by Tom Condit; this article was originally published in Partisan issue no. 21, printed September 2005.

Proposition 79 is a proposal from labor and consumer groups to start a discount program for prescription drugs in California. It would cover several million people and has provisions which would give the state leverage in persuading drug companies to give discounts. It also allows the state attorney general to sue drug companies for profiteering.

Proposition 78 was put on the ballot by the big drug companies, who have pledged tens of millions of dollars to pass it. It's only on the ballot to knock out Proposition 79. If it gets more votes than Proposition 79, it knocks out every single provision of Prop 79 (not just conflicting ones). If it creates enough confusion that neither proposition passes, that's okay with Big Pharma, too.

Proposition 78 would cost just as much in tax dollars as Proposition 79. The benefit would go to big drug companies instead of consumers.

How they'd work

Prop 79 sets up a new drug discount program which would be linked to Medi-Cal to obtain rebates on drugs from manufacturers. The state has a system for obtaining lower drug prices for people enrolled in Medicare by speeding up approval of prescriptions. This would extend that system to let the state negotiate lower rates with pharmacies and manufacturers.

Proposition 78 would have only voluntary participation by drug companies, with no state leverage to obtain lower prices.

Who's covered

Proposition 79 would cover several million individuals and families with incomes below 400% of the federal poverty level or with medical expenses of more than 5% of their income. They'd pay $10 per year to enroll in the program.

Prop 78 would only cover people with incomes below 300% of the federal poverty level. It doesn't cover people with high medical expenses at all. It also specifically excludes people who had other drug plans, even if those plans were no good. It would cost $15 per year.

Employer health plans

Prop 78 allows the state program to be used in negotiating discounts on behalf of employer-sponsored and industry health plans. The state would only help plans where the employer paid over 50% of the plan costs. This would encourage employee health coverage.

Prop 79 would knock that out.


Prop 79 creates a nine-member Prescription Drug Advisory Board to monitor drug prices and availability and issue regular reports.

The big drug companies are terrified of having the light shine on their business practices. Prop 78 would knock out that provision.

Drug profiteering

Prop 79 makes it a civil violation if a drug maker "demands an unconscionable price," "exacts or demands prices or terms that led to any unjust or unreasonable profit," "discriminates unreasonably against any person," or "intentionally prevents ... or restricts the sale or distribution of prescription drugs in this State in retaliation for the provisions of this chapter." The attorney general is given power to sue on behalf of the people.

With their profits running at three times the average of other corporations in the U.S., the big pharma companies fear attacks on price gouging more than anything else. Prop 78 would knock out this provision.

A "no-brainer"

This one's a "no-brainer." You can vote to regulate the drug companies and get lower drug prices for millions of people. That's a "Yes" vote on Prop 79 and a "No" vote on Prop 78.

Or, you can trust the drug companies to take care of you.

Looking forward

Proposition 79 will save some people's lives and make the lives of others easier. It's still just a stopgap.

We need to move away from a system where we're arguing about which group of people should get which benefit, and toward one where everyone's health needs are met equally. Instead of bureaucracies built to determine who's eligible for this or that, we need to commit ourselves as a society to keeping everyone as healthy as possible. Health care should be treated as a human need, not a profit opportunity.

We need one universal system of health care for all. It's cheaper than supporting bloated corporate bureaucracies and profits, it's more equitable, and it's easier to administer. Proposition 79 will give us some of the tools to incorporate into such a system, but it's not a substitute for one.

Tom Condit was the Peace and Freedom Party candidate for Insurance Commissioner in 1990 and 1994.

2004 total pay for drug co. executives making over $11 million a year

Henry A. McKinnell Chairman and CEO Pfizer Inc. $28,925,241
John C. Martin President and CEO Gilead Sciences $18,223,931
Henri A. Termeer CEO Genzyme Corp. $17,154,464
Sidney Taurel Chairman, President and CEO Lilly (Eli) & Co. $15,511,784
David M. Mott Vice Chairman, President and CEO MedImmune Inc. $15,330,493
Robert Essner Chairman, President and CEO Wyeth $11,764,945
Miles D. White Chairman and CEO Abbott Labs $11,298,642
Kevin W. Sharer Chairman, CEO and President Amgen $11,031,845
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