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California Online Voter Guide

12th Edition, November 2005 Special Election

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Proposition 78: Prescription Drugs.  Discounts.  Initiative Statute. Failed


Establishes discount prescription drug program, overseen by the Department of Health Services.  Enables certain low- and moderate- income California residents to purchase prescription drugs at reduced prices.  Imposes $15 application fee, renewable annually.  Requires Department’s prompt determination of residents’ eligibility, based on listed qualifications.  Authorizes Department to contract with pharmacies to sell prescription drugs at agreed-upon discounts negotiated in advance, and to negotiate rebate agreements with drug manufacturers.  Permits outreach programs to increase public awareness.  Creates state fund for deposit of rebate payments from drug manufacturers.  Allows program to be terminated under specified conditions. 

Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments:  One-time and ongoing state costs, potentially in the millions to low tens of millions of dollars annually, for administration and outreach activities to implement the new drug discount program.  A significant share of these costs would probably be borne by the state General Fund.  A largely one-time state cost, potentially in the low tens of millions of dollars, to cover the funding gap between the time when drug rebates are collected by the state and when the state pays funds to pharmacies for drug discounts provided to consumers. 

Any such costs not covered through advance rebate payments from drug manufacturers would be borne by the state General Fund.  Unknown savings on state and county health program costs due to the availability of drug discounts. Full Text of Proposition (PDF)

Official Campaign Web Sites and Contact Information

Who Signed the Ballot Arguments

    Yes on Proposition 78:

    No on Proposition 78:

Follow the Money

Detailed information about all contributors for and against Prop. 78 is available through Cal-Access, the Secretary of State's campaign finance website. For the most recent contributions, select a committee and click "Late and  $5000+ Contributions Received".

Major contributors supporting Prop. 78 as of October 22 include Pharmaceutical Research and Manufacturers of America California Initiative Fund of Sacramento, Pfizer, Inc. of New York, NY, Johnson & Johnson of New Brunswick, NJ, Merck & Co. of Whitehouse Station, NJ, and Glaxosmithkline of Philadelphia, PA.

No major contributions opposing Prop. 78 have been made as of October 22.

News Stories about the Initiatives

CVF's News Stories section provides California voters with convenient access to news articles that give an overview of the potential impact of each initiative on the ballot.

For More Information, CVF Recommends...

The California Secretary of State publishes the Official Voter Information Guide with both a Quick Summary and Detailed Information about Proposition 78.

Other good nonpartisan resources include the League of Women Voters' brief Pro/Con Analysis and longer In-Depth Analysis, the McGeorge School of Law California Initiative Review, the Easy Voter Guide and HealthVote.

Around the Capitol's Election Track featuring up-to-date campaign contribution data.

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This page was first published on July 6, 2005 | Last updated on February 10, 2006
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