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CA: Prescription drug measures already facing off (Prop 78 and Prop 79)
Contra Costa Times ^ | Sep. 25, 2005 | David L. Beck

Posted on 09/30/2005 4:10:47 PM PDT by calcowgirl

It's not even October yet, and already the barrage of advertising for two competing drug discount measures on the Nov. 8 ballot has begun.

In a widely screened television commercial, a white-haired "Marcus Welby" hands out pieces of paper -- presumably prescriptions approved for a discount -- with a kindly smile. This is supposed to be life under Proposition 78, a drug discount plan backed by the pharmaceutical industry and endorsed Friday by Gov. Arnold Schwarzenegger.

Cut to: Snarling bureaucrat stamping REJECT on prescription-size pieces of paper. This, according to the same ad, would be life under Proposition 79, a competing drug discount plan backed by Alliance for a Better California, a coalition that leans heavily on teachers' and other public-sector unions.

Meanwhile, backers of Prop. 79, who are strongly opposed to 78, kicked off their campaign in Sacramento this week with speeches and accusations.

"Why do the drug companies need the voters' approval to voluntarily lower their prices?" said Consumers Union Western media director Michael McCauley in an interview this week, laying out one of the key themes of the anti-78 campaign. "The only reason this is on the ballot is to confuse voters."

The initiatives both propose creating programs to offer substantial discounts on medications to those who qualify. In both, manufacturers will cut their prices, but under Prop. 78, they participate voluntarily, while under 79, companies that don't participate will be excluded from Medi-Cal, which covers the very poor. The two propositions also differ in what it takes for a patient to qualify, so estimates of who would benefit range from 5 million to 10 million people.

Only one of the initiatives can win in November. Both could, of course, lose. But if both pass -- that is, get more than 50 percent "yes" votes -- the one with the most "yes" votes becomes law.

The battle comes at a confusing time for consumers, especially older ones. California recently sued 39 drug manufacturers over the prices they charge the Medi-Cal system. And starting in mid-November, Medicare recipients -- seniors 65 and older and the disabled -- can sign up for the complex federal drug-discount plan that takes effect Jan. 1.

The 78 vs. 79 race looks to be the most expensive in the history of ballot initiatives, with most of the money on the 78 side, where the campaign chest has already passed $70 million, compared to about $16 million for Prop. 79.

"Even if we had X million dollars in the bank right now," said Prop. 79 spokesman Anthony Wright, "we wouldn't be spending it ... for an election several months away. We know we will be outspent. We know we will be outspent exponentially."

Both proposals would establish discount programs overseen by the state Department of Health Services and whichever private vendor it chooses to run the program. Neither involves massive drug purchases by the state. The Legislative Analyst's Office estimates start-up and administrative costs in "low tens of millions of dollars annually" -- "chump change" in health care, according to one analyst. Both require an annual fee -- $15 for Prop. 78, $10 for Prop. 79.

There are significant differences, however.

Prop. 79 sets the coverage threshold at four times the federal poverty level, or about $77,000 in annual income for a family of four. It extends coverage to those with high medical expenses as well, and authorizes the state to get discounts for those who have some insurance at work or through a union.

The industry version, Prop. 78, puts the threshold at three times the federal poverty level, or about $58,000 for a family of four, and omits the other categories of possible users. Wright says it would cover only about half as many people.

"To the casual observer, it's hard to sort out who's on the consumer side," said Larry Levitt, a vice president of the Kaiser Family Foundation. "Because it sounds like everyone's on the consumer side."

The Prop. 78 forces say the Medi-Cal link in Prop. 79 won't work because it requires federal approval, and the feds "have never, ever, ever approved a program like Proposition 79," according to Jan Faiks, vice president for governmental affairs and law for the Pharmaceutical Research and Manufacturers of America.

Prop. 79 forces say flatly that without the Medi-Cal link, the drug companies won't participate. "And if they start to, the discounts will go down as soon as the political pressure does," said Wright, who is executive director of Health Access, an advocacy group.

"Proposition 78 ...has a poison pill clause that the program will end if the drug companies don't participate," said Wright. "And they won't."

To which Faiks replied, in essence: Trust us.

Drug makers have had "charitable programs" since the 1950s, she said. In several states, including California, those programs have been coordinated and put online. (See rxhelpforca.org.)

In California, Faiks said, the terms of Prop. 78 were worked out between the industry and the Department of Health Services, to obtain a discount rate of at least 25 percent ("but we're hoping for 40 percent"). And the state would be able to bring fraud charges if a company were to certify a price that was not its lowest. That's "a huge hammer," said Faiks.

The Kaiser Foundation's Levitt called the face-off "a fairly classic battle between using the power of government to help people with a problem vs. encouraging the marketplace. It's an ideological battle we see all the time in health care."

So who's right?

"We don't take a position on issues," said Levitt, but: "It's fair to say that Proposition 79 has a much higher chance of yielding discounts for consumers than Proposition 78 does. There's not a lot that Proposition 78 does that goes beyond what's happening now."

Levitt noted that public opinion about the drug companies could provide a counterweight to their advertising money. Although drugs represent only about one health care dollar in 10, the pharmaceutical industry is "everybody's favorite bogeyman when it comes to health care costs," said Levitt.

"Drugs are much more of a retail transaction than other parts of the health care system," he said. "So it's a very visible target."


TOPICS: Government; News/Current Events; Politics/Elections; US: California
KEYWORDS: cagop; calinitiatives; prescriptiondrugs; prop78; prop79; socializedmedicine; sundheim; votehellno
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To: FairOpinion
I just explained it in my previous post.

But you didn't answer my question, did you?
["Can you please provide support for this comment?" (that "Proposition 79 will pass")]

Do you actually read my posts?

Yes. I read all of them that you directed to me, and the others. Nowhere did you provide support for your contention that "Proposition 79 will pass".

I understand you other arguments, but that is not what I asked. Are you now retracting your contention?

41 posted on 10/01/2005 3:18:50 PM PDT by calcowgirl
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To: inquest

The problem is the uncertainty.

As I said, if I knew that Prop 79 will fail for sure, than I would be happy to see 78 defeated as well. But there are so many people in CA wanting handouts, including the well off retired people, that I am very concerned about 79 passing. But voting against both with blindfolds, without considering the implication is very dangerous.


42 posted on 10/01/2005 3:21:13 PM PDT by FairOpinion
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To: calcowgirl

Let me repeat? Did you read my earlier post? You clearly didn't. In that one I said:

"I have seen some early polls, which said 79 had a lot of support. "


43 posted on 10/01/2005 3:23:35 PM PDT by FairOpinion
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To: FairOpinion
The problem is the uncertainty.

But you also might want to look at the probabilities. Just as you don't want 79 to pass, I could only presume that you would consider it a waste for 78 to pass if in fact the voters of California truly disapproved of it. And if 79 fails, and 78 passes by a small margin, it would be almost certain that it was imposed on them through blackmail, not approved by them through persuasion. Think not only of 78 itself, but also of the precedent and implications it would have in the future for stampeding voters into approving things that they're actually opposed to.

So like I said, look at the probabilities. What are the actual chances of 79 passing? Looking at the numbers you provided, it appears that the chances are quite small. The chances of 78 passing, if conservatives push through with this strategy, are considerably higher.

44 posted on 10/01/2005 3:30:45 PM PDT by inquest (FTAA delenda est)
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To: inquest
Sorry, that last sentence should have read, "The chances of 78 passing against the will of the voters,..."
45 posted on 10/01/2005 3:34:59 PM PDT by inquest (FTAA delenda est)
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To: inquest

Well, those same polls also predict defeat for all of Arnold's other propositions, and I hope that won't be true.

As at other times, it will all depend on the turnout.


46 posted on 10/01/2005 3:35:42 PM PDT by FairOpinion
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To: inquest

According to this, we might as well not bother to vote -- but I will.

I hope these polls are more propaganda than reality, that's why we have to be cautious about whatever they may indicate.

47 posted on 10/01/2005 3:39:46 PM PDT by FairOpinion
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To: FairOpinion
It would be the first time to my knowledge that one of these propaganda organs lowballed a number on something that they were in favor of. For one thing, there's only so much manipualation they could do without outright lying. In order to get the numbers they favor on those other initiatives, they'd have to go for the right target sample - that is, leftists. But if that's what they're doing, then the overall numbers for 79 are going to be even lower than what they've reported.
48 posted on 10/01/2005 3:49:43 PM PDT by inquest (FTAA delenda est)
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To: FairOpinion
Yes, I read all your posts.

You first said: "As I said repeatedly, 79 will pass."

You now say: "I have seen some early polls, which said 79 had a lot of support. "

If that is all the support you have, I have what I need. Thank you.

49 posted on 10/01/2005 4:15:39 PM PDT by calcowgirl
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To: calcowgirl

OK, so why don't you start posting by the same standards you expect of me: please provide links and multiple substantiations for each one of your statements every time you make them.

As they say, what's sauce for the goose, it's sauce for the gander.


50 posted on 10/01/2005 4:19:39 PM PDT by FairOpinion
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To: calcowgirl
God you're good.

We're already two NO's on both #78 and #79.

51 posted on 10/01/2005 4:34:25 PM PDT by Czar (StillFedUptotheTeeth@Washington)
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To: calcowgirl
Can someone tell me why the Republican Party is actively promoting Prop 78?

The more precise question is "Tell me why the California Republican Party is actively promoting Prop 78?

In spite of the CAGOP's explanation (see reply #27) the motive appears to be that the present administration wants to institutionalize more oversight and control of the pharmaceutical industry.

Greater oversight and control, a fundamental necessity for government, has historically led to higher tax revenues, especially attractive to a cash starved state, with the added bonus of coercing larger political contributions from industry PACs to the CAGOP.

From my perspective black is still black, white is still white, the Pacific Ocean still contains sea water and a NO vote is still a vote of disapproval, regardless of who is sponsoring the scheme to expand the power of government or its taxing authority.

52 posted on 10/01/2005 5:19:49 PM PDT by Amerigomag
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To: FairOpinion
OK, so why don't you start posting by the same standards you expect of me: please provide links and multiple substantiations for each one of your statements every time you make them.

Perhaps because she already had after heleny had already provided you similar factual information.

53 posted on 10/01/2005 6:23:38 PM PDT by Carry_Okie (There are people in power who are REALLY stupid.)
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