California voters this November will have the opportunity to decide whether the state 
should control the cost of prescription drugs.
The ballot proposition would require the state to negotiate prices with drug companies that are no higher than what the U.S. Department of Veterans Affairs pays for medications.
Proponents of the initiative say it would affect about 5 million people whose health care is covered by the state. They include retired state workers, inmates and some low-income residents in the Medi-Cal insurance program.
The California proposition is one of a number of state initiatives triggered by the sharp rise in prescription prices in recent years.
The National Conference of State Legislatures reports that dozens of bills have been proposed in state legislature to address the cost of specialty drugs. The price increases have also triggered federal hearings and investigations by task forces.
Legislators in Virginia and New Jersey have proposed laws that would require manufacturers to report production costs of some high-priced drugs.
A bill in New Mexico would create a task force on pharmaceutical pricing, while a proposed law in Washington State would cap consumers’ out-of-pocket spending on prescription medications.
Among the catalysts for public outrage are the high price of treatments for diseases such as hepatitis C, for which one drug costs $1,000 per daily pill, or $84,000 for a 12-week course of treatment.
Martin Shkreli, then the CEO of Turing Pharmaceuticals AG, became the focus of public criticism when he boosted the price of the half-century old drug Daraprim from $13.50 to $750 per pill after the company purchased the drug from another manufacturer. (He was later arrested on unrelated charges of securities fraud and resigned from Turing, which recently said it may lower the price of Daraprim.)
“It’s a universal issue,” said Prof. Geoffrey Joyce, director of the Schaeffer Center for Health Policy & Economics at the University of Southern California. “How do we control these prices and at the same time not dampen incentives to innovate?”
According to AARP, the retail price for 98 specialty drugs widely used to treat chronic conditions rose dramatically between 2005 and 2013. The annual retail price per drug of a full course of therapy rose from $18,240 in 2005 to $53,384 in 2013.
The California ballot measure is sponsored by the Los Angeles-based AIDS Healthcare Foundation. “Everybody is angry about drug prices,” said Michael Weinstein, president of the group, which is proposing a similar initiative in Ohio.
The Pharmaceutical Research and Manufacturers of America (PhRMA) says the measure it is misleading and would “negatively impact millions” of Californians by causing drug prices to rise.
The pharmaceutical industry has contributed a total of nearly $39 million to defeat the proposition. Pfizer and Johnson & Johnson, among the biggest contributors, have donated almost $6 million each.
Proponents of the ballot measure have raised only $4 million, according to the Secretary of State’s office.
The California measure would exclude the vast majority of Medi-Cal beneficiaries, who are in managed care plans that negotiate their own prices. It also would not affect people on Medicare, with employer-sponsored coverage, or who those purchase private plans on the open market or through Covered California, the state’s insurance exchange.
California consumers in the private market already have some new protections from high out-of-pocket drug costs. Beginning this year, most people with plans through Covered California, the state insurance exchange, will not have to pay more than $250 a month per prescription. The exchange is the first in the nation to set caps on co-pays.
A California law that takes effect in 2017 provides similar limits on co-pays for other privately insured residents who take expensive drugs for cancer, epilepsy and other diseases.
