans Affairs.

Federal law means that The Department of Veteran Affairs are allowed significant discounts on drugs, with a 24% discount on prescription drug prices. The agency is also able to negotiate lower prices and not have those prices disclosed.

With Proposition 61 looking to peg prices to these prices, those fighting against the proposition seized upon this as their major defence. The threat became, should the proposition be pushed through, it would result in a price hikes for The Department of Veteran Affairs. Major pharmaceutical companies poured money into the no campaign, with $109 million spent in the against campaign. This can be broken down to more than $9 million from Merck, Pfizer and Johnson & Johnson. The money spent meant that the measure became the most expensive ever in California.

The strong campaign for the No side to the measure eventually won enough voters to turn down the measure. It had looked, in earlier stages of the contest, that the momentum was with the Yes campaign. They had the backing of Bernie Sanders, who has, of late, spent time highlighting the drug price increases by major pharmaceutical companies.

Even with Bernie Sanders behind the measure, it failed at the eventual vote. Pharmaceutical companies will been relieved that the measure has failed. There has been widespread public anger over the Mylan Epi-Pen scandal, and further price increases have begun to come to light as more attention is paid to the issue. If Proposition 61 had passed, it would have been a clear indication that that public anger had spilled over into action that could hurt the way pharmaceutical companies operate. More than this, it would have opened the floodgates for other US states to attempt to pass similar measures. The pharmaceutical industry will be hoping that the failure of the measure serves to remove some of the momentum from any on-going discussions on pricing.

For an in-depth analysis of the growing debate on pharmaceutical drug pricing, read our latest feature on the issue.

Ben Hargreaves

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