The Roosevelt Institution
by Peter Chang, fmeriwether@stanford.edu (not found in user database), and Anthony Ortega; Center on Health and Human Services; Roosevelt Institution at Stanford University
The United States is in intensive care. Citizens of other industrialized countries like Germany, France, Great Britain, and Japan have longer average lifespans, lower infant mortality rates, and more access to healthcare than Americans. The governments of these countries pay for healthcare, administer hospitals, or provide insurance for all their citizens. South Africa used to be America's only partner in letting citizens fend for themselves, but even South Africa began providing for its citizens' health when it did away with apartheid in the early 1990s.
Consumers in other countries rely on their governments to negotiate lower prescription drug prices, but Americans are denied an adequate safety net. Why doesn't our government fight harder for our health? The answer isn't lack of technology; the United States has always led the globe in medical advances, and California has consistently led the United States.
California has also taken measures to help its citizens cope with increasing drug prices through programs such as Medi-Cal. Despite these efforts, millions of Californians are not provided with prescription drug coverage, leading to overcrowded hospitals and premature deaths.
Some relief is on the horizon for California. Proposition 79, on the ballot this November, expands eligibility for discount drug prices through rebates negotiated with pharmaceutical companies. Prop. 79 offers discount savings of up to 50 percent on prescription drugs to individuals who qualify--a group that includes those who are not adequately covered by Medicare and people who spend at least five percent of their income on medical expenses precipitated by catastrophes.
Also on the ballot is Proposition 78, which at first glance closely resembles Prop. 79. But there's a key difference: only Prop. 79 would allow the state to refuse to contract with big name companies that don't offer rebates. Prop. 78 has no such provision, making participation completely voluntary for drug manufacturers. The voluntary approach has already failed California--under the voluntary Golden Bear State Pharmacy Program, only 14 of 500 manufacturers invited to participate in the program offered discounts.
Given the drug companies' reluctance to participate in rebate programs, it's not hard to guess which proposition they support. In one of the most expensive ballot campaigns in United States history, pharmaceutical giants like Merck, Pfizer, and GlaxoSmithKline have pledged over $80 million in support of Prop. 78.
Prop. 78 offers diminished drug discounts and no enforcement mechanism; and it restricts eligibility to about half those covered under Prop. 79. Tangibly, this means that if Prop. 78 is passed, five million Californians who desperately need prescription drugs will have to do without. Only Prop. 79 lets California bargain with the drug companies to provide the greatest number of Californians with the best prices for prescription drugs. If both propositions pass, whichever garners the most votes will go into effect, making this distinction an especially important one for the future of California.
And why shouldn't California be able to negotiate with drug companies? Our government, after all, is their biggest customer--$4.2 billion dollars of the drug companies' annual profits come from programs like Medi-Cal. Our government must exercise its bargaining power--something that every other first-world nation in the world has already learned. With the largest economy in the country, why shouldn't California lead the charge with Prop. 79?