Life science executives fear San Diego’s competitive edge in the industry could be hurt if Proposition 79 passes.
Voters will see the drug discount proposal and its rival Proposition 78 on the ballot in a statewide special election Nov. 8.
Jim Greenwood, the president and chief executive officer of the Biotechnology Industry Organization, a national life sciences trade organization based in Washington, D.C., said Proposition 79 would suck the blood out of what has become one of San Diego’s key industries.
“People voting yes on 79 would be like voting for price controls on cars in Detroit,” Greenwood said.
“Price controls have almost killed the drug innovation industry in Germany,” he added.
Both propositions create a drug discount program, but 78, which the world’s largest drug companies have spent more than $80 million supporting, has no penalty for drug companies that don’t participate.
According to the California HealthCare Foundation, which operates under the University of California system, drug companies have made some of the largest contributions ever to a political campaign in California.
Whichever proposition gets more yes votes, wins, according to the secretary of state’s office.
The Pharmaceutical Research and Manufacturers of America, a trade organization representing many of these companies, filed a lawsuit challenging Proposition 79 earlier this year.
In Proposition 79, the companies that don’t participate get their drugs taken off the Medi-Cal preferred list. In turn, doctors have to fill out more paperwork to prescribe them, and may not be as likely to do so, critics say.
Inclusion in the Medi-Cal program earns drug companies more than $4 billion a year, according to the Institute of Governmental Studies at UC Berkeley.
Drug companies fear civil lawsuits that attack them for not lowering their drug prices for the uninsured could be rampant if Proposition 79 passes.
Randall Woods, the chief executive officer of San Diego-based biotech NovaCardia, takes the theory one step further. He says the threat is chilling and would sap motivation away from scientists.
“If people vote yes on 79, it basically takes our innovation away,” said Woods, whose company focuses on developing drugs to treat cardiovascular diseases. Woods previously spent more than 20 years working for Eli Lilly & Co., one of the world’s largest pharmaceutical companies.
Proposition 78 would provide a drug discount to Californians who earn up to three times the federal poverty level , about $28,000 for an individual and around $58,000 for a family of four.
Proposition 79 would allow a somewhat higher income maximum , $38,000 for individuals and $77,000 for family of four.
The proposal supported by drug companies would cover up to 5 million people, while Proposition 79, supported by labor organizations and health care advocacy groups, would cover 10 million residents.
Meg Reeve, who heads the campaign against Proposition 78 for Oakland-based Health Access, a nonprofit health care advocacy organization, said Proposition 79 would help the millions of Californians who don’t have prescription drug coverage.
“It’s the only proposition with a built-in mechanism to give twice as many Californians deeper discounts for prescription drugs,” Reeve said.
California’s uninsured rate is higher than the national average: While 17.6 percent of non-elderly adults are uninsured on the national average, California’s rate is 20.3 percent, according to the UCLA Center for Health Policy Research.
In addition to the drug companies, the California Chamber of Commerce supports Proposition 78. The organization has said it fears that 79 would lead to drug companies raising the prices on their drugs and that doctors might be less likely to prescribe necessary drugs, partly because of the extra paperwork.
University of California Center for Governmental Studies President Bob Stern said this month that a small percentage of Californians may decide the fate of Propositions 78 and 79 because of competing factors for voter turnout.
Some reports have suggested voters are upset about the money the state is spending to hold a special election, and organizations such as the California Nurses Association, the state’s largest nurses union, are campaigning for residents to boycott it by voting “no” on every proposition.
Then again, he said, an increasing number , more than 25 percent , of registered voters are now receiving permanent absentee ballots, which may lead to increased voting.