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November 1, 2005 > A proposition primer III

A proposition primer III

Propositions 73, 74 and 75 were outlined in our October 18, 2005 issue and Propositions 76 and 77 on October 25th. In this issue, we will review the last three propositions, 78, 79 and 80. In the interests of brevity, some comments have been edited. Full discussion and comments can be found at with links to a variety of websites that fully discuss these propositions.

Proposition 78 & 79, if passed, provides for prescription drug discounts to Californians who qualify based on income-related standards, to be funded through rebates from participating drug manufacturers negotiated by California Department of Health Services. It prohibits new Medi-Cal contracts with manufacturers not providing the Medicaid best price to this program, except for drugs without therapeutic equivalent; Proposition 78 makes prescription drug profiteering unlawful. (Initiative Statue)

Background from Legislative Analyst:

This proposition creates a new state drug discount program to reduce the costs that certain residents of the state would pay for prescription drugs purchased at pharmacies. Under the new drug discount program, eligible persons could obtain a card that would qualify them for discounts on their drug purchases at pharmacies.

The program would be open to:
California residents in families with an income at or below 300 percent of the federal poverty level-up to almost $29,000 a year for an individual or about $58,000 for a family of four (Proposition 78).
California residents in families with an income at or below 400 percent of the federal poverty level (about $38,000 annually for an individual and $77,000 for a family of four) and persons in families with medical expenses at or above 5 percent of their family's income (Proposition 79).

Pro Argument:
Proposition 78 offers Californians struggling with high prescription drug costs real help, right now. Prop. 78 is a proven program that can take effect immediately, and will deliver critically needed prescription drug discounts to millions of seniors and low income, uninsured Californians.

Proposition 79 provides enforceable, not "voluntary," discounts by drug companies. Prop. 78 is completely voluntary for drug companies: they are free to choose whether or not to offer discounts. But California has tried a voluntary drug discount plan before. The pharmaceutical industry refused to participate so the program dissolved in 2001.

Con Argument:

Prop. 78 is a smokescreen designed and bankrolled with tens of millions of dollars from the prescription drug lobby to block Prop. 79, a real discount solution put forward by consumer, health, and senior groups.

Backed by public employee unions, Proposition 79 sets up another big government program that will cost California millions. With huge budget deficits that already affect funding for critical programs.

Proposition 80, if passed, subjects electric service providers to regulation by California Public Utilities Commission. Restricts electricity customers' ability to switch from private utilities to other providers. Requires all retail electric sellers to increase renewable energy resource procurement by 2010. (Initiative Statute)

Background from Legislative Analyst:

The measure addresses a number of aspects of the state's electricity market: the regulation of the ESPs (Electric Service Provider) and direct access, the procurement process, resource adequacy requirements, the renewables portfolio standard, and the use of time-differentiated electricity rates.

It provides critical reforms to make sure our deregulation nightmare never returns. It provides the stability necessary to ensure long-term investment in new, clean electricity supplies.

Reinventing California's energy system through the initiative process, without public hearings is too great a risk to take. Instead, this critical issue should be addressed carefully through public hearings that involve all affected parties, including the state Utility and Energy Commissions, consumer groups, and small business associations.

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