“Most Californians probably do not realize that government regulations cause high drug prices for uninsured patients,” said John R. Graham, director of health care studies at PRI and author of the new report. “Although Prop. 78 creates a new state program, it actually reduces government involvement in setting prescription drug prices by approving voluntary discount programs that drug makers are already operating in the U.S.” Over time, Mr. Graham expects that these discounts will be financed largely by pharmaceutical manufacturers and at little cost to California’s taxpayers.

“On the other hand,” said Mr. Graham, “Any discounts, if they ever occur under Prop. 79, will likely come out of the pockets of taxpayers, with the pharmaceutical industry and community pharmacies likely to boycott the program.”

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