admin 
The state of California spends $3.8 billion annually on pharmaceuticals administered through state health and medical programs ranging from Medi-Cal to state hospitals to prisons. That is approximately half of all prescription purchasing in the state. This proposition would direct the state to set the purchase price for drugs it distributes. While most agencies already do that, this would unify the lowest target costs as equal to rates paid by the federal Veterans Administration. Those drugs on the VA formulary would be purchased in California at VA rates. This would not cover all drugs, but the purchasing power of the combined agencies would provide enormous leverage to do the same for non-VA formulary pharmaceuticals. As the 7th largest economy in the world, state price standards are a powerful base from which to negotiate and provide incentive to drug manufacturers. It could set a trend for further required negotiation by all sectors.