Protect Patients Now, which is sponsored by the California Apartment Association, submitted over 860,000 raw signatures for verification on April 10, according to the secretary of state. The campaign needs 546,651 signatures to be valid to qualify the initiated state statute for the November ballot in California.
The initiative would establish a new category of entities called prescription drug price manipulators that meet all of the following criteria:
- participates in the federal 340B drug price discount program;
- owns or has owned at least one license to operate as a health insurance plan, pharmacy, or clinic in the state or contracts with Med-Cal as a primary care case management organization or with Medicare as a special needs plan;
- has spent more than $100 million on purposes not related to direct patient care in a 10-year period of its existence; and
- owns, operates, or previously owned and operated one or more multifamily dwellings that have received a combined total of at least 500 state or local high violations.
If an entity is classified as a prescription drug price manipulator, the entity would have to meet the following requirements annually to maintain its tax-exempt status and licensure to operate as a health insurance plan, pharmacy, and clinic:
- spend at least 98% of revenues from federal discount prescription drug program on direct patient care and
- not engage in unprofessional conduct or conduct contrary to public health, welfare, or safety.
In its report on the initiative, the Legislative Analyst’s Office said, “Likely few entities would meet the measure’s tests to qualify as a prescription drug price manipulator, but the exact number is not known.”
The initiative would also require entities defined as prescription drug price manipulators to spend at least 98% or more of their revenue earned from their national participation in the 304B program on direct patient care to be eligible for state and local government grants and contracts.
The initiative would also permanently authorize Medi-Cal Rx, the state’s drug discount program, in state statute. Gov. Gavin Newsom (D) first established the program in January 2019 via executive order.
Protect Patients Now reported $7.7 million in contributions through Dec. 31, 2023, with the California Apartment Association contributing the total amount.
On the campaign’s website, Protect Patients Now says, “[The act] will force the worst abusers of the drug discount program, like Weinstein’s [AIDS Healthcare Foundation] (AHF), back to the program’s original mission to provide healthcare to low-income patients. This measure focuses only on the program’s worst offenders, putting in place new accountability measures to ensure they are appropriately using taxpayer dollars. The Act requires the program’s worst offenders like AHF and any others like it to spend 98% of their taxpayer-generated revenues on direct patient care. It also prevents them from overcharging government agencies for prescription drugs. So long as these worst offenders meet these requirements, they can continue their health care operations.”
Susie Shannon, policy director of Housing is a Human Right, said when the initiative was initially filed, “Don’t be fooled: The Patient Protection Act targets one organization, AHF, the largest HIV/ AIDS organization in the world, and the leading organization working to expand rent control for the most vulnerable in our society – low-income seniors, veterans, single parents and patients with HIV/AIDS. CAA, which does not represent patients, has shown they are willing to deceive voters in their quest for unbridled profits for the billionaire landlord class they represent, while patients and low-income renters suffer.”
The AIDS Healthcare Foundation (AHF) is a 501(c)(3) organization based in California that provides treatment for people with AIDS/HIV and educational services regarding AIDS/HIV awareness in various global locations. The organization also conducts clinical trials and research studies.
AHF qualified its own initiative for the November ballot that would allow cities and counties to limit rent on any housing and prohibit the state from limiting “the right of any city, county, or city and county to maintain, enact or expand residential rent control.” The AIDS Healthcare Foundation sponsored two similar initiatives in 2018 and 2020 that were defeated. AIDS Healthcare Foundation contributed $63.1 million in support of both initiatives.
AHF filed a lawsuit against the Protect Patients Now initiative in November 2023 arguing it should not be on the ballot because it is unconstitutional because it “illegally applies to one—and only one—organization in all of California: AIDS Healthcare Foundation.” The Third Appellate District Court denied the petition for expedited review on Nov. 30.
Six initiatives have qualified for the Nov. 5 ballot in California. An initiative to require a personal finance course in high school is also awaiting signature verification. Between 2010 and 2022, an average of nine initiatives qualified for even-numbered year ballots, with an average of 82 filed each cycle.
Additional reading: