Governor Wields Heavy Veto Pen

Gov. Arnold Schwarzenegger on Thursday rejected Democratic legislation to bring cheaper Canadian prescription drugs into California, even as he admitted having had little success in persuading pharmaceutical companies to cut prices.

“While I am encouraged by the concrete commitments made by some members of the industry, I am disappointed that many companies have not yet stepped up and offered meaningful discounts for this population,” Schwarzenegger said.

The actions came as the governor finished work on the last of 1,270 bills the Legislature approved this year. Including the frenzied last day, the governor vetoed nearly 25% of them. That was a greater percentage of bills vetoed than in all but one year since 1967, according to an analysis by state Senate staffers.

Thursday’s legislative casualties included Democratic measures designed to stop car dealers from overcharging on loans and to give journalists more access to California’s troubled prisons. Also rejected were a number of recommendations to curb wildfires that had been suggested by his own blue-ribbon commission after last year’s blazes in Southern California.

With the bill signings over, Democrats said they would emphasize their differences with Schwarzenegger in the fall election campaigns, when all 80 Assembly seats and 20 Senate seats are up for grabs.

“Voters are beginning to see what a Schwarzenegger Republican is, and that’s a California version of George W. Bush on economic issues,” said Steve Maviglio, spokesman for Assembly Democrats. “And I don’t think that’s going to go over too well.”

The drug bills Schwarzenegger rejected would have created state websites directing Californians to Canadian drugstores and would have authorized the state to include Canada when price-shopping for drugs for existing healthcare programs for the poor and elderly.

Schwarzenegger said those measures would have broken federal laws and made the state vulnerable to lawsuits if anyone got ill from imported drugs -- contentions that Democratic lawmakers said were not true.

Instead, the Schwarzenegger administration has drafted a plan to give about 4.5 million poor Californians a break on prescription drug costs with a discount card that would cost $10 a year.

The state wants to negotiate lower costs for its “California Rx” program through bulk purchases and rebates from drug makers. The program, which aides insist would be the most aggressive in the country, would be open to anyone earning no more than three times the federal poverty level, or about $47,000 a year for a family of three.

Schwarzenegger warned the industry that he would work out a compulsory plan with the Legislature next year if he could not reach a deal with drug companies by mid-November.

The legislative analyst’s office, which has studied the governor’s draft proposal, questioned the size of discounts that could be achieved, given the track record of other states. A comparable program in Iowa, for example, was declared a failure after only three of the 20 major U.S. drug companies cooperated, the report said.

Consumer activists said they doubted that California would do much better.

“My sense is that if we don’t have a stick, they’re going to gobble up our carrot and walk away,” said Gary Passmore, an official with the Congress of California Seniors.

Democrats and consumer activists assailed Schwarzenegger’s vetoes, saying the measures could have quickly begun to alleviate high drug prices. They complained that the governor was beholden to the pharmaceutical companies, which have given him $337,200, according to the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer activist group.

“This is the governor who ran on a populist message that he would change the relationship with special interests, and nothing has changed,” said Sen. Deborah Ortiz (D-Sacramento), who wrote one of the vetoed bills, SB 1149, that would have set up a state website with links to Canadian pharmacies.

Schwarzenegger did sign two measures concerning the drug industry. One, SB 1765, seeks to limit the industry’s practice of giving gifts and incentives to doctors to get them to prescribe their drugs. Another, AB 1959, allows the Legislature to collect more information from state agencies about how much drug companies are charging.

Democrats also castigated Schwarzenegger for vetoing Thursday the last of five bills designed to discourage companies from moving California jobs overseas. AB 2715 would have required telemarketers and customer service representatives to disclose their location when asked by a California resident. AB 3021 would have required employers with more than 250 workers to tell the state how many people they employed domestically and abroad.

Allan Zaremberg, president of the California Chamber of Commerce, said: “By rejecting all 10 job-killer bills that made it to his desk, Gov. Schwarzenegger followed through on his campaign promise to stimulate California’s jobs climate and reinvigorate our economy.”

The governor appeased another of his strongest supporters, the state’s car dealers, by rejecting a measure that was intended by sponsors to protect car buyers from being ripped off. The bill would have limited the financing charges dealers could set for loans and forced them to reveal credit scores used to set those rates, which consumer activists said dealerships had been caught lying about.

Schwarzenegger and the car dealers lobby said they were willing to work with lawmakers next year to craft a more acceptable version.

“We appreciate the governor’s ability to look beyond the exaggerated claims of consumer benefit for this bill and recognize it for the lemon it is,” said Peter Welch, president of the California Motor Car Dealers Assn., whose members have given the governor hundreds of thousands of dollars in the last year.

During the feverish last day of action on legislation, Schwarzenegger signed a number of measures, including ones that:

* Require cities and counties to consult with Indian tribes about places of special social or historical significance before amending their general plans (SB 18).

* Make anybody who injures a bystander while illegally using pesticides liable for medical treatment costs (SB 391).

* Protect from disclosure in state applications the addresses and other personal information of people who volunteer or work at abortion clinics (SB 1590).

But Thursday’s those approvals were outnumbered by vetoes. Despite campaign vows to bring openness to state government, Schwarzenegger vetoed a bill, SB 1164, that would have permitted journalists to interview inmates freely inside prison walls.

He vetoed another bill, SB 1676, that would have required state prisons to place on their websites information about lockdowns, during which inmates are confined to their cells and denied most privileges.

Times staff writers Marc Lifsher and Jenifer Warren contributed to this report.