Big Pharma has already taken aim at a measure in California that would cap drug prices. Now, the industry is stepping up its fight, funding a big share of the $68.4 million opposition.
The California Drug Price Relief Act would only allow government health programs to ink contracts with drugmakers at prices that are the same or lower than those paid by the U.S. Department of Veterans Affairs, which usually gets steep discounts from manufacturers. But Big Pharma isn’t having it.
Companies such as Merck ($MRK), Pfizer ($PFE) and Johnson & Johnson ($JNJ) have chipped in about $6 million each to defeat the measure, according to state campaign finance data cited by Bloomberg. For reference’s sake, the AIDS Healthcare Foundation, which supports the initiative, raised $4.4 million.
All together, pharma and a few other opponents have socked $68.4 million into the fight, the news service says.
“It’s just a very crowded ballot this time around and California is a big state. So to educate voters, it’s expensive,” Kathy Fairbanks, a spokeswoman for the California coalition battling the measure, told the news outlet.
California spent more than $4.2 billion on drugs in fiscal 2015, according to the Bloomberg story, so it’s no surprise that the state is taking pharma to task over drug pricing. The ballot initiative recently gained support from vocal drug price critic and presidential hopeful Sen. Bernie Sanders.
“While Congress has failed to stand up to the greed of the pharmaceutical industry, the people of California can by supporting this ballot initiative,” Sanders said earlier this month during a California campaign stop.
Meanwhile, pharma is doing everything in its power to quash the initiative, which it sees as potentially sparking a national movement on pricing. Last year, J&J pitched in $5.86 million, Bristol-Myers Squibb ($BMY) gave $2.88 million and other companies including Pfizer, Eisai, Purdue Pharma and Daiichi Sankyo contributed to a fund that would defeat the measure.
Some analysts think that states’ efforts to curb drug pricing won’t pay off in the long run. The “current wave of state legislations” like the ballot measure in California pose “a very modest risk to pharma, if at all,” Bernstein analysts said in a report earlier this year.
The industry “is very much on the ball’’ fighting such initiatives, analysts point out. And many of the measures are not well financed or supported by groups with political clout. “We suspect any progress here would be delayed until after the current election cycle,” Bernstein analysts said.
- read the Bloomberg story
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