Wednesday, January 5th, 2004


  • Governor announces a drug discount card in the State of the State
  • Assembly Democrats announce new slate of bills
  • New HMO regulations proposed on prescription drug access
  • Upcoming events of note for advocates

The new year brings a new set of issues and politics around prescription drugs in Sacramento. On Monday, a group of Democratic Assembly legislators held a press conference announcing a package of bills around the cost and safety of prescription drugs. On Tuesday, the Department of Managed Health Care announced draft regulations of a bill to ensure access to medically necessary prescription drugs for HMO patients. On Wednesday, Governor Arnold Schwarzenegger announced a new prescription drug discount card, updating his proposal from last fall. On Thursday, he plans to release the details of his proposals.

STATE OF THE STATE: Governor Schwarzenegger gave his State of the State speech tonight, offering proposals for changes to the budget, education, government, and elections. He did not mention Medi-Cal redesign or health care budget cuts directly. But he did say he was about to release a “painful budget” that “does not solve our ongoing structural problem, because our deficit the following year will be even worse.” He proposed to “reform” the “budget system,” but did not details what that would mean except that he would submit “legislation that cuts expenditures across the board when they grow above revenues.”

In last year’s speech, the Governor never mentioned health care issues. This year, he only gave health care passing reference, even as hospitals and emergency rooms close, health costs go up, and more Californians become uninsured. His entire statement on health care in the speech focused on his prescription drug discount proposal:

“Another thing every state needs is affordable health care for its citizens. Millions of Californians lack coverage for the prescription drugs they need. Many of these people are the working poor who do not qualify for assistance. Therefore, I am announcing a prescription drug discount card with minimal costs to the state. We will make prescription drugs available to nearly 5 million low-income Californians, at prices competitive with those from Canada.” The entire speech is available at the Governor’s website, at:

GOVERNOR’S DRUG DISCOUNT CARD: The Governor will release his proposal tomorrow, which is reported to include a drug discount card, which would be available to Californians under 300% of the federal poverty level. Those who sign up for the card would get discounts off of the retail price of the certain drugs, that would be given voluntarily by the drug companies for three years. Finally, the proposal would also include a online clearinghouse and toll-free phone number for Californians to increase awareness about “free” proposals that would be offered by the drug companies.

More details will be released tomorrow, but some advocates are concerned that these proposals offer only a limited benefit that would go to a limited number of Californians. A greater concern is that these discounts are not required but voluntary, and what would ensure these savings into the future.

ASSEMBLY LEGISLATION INTRODUCED: Indicating this will be a hot political topic this year, Democratic Assemblymembers announced a package of bills earlier this week. A Monday press conference featured Assembly Majority Leader Dario Frommer (Glendale), Assembly Health Committee Chair Wilma Chan (Oakland), and many old and new Assemblymembers, in many cases right off of camapigns that featured the issue prominently. Wihle we also expect a full slate of bills introduced in the Senate as well, the Assembly bills included:

  • AB 71: Establish a California Drug Safety Watch to compile data about adverse reactions from consumers who use prescription drugs.
  • AB 72: Require drug makers to supply the state with all its data about the safety and effectiveness of drugs being marketed in California.
  • AB 73: Provide information to consumers about international pharmacies that meet state standards for safety and accessibility that sell prescription drugs for 40% to 75% less.
  • AB 74: Set up an information hotline providing consumers with information on available prescription drug discount programs and services.
  • AB 75: Establish a state program offering a drug discount card for low-income Californians.
  • AB 76: Consolidate drug purchasing for state programs to negotiate for lower drug prices.
  • AB 77: Set up a pilot program for the California Department of Corrections to purchase prescription drugs at federal discount prices
  • AB 78: Increase financial disclosure by pharmacy benefits managers who negotiate for their clients (CalPERS, employers, insurers, unions) for discounts from drug manufacturers to eliminate conflict of interest relationships.
  • A yet to be filed bill will also seek to reduce the state’s costs for marketing certain prescription drugs for certain life-threatening chronic conditions.

HMO REGULATIONS: Also this week, the Department of Managed Health Care (DMHC) Director Cindy Ehnes unveiled new regulations to ensure that HMO enrollees with prescription drug coverage actually have access to medically necessary prescription drugs. The regulations seek to implement SB842 (Speier) passed in 2002, which was passed when HMOs won court battles challenging the Department’s power to regulate drug coverage. Consumer advocacy groups will comment on the regulations, and in particular seek stronger language protecting consumers from out-of-pocket costs that would impede access to medically necessary drugs. The draft regulations, and the opportunity to provide comment, are available at the website, at:

ADVOCACY EVENTS OF NOTE: The new year has gotten off to a busy week in Sacramento, and there are more events in just the next few days. They include:

  • A California HealthCare Foundation session on Thursday on a new tool to evaluate coverage expansions.
  • A California Working Families Policy Summit on Friday that will review various ideas and proposals on health and other vital issues for the new legislative year.
  • A Californians for Healthy Kids briefing on Friday to discuss the emerging policy framework on a proposal to cover all children, and to engage advocacy group in such a campaign

These events, and many others, are described in much more detail (and with links to more materials and to RSVP) on the Health and Budget Advocacy Calendar. Visit it regularly as it is constantly updated, at:

Health Access California promotes quality, affordable health care for all Californians.
VIEW THE FILE Uncategorized

Leave a Comment

%d bloggers like this: