Proposition 61 and Big Pharma

December 1, 2016

 

In a year dominated by debate centered around corporate greed and the role of money in political campaigns, citizens of the state of California found themselves confronting these issues on Nov. 8 in Proposition 61. This Proposition, also known as the California Drug Price Relief Act, was a referendum ballot initiative that would have, if enacted, forced all relevant state agencies to lower how much they could pay for prescription drugs. Though the people of California rejected the measure, it seems that the dynamic nature of the campaigns surrounding Prop 61, particularly its costliness, may be indicative of the role that campaign finance plays not just in big flashy presidential elections, but also in elections down to the state level.

 

Events of the last year and a half have brought the cost of pharmaceuticals to the forefront of national policy conversation. Exemplary of this heightened awareness of the power of the major pharmaceutical companies, known colloquially as “Big Pharma,” is the relatively recent controversy surrounding Martin Shkreli, CEO of Turing Pharmaceuticals, and his ratcheting up the price of Daraprim, a life-saving drug meant to protect against dangerous parasitic infections. Bernie Sanders, the self-proclaimed “democratic socialist” on the Democratic primary ticket this past year, took up the cause of railing against Shkreli and all big pharmaceutical companies which Sanders said, according to PBS Newshour, “[are] ripping us off every day.”

 

Though Sanders’ ranting may seem to some simple paranoia, it certainly could be argued that there is cause to believe drug prices have at the very least been starting to slip out of the grasp of ordinary Americans. According to the New York Times, organizations like CVS Caremark revealed that many drugmakers have increased their prices in the last year by double-digit percentages. Those kinds of price increases are likely to strike fear into the hearts of many people just trying to get by.

 

Given the current unrest surrounding prices of pharmaceuticals in the United States, and given the rate at which many brands appear to be increasing in price, it would make sense that one of the most contentious and highly funded contests would surround Prop 61. The actual language of the ballot initiative itself stipulates that each state agency and program, like the state’s CalPERS program for retired state employees, that purchases pharmaceuticals would only be allowed to purchase them at the lowest price paid for them by the state’s Department of Veterans Affairs.

 

Though the state VA gets discounts from pharmaceutical companies, it also, according to a study featured on Vox, only purchases a fraction of the available drug types, likely because some are deemed simply too expensive; therefore, the VA might get such low prices simply because it buys the cheapest drugs.

Regardless as to why the VA gets its drugs for cheap, proponents of the measure found reasons to push this initiative. The argument in favor was mainly focused on the social equity aspect of this ballot measure; supposedly, more people would be able to afford the drugs given that the drug companies went along with the price reductions by the state government.

 

The opposition, meanwhile, remained unconvinced. One argument the “No” side put forth was simple: what stops drug companies from raising prices on VA drugs, thus making the price limitations of all other departments rise with them? Additionally, the opponents of the ballot measure noted that the measure would, because of the vague language, potentially leave the government open to more red tape, more bureaucracy, and therefore less access on the part of citizens to these necessary drugs.

 

The noteworthy aspect of this conflict was not simply the subject of the ballot question, but also the extraordinary amount of resource that went into the race. Pharmaceutical companies alone poured over $109 million into the “No” campaign, while the “Yes” camp went on the offensive, targeting drug company CEOs on social media. The Prop 61 race was vaunted as the most expensive in the nation, and even though the polls showed in September that 50 percent of respondents supported the measure with on 16 percent opposing, the money chipped in by the pharmaceutical industry pushed the projected support to an even split, eventually going on to a victory.

 

While Prop 61 has been put to rest, the issues surrounding it, from pharmaceuticals to the role of money in politics, have all but gone away, and likely will not go away anytime soon. Until then, it is important to see that, even in state races, moneyed interests have their eye on public affairs, and will intervene where they can.  

 

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