California vote tabulations are currently backing a state ballot measure that would impose new restrictions on health systems' 340B drug spending.
Though final election results are pending, Proposition 34 appears on track to pass with 51.5% of voters supporting the measure as of the night of Nov. 6.
The ballot measure would require certain healthcare providers to spend 98% of 340B revenue on direct patient care activities. The requirements would apply to organizations that spent more than $100 million over a 10-year period on anything other than patient care and operated housing complexes with more than 500 health and safety violations.
Organizations that violate these restrictions would be subject to various penalties, including the potential loss of their licenses and tax-exempt status. The measure would also authorize the statewide negotiation of Medi-Cal drug prices.
Proponents of Prop 34 argue that it will ensure public healthcare dollars are directed to patients in need. They say the measure will close loopholes that allow funds to be used for excessive corporate spending, such as high CEO salaries and stadium naming rights.
However, opponents contend that Prop 34 is a "revenge initiative" funded by the California Apartment Association. They argue it is an attempt to punish the AIDS Healthcare Foundation — a major opponent of the bill — for backing a separate rent control measure on this year's ballot.