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Pharma Says "No Fair!"

by Jerry Flanagan, 1:40 p.m. PST, (415) 497-1710

It is a good day when the biggest bullies on the block get a taste of their own medicine.

That's exactly what happened today when the California Assembly committee with jurisdiction over the California Public Employees Retirement System (CalPERS) approved a bill to allow businesses and individual consumers to join a prescription drug bulk purchasing pool managed by the second largest purchaser of health care in the nation.

Lobbyists for PHRMA -- the national association representing pharmaceutical companies -- complained that the bill, AB 1958 (Frommer, D-L.A.), is "unfair to the industry" because it allows seniors and small businesses to gang-up on pharmaceutical companies and negotiate lower costs for prescription drugs. That's a ringing endorsement of the bill to all but those with a financial stake in the corporateering pharmaceutical industry!

Ignoring the obvious irony, a drug lobbyist testified that the legislation could lead to the creation of a "monopsony" (a monopoly of purchasers) if all Californians were allowed to negotiate drug costs as a single block. In effect, the drug companies complained that average consumers are taking a strategy out of the industry playbook which lords over patent protected drugs and whose political influence in Congress have given them and unchallenged stranglehold over the prices that patients must pay for the medications that keep them alive.

The pharmaceutical companys' near monopoly has worked out well for the industry: drug companies are the most profitable in the world. In fact, their profits are five times that of the average Fortune 500 company.

Majority Leader Frommer's bill will allow individual consumers and small business owners to benefit from lower cost prescription drugs by giving them the leverage they need to drive a hard bargain at the negotiating table.

This reversal of power agreed with the assembly committee: the bill was supported 6-2.

For a copy of California Assembly Majority Leader Dario Frommer's legislation please visit