Legislation opposed by the California State University system that would have created a new state purchasing agent of prescription drugs for state agencies under the direction of the governor was vetoed as expected late last week.
AB 76, authored by Dario Frommer, California Assembly majority leader, D–Glendale, looked to provide relief to California consumers and taxpayers who struggle to afford the high costs of prescription drugs.
The bill would have established the Office of Pharmaceutical Purchasing inside the California Health and Human Services agency, and allowed the OPP to serve as the single purchasing agent for prescription drugs throughout many state agencies.
The bill included agencies such as the CSU system, Department of Corrections, Department of Mental Health, Department of Youth Authority, and the Department of Developmental Services, as well as the CSU system, which is not a state agency.
The impetus for the bill was to allow the taxpayers in California to get a break from the high costs of prescription drugs.
“Last year Californians spent over $3 billion in prescription drugs,” said Karen Kim, Frommer’s press secretary. “The Department of Corrections alone saw a 20 percent increase last year.”
“What we have recommended is that one agency (be) responsible for buying drugs for the entire state of California, rather than each agency negotiating separately,” Kim said. “This would allow us to pull California together, making us a stronger more efficient buying power, which would save taxpayers money due to better discounts in bulk.”
Many critics believed AB 76 would stifle agencies from using new developmental and research drugs. Instead, these agencies would have been required to abide by a strict and rigid set of guidelines as far as what prescription drugs are available for use.
The CSU opposed the legislation. The system believes it is receiving high-quality discounted pricing for pharmaceuticals, according to CSU officials.
Additionally, the Department of General Services would have been responsible for purchasing pharmaceuticals for all state agencies, including the CSU. The bill did not cover any other higher education entity for this purpose.
“The CSU currently does all of its purchasing separate and apart from the DGS and does not have an interest in shifting our responsibility to another state agency,” said Karen Zamarripa, assistant vice chancellor for the CSU. “The CSU is not a state agency and has a governing board that is appointed by the governor and members confirmed by the State Senate that have the responsibility for the operations of the CSU.”
Zamarripa said it is not necessarily AB 76 that the CSU had a problem with, but the inclusion of the CSU in its provisions.
“Creating a new state agency would be another bureaucracy that would create more paperwork delays, and in the end equal higher costs,” said Dorena Knepper, director of governmental affairs at CSUN.
“The system does not see reason to be included in the bill and it is seeking to be removed from it,” Knepper said prior to the governor’s veto.
Knepper said the author granted such an exemption to the state Department of Youth Authority, but not the CSU, most likely because of its size.
CSU Chancellor Charles Reed sent a letter requesting the CSU be taken out of the bill’s language, but the author declined in light of signals from Gov. Arnold Schwarzenegger’s office that he would veto the bill, according to CSUN governmental affairs office, which he eventually did.
Renee Hassija can be reached at firstname.lastname@example.org.