Anytime one side in a ballot initiative battle brings more than
$80 million to bear while its opponents can muster less than 5
percent of that amount, voters can safely bet on one assumption: It
if wins, the big-money side stands to make (or save) far more than
it’s spending.
Anytime one side in a ballot initiative battle brings more than $80 million to bear while its opponents can muster less than 5 percent of that amount, voters can safely bet on one assumption: It if wins, the big-money side stands to make (or save) far more than it’s spending.
So it was in 1998 when electric companies spent more than $90 million to beat Proposition 9, which would have rolled back an electricity deregulation plan that would bring disaster just two years later.
So it is again this year when pharmaceutical companies had amassed about $83 million by the middle of September (their final totals won’t be known until after next month’s special election, but the amount is growing fast) to pass Proposition 78 and defeat Proposition 79.
Voters can be excused if they are a tad confused about these two measures with similar numbers and similar ballot titles both saying something about discounted drugs.
The difference is really not all that complicated: One proposition would allow big pharmaceutical companies to set up a voluntary program providing discounts to low- and middle-income Californians, the other would make it mandatory and include millions more people.
TV commercials paid for by the war chest gathered by the drug industry lobby Pharmaceutical Research and Manufacturers of America, or PhRMA, sometimes referred to as Big Pharma, complain that Proposition 79 would set up a new government program.
What they don’t say is that their own voluntary plan would also start a new government program. The nonpartisan legislative analyst estimated the drug industry’s voluntary program would bear administrative costs ranging from the millions to the low 10s of million of dollars each year. The compulsory program of Proposition 79, sponsored by labor unions and consumer groups, would cost “in the low 10s of millions of dollars.”
There may be a difference here and there may not, but if there’s a difference, it wouldn’t be large by governmental standards.
But there is a large difference between the two plans: Under the Big Pharma plan in Proposition 78, state officials would negotiate voluntary discounts with drug companies and California families of four making up to 150 percent of the federal poverty level ($58,050 a year) would be eligible for the price reductions.
Given that Gov. Arnold Schwarzenegger asked those same drug companies more than a year ago to start a voluntary discount plan and not a single one responded, it’s hard to see how Proposition 78 assures any California voters of any price breaks on costly prescriptions.
By contrast, Proposition 79 would require the state to steer many thousands of Medi-Cal patients away from drugs produced by companies which resist taking part in a discount program. Dozens of big drug firms from Novartis to Bristol Myers Squibb to Sandoz and GlaxoSmithKline now sell to Medi-Cal patients, but drugs equivalent to theirs are often available from other firms.
In a word, if Proposition 79 wins, the drug companies funding today’s ad campaign stand to lose an unknown number of millions of dollars.
It was the same seven years ago when electric companies including Enron, Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric raised a big war chest against Proposition 9.
If they’d lost, the utilities would not have been able to sell off generating plants to outside companies like Mirant and Duke Power and the Williams Cos., and would not have pocketed well over $1 billion from those sales. If they’d lost, the outside generators would not have been able to manipulate the market and cheat California ratepayers out of at least $6 billion (the amount they have been forced to pay back, to date, with more likely to come).
If that’s not adequate warning to voters when they see one side vastly outspending the other in a ballot initiative battle, it’s hard to see what is.
And if the voters don’t heed the warning of history, they may be made to pay again – but this time without any prospect of refunds.
Tom Elias is author of the “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” in an updated third edition. E-mail him at
td*****@ao*.com
.
