California voters may have rejected a drug-discount measure backed by pharmaceutical makers, but a lavish campaign the industry bankrolled was worth every penny, political and financial experts said Wednesday.
The industry spent $80 million to back Proposition 78, which would have allowed voluntary discounts for low-income people, and defeat Proposition 79, a rival measure that would have all but forced drug makers to participate. Both were defeated, with 58% voting against Proposition 78 and 61% voting against Proposition 79.
The industry said it was fully committed to Proposition 78 and had not simply sought to defeat the rival measure. "We had many ads that dealt with 78 and supported the messages on 78," said industry spokeswoman Denise Davis.
But drug executives are "dancing in the boardrooms" despite the defeat of their own measure, said Bob Stern, executive director of the Santa Monica-based Center for Governmental Studies. "They don't care that 78 went down.... They really wanted 79 to lose."
With most states eyeing measures to make drugs more affordable, political and financial analysts viewed the election as a key test of the industry's ability to fend off mandatory discounts.
Darry Sragow, a political consultant and longtime Democratic campaign strategist, said the pharmaceutical companies "made a great investment" by putting Proposition 78 on the ballot.
Even if both measures had passed, the industry could have won, Sragow said, because the measure that attracted the greater number of votes would have trumped the other.
But "their biggest victory was if neither won, because that maintains the status quo," he said.
Proposition 78 created confusion that helped defeat Proposition 79, said Jack Pitney, a government professor at Claremont McKenna College.
"People didn't like the pharmaceutical industry, but they probably didn't know which initiative was which, so they voted against them both," Pitney said. "It was a clever strategy in that the industry used its own unpopularity to its advantage."
Shares of the biggest corporate donors to the industry's campaign, each of which gave nearly $10 million, rose in Wednesday's stock trading. GlaxoSmithKline closed up 10 cents to $53.19, Johnson & Johnson rose a quarter to $61.02, Merck & Co. gained 22 cents to $29.59 and Pfizer Inc. was up 25 cents to $22.16.
