Pharmaceutical companies are spending tens of millions of dollars to derail a ballot initiative for prescription drug discounts that would cut into profits in California and, if the idea spreads, elsewhere in the nation.

Proposition 79, placed on the November special ballot by consumer advocates, would require the companies to sell prescription drugs at a discount to low-income patients. It’s a local response to federal rules that keep drug prices higher in the United States than in other countries.

Efforts in Washington to force drug makers to lower their prices or allow consumers to buy them cheaper in Canada have failed under opposition from the pharmaceutical industry. Consumer groups in other states view Proposition 79 as a test case to see if mandatory drug discounts could be applied on a state-by-state basis.

“There is no reason why the citizens of California should have to pay more for prescription drugs than the people of other wealthy nations,” said Anthony Wright, executive director of Health Access, one of the groups sponsoring the legislation.

Rather than try to defeat Proposition 79, the drug industry has poured more than $50 million into a competing initiative, Proposition 78, which would establish a voluntary discount plan.

If both measures pass, the one with the most votes prevails. (In a statewide Field Poll taken last month, Prop. 78 had 60 percent support while Prop. 79 had 54 percent support.)

The drug companies say that the contributions are designed to educate voters on the benefits of their voluntary program and the drawbacks of the mandatory discount plan.

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The full story

is available in the July 18 edition of the Business Journal.