California Welfare and Institutions Code

§ 14124.40

WIC § 14124.40 Effective Dec 18, 2024Div. 9 · Part 3 · Ch. 7 · Art. 3.3

Statute text

Findings and Declarations

(a)In 1992, the federal government established a program giving safety net health care providers access to discounted prescription drugs. The intent of the law was for safety net health care providers to use the discounted drugs to treat patients who are “medically uninsured, on marginal incomes and have no other sources to turn to for preventive and primary care services” and to “reach[] more eligible patients and provide[] more comprehensive services” to “low-income and most vulnerable patients.” (H.R. Rep. No. 102-384 (Part 2), at 12 (1992)(Conf. Rep.).) The program was not intended to be used by safety net health care providers to accumulate massive fortunes running into the hundreds of millions of dollars or more.

(b)Unfortunately, some safety net health care providers have manipulated the program to receive enormous markups on the discounted prescription drugs they receive and then stick taxpayers with the added cost. Instead of using this massive windfall to help patients, the worst offenders have used their fortunes to purchase luxury coastal condominiums, wasted hundreds of millions of dollars on failed political campaigns, put elected politicians on their payrolls, and acquired low-income multifamily housing complexes that are operated as slums. Abusing net revenues generated through the discount prescription drug program in this manner does not result in better health care for low-income patients. Instead, it cheats low-income patients out of the care they deserve and scams taxpayers who end up footing the bill.

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Legislative history

Added November 5, 2024, by initiative Proposition 34, Sec. 1. Effective December 18, 2024. Approved in Proposition 34 at the November 5, 2024, election. Operative January 1, 2025, pursuant to Section 14124.52.