Public referendum on drug prices in the US: will it bring relief?

Thomas Hwang and Aaron Kesselheim assess how California’s proposed new law on drug pricing could affect healthcare costs in the US and beyond Concerns over the rising cost of new medicines have prompted calls for a more sustainable system of drug pricing.1 2 3 Public unease is particularly acute in the US, where brand name drug prices are the highest in the world and the costs are increasingly being passed on to patients.4 This has led to federal and state policy efforts seeking to tackle high drug prices.5 6 In November, one such policy initiative will be put to a vote: voters in California will decide whether preferential pricing provided to the US Department of Veterans Affairs should also be available to other public payers in the state. Successful ballot measures in California have historically triggered national reforms (box 1). The outcomes of the California referendum are also likely to have global implications, because attempts to reduce drug prices in the US could have a ripple effect on the prices negotiated by other countries.7 We examine the potential savings from the proposed change. #### Box 1: Importance of policy reforms in California California has a long history as a laboratory for national policy reforms. It is the most populous US state (about 39 million people), accounting for roughly 12% of the US population. California also grants its voters the power to initiate or repeal legislation by referendum. Examples of influential health policy changes in California include: