Deal on Cheaper Medicines Unravels

Times Staff Writer

Gov. Arnold Schwarzenegger’s carefully crafted deal with pharmaceutical companies to lower the cost of prescription drugs for 5 million Californians fell apart Wednesday night when it was rejected by a legislative panel.

Democrats on the Senate Health Committee discarded the proposal even though it had the backing of some significant advocates, including AARP and state Sen. Deborah Ortiz of Sacramento, the Democratic chairwoman of the panel.

But critics said the plan would have relied on drug companies to voluntarily discount prices for low-income people without penalizing firms that refused.


The defeat was the most significant legislative setback for the governor so far this year. It occurred as Schwarzenegger’s attempts to use the threat of a special election to influence the Democrat-controlled Legislature are also faltering.

“The governor put a lot of chits on this plan, and it didn’t get out of this first committee,” said Anthony Wright, executive director of Health Access California, an Oakland-based advocacy group that favors a competing, stronger drug proposal.

The complex political jockeying involved in the prescription drug fight makes it less likely that Sacramento will reach an agreement on a plan this year, even though Democrats and the governor are committed to the same basic concept of getting the pharmaceutical industry to offer discounts for lower-income Californians.

Under Schwarzenegger’s plan, drug companies promised to offer discounts of 40% or more for people earning up to three times the federal poverty level, or $58,050 for a family of four. The measure had the strong backing of the pharmaceutical industry, which is preparing a parallel initiative to be placed on the ballot if Schwarzenegger calls a special election later this year.

But many Democrats in the Legislature prefer a rival proposal that would cover families with even higher incomes and would have punished drug firms that did not participate. That measure is pending in the Assembly and in a ballot measure written by Health Access, but it would have to overcome a possible gubernatorial veto and guaranteed legal challenges from the industry before it could take effect.

Despite the support of Senate Republicans and Ortiz, Schwarzenegger’s proposal, SB 19, failed when all the other Democrats on the committee voted against it.


Ortiz blamed the defeat on opposition from organized labor, which has been fighting Schwarzenegger over his efforts to change the pension plans of public employees. The unions have also been trying to pressure the pharmaceutical industry into helping block a ballot initiative intended to make it harder for unions to use workers’ dues for political activities.

“There was a lot of pressure with the unions, and it had to do with the battle they’ve got with the governor,” Ortiz said. “We’ve lost the opportunity to serve 5 million Californians.”

Margita Thompson, Schwarzenegger’s spokeswoman, said the defeat was “another example of lawmakers putting politics before good public policy and the people of California suffering as a result.”

But Assembly Majority Leader Dario Frommer (D-Glendale), the author of the rival measure, attributed the defeat to a lack of public support for a plan “that’s written and backed” by the drug industry.

Industry representatives could not be reached for comment.

Art Pulaski, the head of California’s AFL-CIO, said, “This is just the latest loss for a governor who more and more people are seeing as just another loser Republican politician who breaks his promises and spends his time, when he decides to work, promoting the agenda of the special interests.”

There is still a possibility that some compromise could be reached in the Legislature. Ortiz still has time to rewrite the governor’s proposal, as she has suggested that she might do.

Many people following the peculiarly charged political dynamic in Sacramento this year believe that serious negotiations on this and other matters are more likely once it is clear whether there will be a special election.

Without such an election, proponents of Frommer’s alternative will have greater motivation to strike a deal with Schwarzenegger to avoid the vetoes he showered on Democratic proposals last year to encourage the importation of Canadian drugs and bulk purchasing by the state.

In addition, union interest may decrease if negotiations with the pharmaceutical industry are successful.

Also on Wednesday, the Senate Health Committee approved another Ortiz bill that would require pharmacists to fill prescriptions even if they find them morally objectionable. That proposal, SB 644, is intended to address the objections among some pharmacists to filling emergency contraception prescriptions.

Although such instances in California are few, the topic, like that of prescription drugs, has become enmeshed in a larger political fight, this time over abortion rights.