A federal law dating back 30 years gives health care providers who serve low-income patients a discount on pharmaceutical drugs. The providers can sell those drugs at market rate and make a profit, which they can use to expand health care for disadvantaged populations.
Prop 34 would require providers to spend 98% of that profit on direct patient care but only if the health care providers meet certain specifications. They must spend at least $100 million on expenses outside direct care, own and operate apartment buildings and have at least 500 severe health and safety violations from the last decade.
“The organizations that would be subject to this proposition, there's only one. As far as anyone can tell, that's the AIDS Healthcare Foundation,” said CalMatters Housing Reporter Ben Christopher.
You read that right: the proposition appears to be taking aim at one group, the AIDS Healthcare Foundation, which has become a major player in the California housing politics game and is a driving force behind the rent control measure (Prop 33) that is also on the ballot this November.
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“Proposition 34 is a revenge initiative that is targeted specifically at AIDS Healthcare Foundation, and it's primarily because AIDS Healthcare Foundation has been spearheading rent control initiatives,” said Susie Shannon, the No on 34 campaign manager, who also works with AHF.
The California Apartment Association is the landlord lobby pushing for Prop 34. The Yes on Prop 34 campaign argues a handful of "bad actor[s]" are using a "legal loophole" to spend money meant for patient care on building housing projects they say are "run like slums."
In a statement, Yes on 34 wrote, "Prop 34 will prevent this abuse from occurring in California and requires discount drug program dollars generated in California to be used for their intended purpose: helping patients."
Decision 2024
“If you read the text of the prop, it seems to have everything to do with health care," Christopher said. “But really, this is ultimately about housing politics in California.”
Politics, not policy.
“This is sort of another and maybe one of the more extreme examples of political interest groups using the proposition system to advance their very narrow goals,” Christopher said.
