Drug Industry Sues to Block Ballot Initiative

The pharmaceutical industry is suing to block a possible ballot initiative that would force manufacturers to lower prescription drug prices for many Californians.

The lawsuit asks Sacramento County Superior Court to prevent elections officials from counting and verifying petition signatures that were submitted Tuesday by a coalition of consumer groups and labor unions aligned with Democrats. The signatures must be certified to qualify the measure for the ballot in case Gov. Arnold Schwarzenegger calls a special election this year.

The lawsuit is the latest challenge in a months-long industry effort to derail the potential initiative and kill pending legislation that was proposed by Assembly Majority Leader Dario Frommer (D-Glendale), on which the initiative is based.

The industry has agreed to offer discounts to low- and moderate-income Californians, but says the Democratic approach will illegally penalize non-participating companies by making it harder for their drugs to be prescribed by the state’s Medi-Cal program.

But the lawsuit targets a much narrower part of the initiative: a segment that says the state “shall work with the California Chamber of Commerce and the California Labor Federation AFL-CIO” to set up a prescription drug purchasing program for small employers.

The lawsuit asserts that the segment violates the state Constitution, which says no initiative can be submitted to voters if it “names or identifies any private corporation to perform any function or have any power or duty.”

“It’s a clear-cut violation of the Constitution,” said Merrill Jacobs of Pharmaceutical Research and Manufacturers of America, the plaintiff. “This is the first of what we view as several legal problems.”

Anthony Wright, executive director of Health Access California, the Oakland nonprofit group that sponsored the initiative, said: “The drug companies are so scared of facing the voters that they’re going to try to use every legal loophole to try to prevent us from going before the voters.”

The industry first tried to get lawmakers to agree to a plan that it had negotiated with Schwarzenegger, but the Democrat-controlled Senate rejected it last month.

The industry has filed its own possible ballot initiative, which contains the deal it struck with Schwarzenegger. Its approach would offer one of the most extensive discounts in the country but would not cover as many people as the Democratic version would.

The lawsuit was filed April 18; a court hearing is scheduled Monday.