While many pharma watchers are closely focused on the headlining presidential race this election season, a vote coming in California poses a big risk to the industry.
Despised by drugmakers, the referendum is getting big-name backing from former presidential candidate Bernie Sanders, who blasted pharmas at a series of rallies this weekend.
California’s Proposition 61 would require that the state buy its prescription drugs at a price no higher than that charged by the U.S. Department of Veterans Affairs. That would be a big hit to pharma, because California is the nation's most populous state.
Even worse, the price-fighting tactic, if passed, could spread elsewhere. The industry has been spending big money to swing the vote in its favor. According to Ballotpedia, Prop 61 opponents have outraised those in favor by $87 million to $15 million. Pharma companies are among the top contributors to the "No on 61" group.
A frequent pharma critic, Sanders hit the campaign trail this weekend to support the measure, dubbed the California Drug Price Relief Act. In rallies in San Francisco and Los Angeles, Sanders blasted pharmaceutical companies and encouraged “yes” votes on Prop 61.
The industry is taking the threat seriously, with players such as Johnson & Johnson, Novartis, Amgen and AbbVie contributing to the "No" group, according to Ballotpedia. Still, support for the measure runs at about 69%, according to polls cited by the website.
Sanders said pharmaceutical companies are “a major health hazard to the American people” at one rally, according to the Bay City News, adding that the industry's political connections give it great pricing power. That sentiment doesn’t stray far from the influential senator’s past messages and actions.
Along with Rep. Elijah Cummings, Sanders last year rolled out the Prescription Drug Affordability Act of 2015, a bill intended to enable government negotiating power and require companies to disclose costs, profits and prices in other countries.
In the past year, Sanders has blasted individual price hikes from Mylan and Turing Pharmaceuticals as the drug pricing issue intensified. He also called on the feds to block the proposed Pfizer and Allergan merger.
California’s pricing fight comes in the context of a national discussion about rising prescription costs, sparked in part by now-notorious hikes a year ago by Turing and Valeant. Democratic presidential candidate Hillary Clinton has rolled out a slew of proposals to fight price hikes and rising costs, while Republican nominee Donald Trump has said he favors allowing Americans to buy in countries where drugs are cheaper.
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