'Stop Runaway Drug Pricing' Measure Qualifies for San Francisco Ballot, says the Committee on Fair Drug Pricing (a.k.a. FAIR)

SAN FRANCISCO --(Business Wire)--

A first-in-the-nation drug pricing measure that would force pharmaceutical companies to lower the cost of prescription medication has qualified for the November ballot in San Francisco. The "Stop Runaway Drug Pricing" (aka Prescription Drug Purchasing) initiative will boost patient access to life-saving medications while taking a bite out of the $23 million San Francisco spends every year on providing those drugs. The measure is being sponsored the Committee on Fair Drug Pricing (AKA 'FAIR'), a coalition of local and national healthcare groups with major funding from AIDS Healthcare Foundation.

"We are thrilled to have formal notice that our Prescription Drug Purchasing initiative has qualified for the ballot," said Michael Weinstein, President of AIDS Healthcare Foundation (AHF). "As government programs pay for the vast majority of drug purchases in this country, we believe a state as vast and powerful as California-and a City and County like San Francisco-can and should use its clout to stand up to and rein in runaway pricing of drug companies. That is why we are now taking this issue directly to the people of San Francisco in November through this ballot measure." 17,800 signatures were collected from San Francisco residents to qualify the measure.

The announcement was praised by San Francisco Board of Supervisors President David Chiu, who said it represents a vitally important opportunity for the City to take a firm stand against skyrocketing health care costs. "Prescription drug costs place an enormous - and growing - financial burden not only on our residents and employers, but also on local governments who pay for the safety net thatprotects the most vulnerable within our community," said Chiu. "I look forward to working with our city's diverse communities who need relief from these costs and supporting the Prescription Drug Purchasing Initiative."

"I, too, am pleased to learn that our ballot measure has qualified to be placed before San Francisco voters," said Dr. Lisha Wilson, Medical Director, San Francisco Healthcare Centers, AIDS Healthcare Foundation. "High-priced medications for the most serious health conditions are becoming more and more common, and more costly than most of my patients-and, in fact, most patients in the US-earn in any given year. Runaway drug pricing limits access to lifesaving medications by gouging hard hit government aid programs as well as private insurers, and is one of the reasons why I am a proponent of this ballot measure."

THE SAN FRANCISCO 'STOP RUNAWAY DRUG PRICING' BALLOT MEASURE

Rising drug prices are one the biggest drivers of the increasing cost of health care in the United States. Spending in the US for prescription drugs was $234.1 billion in 2008, nearly six times the $40.3 billion spent in 1990. This increase outpaced spending growth for both hospital and physician/clinical services combined. In 2012, prescription drug prices rose 3.6 percent, twice the rate of healthcare inflation (1.7 percent). These higher costs are paid by taxpayer-funded sources, such as Medicaid, Medicare, and local health departments, which finance roughly half of all prescription drug spending in the U.S. each year.

So-called "specialty medications" (drug used to treat HIV/AIDS, cancer, and diabetes, etc.) are at the epicenter of this disturbing trend. For example, in 2012, total spending on specialty medications increased by over 23 percent in 2012. In addition, since 2000, the average price of new HIV/AIDS medicines has increased nearly 70 percent.

Following is the TITLE & SUMMARY prepared by the City Attorney of San Francisco for the measure that was published with the NOTICE OF INTENT TO CIRCULATE PETITION, which ran in the San Francisco Chronicle, Monday, November 12, 2012:

Prescription Drug Purchasing

San Francisco purchases prescription drugs for medical programs run by the City. San Francisco runs inpatient treatment programs at San Francisco General Hospital, Laguna Honda (News - Alert) Hospital, and the San Francisco jail. It also runs outpatient treatment programs at the City's hospitals and clinics. For example, San Francisco provides prescription drugs to many participants in the Healthy San Francisco program, which offers health care to uninsured San Francisco residents who meet income requirements.

San Francisco spends over $23 million per year on prescription drugs. This includes approximately $3.5 million dollars annually on antiretroviral medications to treat inpatients with HIV and related conditions.

City law authorizes San Francisco's Public Health Department to use outside companies to negotiate prices and purchase prescription drugs. For inpatient medications, including medications for inmates, the City uses an outside company that negotiates drug prices with drug manufacturers. For outpatient medications, the City participates in a federal program that offers a significant discount on prescription drugs. To ensure that it remains eligible for this program, the City uses a federally selected company to negotiate prices and purchase outpatient prescription drugs.

The proposed measure would make it City policy to employ all available opportunities to reduce the price of prescription drugs. It would establish as City policy that San Francisco directly negotiate with drug manufacturers and seek to pay less for essential medications that the City purchases. It would also establish as City policy that San Francisco ask its representatives in state and federal government to sponsor legislation to reduce by one third current drug prices paid by all levels of government.

If the proposed measure were adopted, the Board of Supervisors would be required to study the policy and determine what action, if any, would be appropriate to implement the policy. [Department of Elections file no. 12-03]