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This weekly column offers opinions on the latest pharmaceutical industry news.

As Americans grapple with the rising cost of medicines, a contentious ballot measure in California is being billed as a fix to an intractable national problem.

Known as Proposition 61, the proposal would require state agencies to pay no more for prescription drugs than the US Department of Veteran Affairs, which receives a federally mandated 24 percent discount from manufacturers. In theory, that would lower drug costs for up to 7 million residents of California who get insurance coverage for their medicines through various state agencies, including low-income residents on the state version of Medicaid.


Supporters, including Senator Bernie Sanders, maintain the measure will make it harder for “greedy” drug makers to pursue “price gouging.” For its part, the pharmaceutical industry warns there will be “unintended consequences,” such as higher prices on some drugs or fewer choices for some state residents.

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  • As the taxpayers have become exasperated helplessly watching their politicians purloined by Big Pharma’s spreading its largesse through its army of lobbyists around Capitol Hill, this is the inevitable reaction, comparable to the serfs charging the landowner’s castle at night with pitchforks and lanterns. Citizen propositions, such as California’s, are the remaining tool for the taxpayer, given how Big Pharma swiftly embraces any of their pocket politicians in trouble during re-election.

    What else can the taxpayer do anymore? The insurance industry apparently cannot competently proforma policies without losing on the coverage; the structural incompetence of the hospitals is only magnified as they seek relief through their “Pac-Man” approach to M&A. Nobody has the leverage to sit at the negotiating table–certainly not CMS or Congress (remember the 2002 Medicare Part D Act..?)

    ACA was DOA when only one party ran the table and made its deals in the alley with Big Pharma and Big Insurance, all at the expense of the taxpayer. This only encouraged the end result we are witnessing today–the grotesque profiteering by Big Pharma, balancing its price and profit cap of every country in the world on the backs of Americans, where our “free market” has granted a product monopoly “to price at whatever the market will bear.” Making this even more obscene is the fact how Big Pharma enhances its profiting by now relying on the quality of product ingredients and drug manufacturing in China and India, where you would not even use the water for ice cubes or to brush your teeth.

    Given how Congress kowtows to Big Pharma, the inability of CMS to timely react, and the lack of interest by the U.S. Attorney to hit Big Pharma with RICO actions, ideally these citizen propositions will eventually encourage executive action by the next president to reign in the uncompetitive pricing and exorbitant profits of Big Pharma.

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