Schwarzenegger Drug Plan Bought and Paid For By Drug Companies, Leaves Most Californians Without Protection

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Consumer Group Vows To Propose Ballot Measure

The details of Governor Schwarzenegger’s drug proposal announced today will allow only those with incomes of up to 300% of the poverty level to participate in the program and give drug companies too much control over the size of drug discounts, according to the Foundation for Taxpayer and Consumer Rights (FTCR). FTCR criticized the governor’s plan announced last night in the State of the State address because the plan relies on voluntary discounts from drug companies and bars access for most consumers and all businesses.

“By limiting the program to only some of the uninsured and relying on hand-outs from drug companies, the Governor’s proposal misses an opportunity to harness California’s buying power to negotiate real prescription drug discounts. We have a voluntary drug discount program in place now, and it results in prices 60% higher than what Canadians pay for the same medications,” said Jerry Flanagan of FTCR. “Relying on the goodwill of drug companies is not a bulk purchasing plan, its naïve and will never get to the underlying need for the biggest possible purchasing pool capable of negotiating the best price.”

FTCR has drafted and intends to circulate a ballot initiative that guarantees every Californian and small business owner access to lower cost prescription drugs by requiring drug companies to negotiate discounts similar to programs in place in Canada and the U.S. Department of Veterans Affairs, which receive discounts of up to 60% and more off U.S. made prescription drugs. According to Kim Belshe of the Schwarzenegger Administration, the governor’s plan will receive discounts from drug companies of only 17-22%.

“If Governor Schwarzenegger calls a special election this November, Californians will have a special opportunity to vote for prescription drug bulk-purchasing,” said Jerry Flanagan of FTCR. “This is the only plan that will harness the purchasing power of all Californians and provide guaranteed discounts that meet or exceed those available in Canada.”

Governor Schwarzenegger has received $367,200 in contributions from drug companies to his various fundraising committees. No other U.S. elected official, except President Bush, has received more money from drug companies than Governor Schwarzenegger. Under pressure from the pharmaceutical industry, President Bush and Congress opposed bulk purchasing in the 2003 Medicare prescription drug law, which banned the 41 million-member Medicare program from negotiating volume discounts with pharmaceutical companies.

“A simple principle of the free market is: the bigger the buyer, the cheaper the product. So, why don’t all Californians get together and buy our prescription drugs in bulk and get a discount better than the 60% off that Canadians pay? There’s only one thing standing in the way: drug company money,” said Jamie Court, FTCR president. “Drug companies are some of the biggest contributors in Sacramento. But this session we need a prescription drug bulk purchasing plan that tells drug companies that we are capitalists. When 35 million Californians get together, we can get a better deal on our drugs than the Canadians.”

FTCR recently organized two chartered train trips to Canada to dramatize the savings potential for bulk purchasing of prescription drugs. The group is planning to introduce its own California-wide ballot initiative that will require drug companies to negotiate discounts and allow any individual or business owner to participate in the program. To read more about the Rx Express, visit:

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The Foundation for Taxpayer and Consumer Rights is the state’s leading nonpartisan and nonprofit consumer advocacy organization. For more information, visit us on the web at:

Consumer Watchdog
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