The California Department of Justice has launched a new webpage to provide information about Proposition 34, a ballot measure approved by voters in 2024. The law mandates that certain health care entities must spend at least 98% of their revenues from the federal discount prescription drug program on direct patient care. These entities are also required to submit detailed accountings of these revenues and expenditures to the Department of Justice.
Under Proposition 34, covered health care entities—referred to as “prescription drug price manipulators”—must file by December 31, 2025, an accounting for the previous calendar year. This includes both statewide and nationwide gross and net revenues generated from participation in the discount prescription drug program, as well as details on how those net revenues were spent. Accountings can be submitted via email to Prop34@doj.ca.gov. The public may also send comments to this address.
Entities classified as “prescription drug price manipulators” are defined by several criteria: they participate in the federal drug discount program; have or had licenses in California related to health plans, pharmacies, or clinics; are tax-exempt organizations or have held certain contracts with Medi-Cal or Medicare; have spent more than $100 million over ten years on purposes other than direct patient care; and own or operate multifamily housing units with at least 500 high-severity health and safety violations.
Accountings must be submitted under penalty of perjury. If a covered entity fails to comply, penalties include suspension and revocation of tax-exempt status and all operational licenses within California. Additionally, such entities would be barred from reapplying for these statuses or licenses for ten years.
Enforcement responsibilities for Proposition 34 are shared among four state regulators: the Attorney General’s Office, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health. Entities holding pharmacy licenses that need to submit information can find instructions on filing accountings through the Board of Pharmacy’s Proposition 34 web page.
“Prescription drug price manipulators” that hold pharmacy licenses and therefore are required to submit information to the Board of Pharmacy can access information and instructions for filing accountings by accessing the Board of Pharmacy’s Proposition 34 web page.
