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Apr 13, 2004 - 02:45 PM

Drug Deals?

by Jerry Flanagan
The "Collectinator" has done a far better job of collecting campaign cash for himself from pharmaceutical companies - over $290,000 in checks cashed - than he has collecting money reportedly owed California taxpayers by pharmaceutical giants (known collectively as Big Pharma).

A recent Bush Administration audit found that California could not account for the $1.3 billion in drug rebates from Big Pharma that the state had previously reported to federal regulators - money owed the state under the rules of a 1990 federal drug rebate law. Arnold's team responded by saying that it was "only" an $800 million debt due to the state, but they are overdue in explaining this half-a-billion dollar disagreement. More importantly, they haven't demonstrated that they have collected any of the cash.

The state bean counters seem to be having as much trouble keeping track of staff as they are collecting the dough. According to today's Sacramento Bee, state regulators blamed staff reductions for delaying the collection of rebates. But what budget hawk would cut staff from a program whose job it is to collect more than a billion dollars a year in money owed to the state? The truth is that last year the department was given 11 new staff to collect long-overdue rebates. ArnoldWatch tipsters tell us, however, that Arnold took those mini-collectinators off the beat, reassigning them to other projects.

What is the governor hiding?

We have submitted a Public Records Act Request for all documents pertaining to the state's MediCal drug rebate program. In the name of thousands of poor and disabled MediCal patients who have been told that the state can no longer afford to pay for their health care coverage, which costs roughly $800 million, the gov. should provide a complete accounting of the state's drug deals. Taxpayers deserve to know why drug firms are not paying what is supposed to be their obligation. Be it bureaucratic ineptitude, political pandering or some of both - the voters deserves a full and fair accounting of the numbers from Arnold, who promised to be the Sunshine Governor.

(Last week, the Foundation for Taxpayer and Consumer Rights (FTCR) released an analysis of similar programs in 46 states and the District of Columbia showing that California had performed "far below average" in tracking and collecting rebates. The FTCR state-by-state analysis is available at: The Office of Inspector General audit is available at:

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