78 Discounts on prescription drugs. Initiative statute.

79 Prescription drug discounts. State-negotiated rebates. Initiative statute.

First of all, ValleyVue refuses to call either Proposition 78 or 79 “the right prescription for California.” It appears that in this election, one of these two propositions will prevail, or else they will both be defeated. However, they can’t both become law. From the California voter handbook, the opponents and supporters of both propositions agree on one thing—there must be some law to assist Californians in receiving affordable prescription drugs.

There are positives about both proposals. Both make the program available to people making money in an amount over the federal poverty level (78-300%, 79-400%). This is important considering the higher cost of living in California compared to other states. Both have low application fees (78-$15 per year, 79-$10 per year). Prop 79 calls for the drug discount program to assist labor and business. 79 also looks to link the program to Medi-Cal. Prop 79 allows for the drug discounts to families that make more money than the maximum, if their medical costs reach 5%.

On the other hand, there are some problems. Both proposals are subject to successful negotiations with drug companies. Those companies have shown a devotion to profit making, as have most companies traded publicly. Companies must show continued profits and revenue growth to shareholders to keep the value of the company high. Other than the considerable strength the state of California has in negotiating prices for millions of our population, pharmaceutical companies have little reason to lower prices.

That is where Prop 79 tries to establish a disincentive to profiteering by opening up companies to civil lawsuits. While this is somewhat reasonable to prevent profiteering through lawsuits, it could also result in an overall rise in the costs of drugs in California. Lawsuits intend to punish companies for wrongdoing. However, companies need to make profits as part of their nature. Therefore, when a drug company must pay for a civil judgement, it will put those costs into the price of its products. Meanwhile, all drug companies will either take insurance to guard against lawsuits, hire more legal assistance, or store up profit in reserves for future lawsuits, all of which result in a rise in cost for the consumer.

While the civil lawsuit clause could be a major flaw in 79, there is no doubt it would cover many more Californians than 78. Individuals can earn up to $9000 more and be eligible for 79, while they would not for 78. There are also more people excluded form the program in 78. For the higher number of people covered, ValleyVue says vote Yes on 79. However, it is so crucial to deal with the rising costs of pharmaceuticals, ValleyVue also recommends a Yes vote on 78. This is simply to ensure one of the proposals is approved. Keep your fingers crossed for 79, though.