Los Angeles Times

The pharmaceutical industry’s campaign to turn California’s voter initiative process into its wholly owned subsidiary is moving into full gear.

With the statewide appearance of two television ads financed by a war chest pegged at $60 million (and counting) and aimed at two ballot initiatives concerned with prescription drug prices, it’s timely to consider what we’re getting for the drug companies’ money.

The commercials attack Proposition 79, which was drafted by labor unions and
consumer groups to force the industry to pony up discounts on drugs for California’s poor, elderly and medically uninsured. As an alternative, the ads promote Proposition 78, the pharmaceutical industry’s version of a discount program.

As might be expected, these measures differ in their reach and enforceability.

Proposition 79 would cover perhaps 10 million Californians — twice as many people as the drug makers’ plan. A more important distinction between them, however, is the so-called hammer, or the incentive to offer discounts. Proposition 79 states that the products of any drug company failing to offer significant discounts to the target population will be taken off Medi-Cal’s preferred list. This doesn’t mean that doctors can’t prescribe them for Medi-Cal members, only that they would need prior authorization to do so. That one extra step could cost a drug company millions of dollars.

The hammer in Proposition 78 is… Well, it doesn’t have a hammer. It’s entirely voluntary, relying on the drug companies to negotiate discounts and rebates out of sheer altruism. For a hint of how effective that is, we can look at a model program in Ohio, which the drug industry says works great for everyone. Judging from figures provided by state officials there, the actual discounts provided by the companies have been minuscule. (Pharmaceutical lobbyists say their deal making in Ohio has been hampered by federal regulations that wouldn’t apply in California.)

Of course no one expects the pros and cons of an important public issue to be fully hashed out in 30-second TV commercials, especially when the $60 million behind them is all coming from one side. Big Pharma’s ad campaign does, however, present a valuable lesson in political obfuscation and bamboozlement. Let’s boil the curriculum down to a few fundamental rules.

1. Employ hot-button catchwords – The key words in the Pharma campaign are “bureaucracy” and “government.” As in: “Proposition 79 creates a costly new bureaucracy.” Or: “Prop. 79 creates a big new government program.”

The ads don’t mention that Proposition 78 also creates a government bureaucracy. The drug companies aren’t really concerned about the creation of a new bureaucracy, or its size; their concern is that the bureaucracy under Proposition 79 will be harder for them to manipulate.

2. Overstate your support – “Prop. 78 is supported by physicians, patient groups and pharmaceutical research companies,” one commercial proclaims.

Well, “physicians” could mean only two physicians; undoubtedly the supporters of
Proposition 79 could dredge up at least that many to endorse their proposal too, and then they could say “physicians oppose Proposition 78.” The California Medical Assn., which represents thousands of physicians in the state, hasn’t yet taken a position on either initiative and may not do so.

As for “patient groups,” it’s unsurprising that some have lined up behind Big Pharma. Many are on the drug makers’ dole. The Arthritis Foundation, parent of the California Arthritis Foundation Council, receives annual donations of $100,000 or more from Bristol-Myers Squibb, Pfizer, Wyeth Pharmaceuticals and Bayer, among others. Those four companies alone have contributed more than $27 million to the industry’s California war chest.

Incidentally, several of the ostensibly public-spirited grass-roots groups also listed as Proposition 78 supporters are, in reality, “AstroTurf” fronts for special interests.

Californians United for Research, Economic Development and Saving Lives, or CURES, for example, was partially funded by the California Healthcare Institute, a Sacramento lobbying arm for the pharmaceutical industry, medical device makers and medical research institutes. CURES was last seen lobbying against bills to allow Californians to import cheaper drugs from Canada.

Stephen Chang, PhD, who appears on one of the new TV ads to laud Proposition 78 as a “practical alternative,” is president of CURES, although he isn’t identified as such in the commercial. (I am indebted to the Foundation for Taxpayer and Consumer Rights for some of this research.)

3. Avoid addressing the real issue – Curiously, neither ad mentions the provision of Proposition 79 that really worries the industry: It would allow customers to sue drug companies for alleged profiteering. (The industry could be afraid that its low public standing might make this provision the measure’s best selling point among voters — and therefore it’s best left unmentioned.)

Instead, the ads make a slew of misleading assertions — that Proposition 79 “could limit patient access to discounted drugs,” for example — in an attempt to present the drug industry as the patient’s best friend.

It must be plain that no industry would voluntarily spend $60 million to promote the public interest — they only spend this kind of cash to promote their own interests. The drug company campaign is a milestone in the hijacking of the initiative process by big business lobbyists and other powerful entities. We should vote Proposition 78 down to reestablish a fundamental principle: that the process belongs to us, not them.
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You can reach Michael Hiltzik at [email protected] and read his previous columns at latimes.com/hiltzik