UPDATED: With Prop 61's defeat, drug-pricing foes can forget state-level action

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California has been ground zero in the industry battle against state drug pricing laws, and by a safe margin Tuesday, pharma came out ahead on the contentious Prop 61. A majority of voters rejected the measure, allowing the industry to breathe a sigh of relief following an intense lobbying effort.

With 99% of the votes tallied as of Wednesday morning, voters who rejected the measure outnumbered those in favor by a margin of 53.8% to 46.2%. The difference is about 633,000 votes.

That a majority of voters turned down Prop 61 means efforts to regulate drug prices at the state level "become much more difficult," according to Evercore ISI Senior Political Strategist Terry Haines. "In a political context 61’s defeat is a black eye for Democratic progressive supporters of this kind of initiative," he told FiercePharma.

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If passed, Prop 61 would have required California to buy its prescription drugs at a price no higher than that charged by the U.S. Department of Veterans Affairs. Heading into Tuesday, one poll showed voters evenly divided on the issue, with 47% planning to vote in favor and 47% against.

It’s a relief for an industry reeling from more than a year of negative pricing attention following now-notorious hikes by Valeant Pharmaceuticals and Turing Pharmaceuticals. Many in the industry had feared that, if passed, the idea could garner momentum outside of the nation’s most populous state. 

That’s one reason why pharma deployed considerable capital to defeat a measure supported by frequent pharma critic and populist Sen. Bernie Sanders. In the weeks leading up to the vote, Sanders held rallies around the state and appeared in a half-hour film that creators say highlights pharma’s “greed.”

Pharma companies including Johnson & Johnson, Bristol-Myers Squibb, Novartis, Amgen and AbbVie contributed to the "No" campaign.

In the end, the proposition “could be the ballot measure with the most money spent on it ever in the nation's history,” according to Ballotpedia, with the “Yes” and “No” groups having raised nearly $126 million as of last week. The lion’s share of that spending was by the opposition group, which outraised the support group by six to one, according to the site.


Related: Three more states approve medical marijuana use


But public and political pricing attention won’t go away with just this vote, as drug costs made their way to the fore of election-year politics and that talk promises to continue. With Republican long-shot Donald Trump capturing the White House on Tuesday and Republicans holding Congress, many in pharma will now look to Washington, DC, to see how the federal government plans to tackle high drug costs.

Editor's note: This story was updated with comments from Evercore ISI Senior Political Strategist Terry Haines.

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