2005 California Proposition 79

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California Proposition 79 (2005) was an initiative (a.k.a. Initiative Statute) in the November 8, 2005 elections that covers the areas of Prescription Drug Discounts and State-Negotiated Rebates.

This proposition failed with 60.7% voting against.[1]


Provides for prescription drug discounts to Californians who qualify based on income-related standards, to be funded through rebates from participating drug manufacturers negotiated by California Department of Health Services. Rebates must be deposited in State Treasury fund, used only to reimburse pharmacies for discounts and to offset administration costs. At least 95% of rebates must go to fund discounts. Prohibits new Medi-Cal contracts with manufacturers not providing the Medicaid best price to this program, except for drugs without therapeutic equivalent. Establishes oversight board. Makes prescription drug profiteering, as defined, unlawful.[2]

Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: One-time and ongoing state costs, potentially in the millions to low tens of millions of dollars annually, for administration and outreach activities for a new drug discount program. A significant share of these costs would probably be borne by the state General Fund. A largely one-time state cost, potentially in the low tens of millions of dollars, to cover the funding gap between the time when drug rebates are collected by the state and when the state pays funds to pharmacies for drug discounts provided to consumers.

Any such costs not covered through advance rebate payments from drug makers would be borne by the state General Fund. Unknown costs and savings as a result of provisions linking drug prices for the new drug discount program to Medi-Cal prices, including the potential effect on the state's receipt of supplemental rebates; unknown savings on state and county health program costs due to the availability of drug discounts; and unknown costs and offsetting revenues from the anti-profiteering provisions.

See also[edit]


  1. ^ Smart Voter web site
  2. ^ "Legislative Analyst's Office". Archived from the original on 2007-03-13. Retrieved 2006-09-23.

External links[edit]

Details of this proposition are also available from the Legislative Analyst's Office.