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Big Pharma Fights Proposed California Price Caps

Big Pharma Fights Proposed California Price Caps

By: Sarah Massey, M.Sc.

Posted on: in News | Pharmaceutical Marketing News

Pharmaceutical industry giants – including Pfizer and Johnson & Johnson – have donated millions of dollars to halt an initiative that would require pharmaceutical companies to slash drug prices for specific patient groups. To date, the companies have contributed over $10 million to stop the initiative going to a ballet vote.

The California Drug Price Relief Act would put the price state healthcare programs pay for prescription drugs, on par with those paid by the US Department of Veterans Affairs (VA). The act would allow state programs to get a 24 percent discount on pharmaceutical manufacturer prices.

The proposed change in state law was made in response to growing unrest over the dramatically increasing cost of prescription medications. Overnight price hikes on lifesaving drugs have caused outrage, in both the public and private payers who are responsible for covering the costs of treatment.

A California advocacy group – the AIDS Heathcare Foundation (AHF) – is the driving force behind the initiative. According to the foundation, they predict that they will soon reach their goal of 500,000 signatures – a number which could ensure the cause is on the ballot for the November 2016 election.


The non-profit group – who have raised approximately $1.25 million for the cause – run HIV clinics, and have publically opposed drug price hikes in the past. AHF president Michael Weinstein said in a statement, “[If California can] pay the same prices for prescription drugs as the amounts paid by the Department of Veterans Affairs, it would result in significant savings to taxpayers. These ballot initiatives are necessary and appropriate to address public concern about runaway drug pricing.”

The Pharmaceutical Research and Manufacturers of America (PhRMA), has enlisted the help of 9 pharmaceutical companies to stop the California Drug Price Relief Act from getting a place on the ballet. According to information provided to state officials, Johnson & Johnson contributed the most – at $5.7 million – while Bristol-Myers Squibb donated almost $2.9 million to the cause.

Donations between $10,000 and $160,000 were made by the other contributors including Pfizer, Sunovion Pharmaceuticals, Daiichi Sankyo, Eisai, and The Medicines Co. “[The] ballot measure may look simple, [but] the changes proposed will have adverse consequences for Californians,” commented a spokeswoman for PhRMA. “If it goes forward, we’ll be preparing a campaign to educate voters in California about its negative consequences.”


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