California's Proposition 34 would limit how providers spend prescription drug revenue. Here's what you should know

A California ballot measure on the ballot in the 2024 election would place limits on how some health care providers can spend revenue from prescription drug programs.

Proposition 34 would establish rules requiring certain providers to spend 98% of their revenue from federal prescription drug discount programs on direct patient care, with penalties imposed on those who fail to comply.

The consequences could be that the company can no longer operate as a healthcare facility for a period of up to 10 years. The measure would also allow nationwide negotiations on Medi-Cal drug prices.

What do proponents of Proposition 34 say?

Supporters of Proposition 34 say the measure will help protect patients and ensure discounted prescription drug revenue goes to those who need additional care. That closes a loophole that they say allows companies to spend that revenue on things like buying stadium naming rights and paying multimillion-dollar salaries for executives.

What do opponents of Proposition 34 say?

Opponents have argued that Proposition 34 is a so-called “revenge initiative” funded by major landlords and billionaires through the California Apartment Association.

They say the measure aims to strip the Los Angeles-based AIDS Healthcare Foundation of its nonprofit status. Interfering with the work of the organization supporting rent control in California and the effort to repeal the Costa-Hawkins Rental Housing Act of 1995 through Proposition 33.