CA Prop 61: a complicated law and a whole bunch of paid analysis
October 15, 2016 8:25 PM Subscribe
I've a pretty good idea on my views on my CA ballot, but am having a hard time figuring out how to vote on Prop 61. Was curious of actually decent analysis of the potential effects.
Best answer: I've been pointing people to this analysis, from Project Inform, one of the main advocacy groups working on HIV and hep C drug pricing and access:
"Even if the initiative were to result in cost savings to the state, it is unclear whether or not lower prices would be realized for consumers. The initiative does not include any provisions that would lower the cost of prescription drugs for consumers who are increasingly having difficulty accessing treatment, both because employers and insurers are passing on more of the cost to employees and consumers, and because more restrictions to access are being placed on higher-cost drugs.
In addition, the initiative does not address the actual price of drugs. Instead, the measure focuses on the discounts contracting entities will achieve. Because contracting discounts affect how the pharmaceutical industry decides to price a drug at launch and how much to increase prices over time, this initiative could actually increase the price of drugs in a number of public programs, including ADAP, Medi-Cal, the VA, and California’s prison system.
The language of the initiative could also have the unintended consequence of not allowing the state to enter contracts with pharmaceutical companies if the state agency could not meet a reference price. Since Medi-Cal and other insurers are obligated by law to deliver medically necessary treatments, it is possible insurers could end up paying more for drugs for which they could not enter into voluntary rebate contracts."
I'm strongly opposed to the initiative, in part because of these sorts of unanswered questions, and in part because I have a deep and well-founded dislike and distrust of the AIDS Healthcare Foundation, which put Prop 61 (and 60) on the ballot (and exempted their own pharmacy programs from the requirements.)
posted by gingerbeer at 9:31 PM on October 15, 2016 [6 favorites]
"Even if the initiative were to result in cost savings to the state, it is unclear whether or not lower prices would be realized for consumers. The initiative does not include any provisions that would lower the cost of prescription drugs for consumers who are increasingly having difficulty accessing treatment, both because employers and insurers are passing on more of the cost to employees and consumers, and because more restrictions to access are being placed on higher-cost drugs.
In addition, the initiative does not address the actual price of drugs. Instead, the measure focuses on the discounts contracting entities will achieve. Because contracting discounts affect how the pharmaceutical industry decides to price a drug at launch and how much to increase prices over time, this initiative could actually increase the price of drugs in a number of public programs, including ADAP, Medi-Cal, the VA, and California’s prison system.
The language of the initiative could also have the unintended consequence of not allowing the state to enter contracts with pharmaceutical companies if the state agency could not meet a reference price. Since Medi-Cal and other insurers are obligated by law to deliver medically necessary treatments, it is possible insurers could end up paying more for drugs for which they could not enter into voluntary rebate contracts."
I'm strongly opposed to the initiative, in part because of these sorts of unanswered questions, and in part because I have a deep and well-founded dislike and distrust of the AIDS Healthcare Foundation, which put Prop 61 (and 60) on the ballot (and exempted their own pharmacy programs from the requirements.)
posted by gingerbeer at 9:31 PM on October 15, 2016 [6 favorites]
Best answer: Fwiw, Bernie is in favor of prop 61. I've not decided yet, but it's not a slam dunk either way for me at this point.
posted by persona au gratin at 12:15 AM on October 16, 2016 [2 favorites]
posted by persona au gratin at 12:15 AM on October 16, 2016 [2 favorites]
Best answer: One concern is that it might keep state employees (I count myself among them) from getting more expensive drugs. I don't know if the state market is big enough to force them to sell at a lower price.
posted by persona au gratin at 12:18 AM on October 16, 2016
posted by persona au gratin at 12:18 AM on October 16, 2016
This thread is closed to new comments.
In theory, bulk negotiating powers give public buyers the ability to keep prices low, but having it implemented partially on a state basis potentially sets up a standoff where pharma companies can sit on their hands while people in need of expensive drugs complain that they're being denied them, creating bad publicity for the state. There's more bargaining power within a universal system where the public entity has the clout to walk away from the table.
The PhRMA-backed No campaign has a discussion from CalPERS staff on its website that it spins as an endorsement of its position. It's not quite that, but the implication is that drug companies would simply refuse to accept the negotiated rate, and so those products -- costly cancer treatments and ones to manage chronic illness -- would be removed from the formulary for CalPERS plans. Again, it would be difficult for the state to come away with a victory from that negotiation because, to put it bleakly, come drug companies are willing to let people die and let the state take the blame.
posted by holgate at 9:25 PM on October 15, 2016 [1 favorite]