Mothers, Consumer Advocates Promote Proposition 61 To Stop Drug Price Gouging

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Consumer advocates and concerned parents gathered Monday in Santa Monica to condemn the drug industry’s well-heeled campaign against Proposition 61, a measure designed to stop drug price gouging.

The press conference was held in the wake of Friday’s announcement that Mylan will pay a $465 million penalty for overcharging Medicaid for its EpiPen injectable allergy treatment. The company raised the price for a pack of two EpiPens from about $100 in 2007 to more than $600 — a 500 percent increase.

Prop. 61 would require all prescription drugs purchased by the state of California to be priced at or below the price paid by the U.S. Department of Veterans Affairs, which pays the lowest price of any federal agency.

The VA currently pays $183 for a two-pack of EpiPens.

Consumer Watchdog, a Santa Monica-based organization, says the drug industry’s multimillion-dollar advertising blitz against the measure contains “false statements,” including a claim that passage of Prop. 61 will result in prescription fees going up.

“It’s either dinner on the table for the family or their medicine,” a veteran in one the ads says. “Well, they’re going to pick their family.”

Carmen Balber, Consumer Watchdog’s executive director, said that claim is unfounded.

“These ads are complete fabrications,” she said. “They claim veterans will have to choose between their medicine and food on the table, but that is an absolute falsehood.”

Balber said copays or prescription fees can’t go up under the initiative because veterans, depending on their status, pay copays as low as zero and no more than $9.

Irvine resident Kathleen Hallal, who appeared at Monday’s press conference, offered her own concerns about the issue.

“Because of my sons’ allergies I have to buy several EpiPens a year, but even with insurance they can cost a fortune,” Hallal said. “I’ve heard stories of mothers crying right there at the pharmacy because they have to leave empty-handed.”

Kathy Fairbanks, a spokeswoman for the No on 61 campaign, said the issue isn’t as clear-cut as supporters might think.

Passage of the measure, she said, would open a door of financial unknowns that could have negative repercussions for California veterans, patients and taxpayers.

“The independent, nonpartisan Legislative Analyst’s Office has called the measure highly uncertain,” she said. “Prop. 61 would set in motion a chain reaction which no one can predict at this time.”

Fairbanks noted, for example, that the price the VA pays for drugs is confidential.

“They want to protect that price because they want to maintain their lowest price status,” she said. “The Legislative Analyst’s Office tried to get that from the VA but they said no. They figure this will have to go to the courts to get sorted out, and that has implications. What happens to patients, drug costs and health care programs while the state is in this limbo period?”

The VA has warned if Prop. 61 passes it could increase VA drug costs by $3.8 billion a year.

Fairbanks said Prop. 61 could also have implications for the California Public Employees’ Retirement System.

“They are worried that their health care plan may not be in compliance with Prop. 61 and that they could get sued,” she said. “Then they would have to pay more money for administering the program.”

Four prominent HIV/AIDS/Hepatitis C groups — Project Inform, the San Francisco AIDS Foundation, AIDS Project Los Angeles and the Los Angeles LGBT Center — also have warned that drug prices could increase for HIV/AIDS patients and others.

Consumer Watchdog released a report Monday that details the massive profits drug companies are making from their products. Eight of the biggest No on 61 donors collectively contributed $43 million to the campaign, the report said, making up half of the $86 million that has been raised to defeat the measure.

Merck is a case in point. The company’s gross profits rose 38 percent, from $18 billion in 2007 to $25 billion in 2015, according to the report. Merck raised the price of 38 drugs last year and it hiked the price of its diabetes drug Januvia by 20.8 percent.

But the company maintains Prop. 61 is not a good thing.

“Regarding the Prop. 61 measure, Merck has serious concerns about this poorly written measure because of the negative impact it will have on Californians,” Merck spokeswoman Lainie Keller said.

Allergan’s revenue shot up even more dramatically. Its gross profits rose 950 percent, from $990 million in 2007 to $10.5 billion in 2015.


Paid for by Consumer Watchdog Campaign – Yes on 61, Major Funding by Yes on Prop 61, Californians for Lower Drug Prices, With Major Funding by AIDS Healthcare Foundation and California Nurses Association PAC

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