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California Online Voter Guide

12th Edition, November 2005 Special Election

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Proposition 79: Prescription Drug Discounts.  State-Negotiated Rebates.  Initiative Statute. Failed 


Provides for prescription drug discounts to Californians who qualify based on income-related standards, to be funded through rebates from participating drug manufacturers negotiated by California Department of Health Services.  Rebates must be deposited in State Treasury fund, used only to reimburse pharmacies for discounts and to offset administration costs.  At least 95% of rebates must go to fund discounts.  Prohibits new Medi-Cal contracts with manufacturers not providing the Medicaid best price to this program, except for drugs without therapeutic equivalent.  Establishes oversight board.  Makes prescription drug profiteering, as defined, unlawful. 

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 for a 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 makers would be borne by the state General Fund.  Unknown costs and savings as a result of provisions linking drug prices for the new drug discount program to Medi-Cal prices, including the potential effect on the state’s receipt of supplemental rebates; unknown savings on state and county health program costs due to the availability of drug discounts; and unknown costs and offsetting revenues from the anti-profiteering provisions. Full Text of Proposition (PDF)

Official Campaign Web Sites and Contact Information

Who Signed the Ballot Arguments

    Yes on Proposition 79:

    No on Proposition 79:

Follow the Money

Detailed information about all contributors for and against Prop. 79 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. 79 as of October 22 include the Alliance for a Better California of Sacramento, California State Employees Association Issues PAC of Sacramento, California Teachers Association/Issues PAC of Burlingame, and the California Correctional Peace Officers Association Independent Expenditure Committee of Sacramento.

The major contributor opposing Prop. 79 as of October 22 is the Pharmaceutical Research and Manufacturers of America California Initiative Fund of Sacramento.

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 79.

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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