November 4, 2011
Pursuant to Elections
Code Section 9005, we have reviewed the proposed statutory initiative
related to monitoring prescription drug use (A.G. File No. 11‑0045).
California Monitors Prescription
Drug Activity. The California Department of Justice (DOJ)
maintains the Controlled Substance Utilization Review and Evaluation
System (CURES), an electronic database of prescription drugs issued by
doctors. The database allows law enforcement officials and doctors to
track patient prescription history in an effort to reduce the illegal
sale and abuse of prescription drugs. The CURES program monitors
prescription drugs classified by the federal government as being prone
to abuse. Recently, the state spent about $675,000 per year on CURES and
has received federal funding for the program in past years. The
2011‑12 Budget Act, however,
eliminates funding for the CURES program.
Current CURES Program Not Widely
Used by Doctors and Law Enforcement. Currently, 3 percent of the
185,000 medical professionals authorized to prescribe or dispense
prescription drugs utilize the CURES database to prevent patient drug
Expands Requirements and Funding
of CURES Program. This measure changes state law to (1) require
medical professionals that distribute prescription drugs to report
patient prescription history, and (2) require manufacturers or importers
of prescription drugs to pay a one-quarter cent ($0.0025) tax on each
pill prescribed in the state. Revenues raised by this measure will be
used to fund the CURES program.
Use of Additional Funding Under
This Measure. Additional revenues raised by the measure would
fund new and ongoing DOJ monitoring efforts, including hiring additional
staff to expand the database, register new database users, and work with
law enforcement officials. In addition, the measure would provide
funding for two enforcement teams to investigate prescription drug
abuses and to refer those cases for prosecution.
New State Revenues to Fund CURES
Program. In 2010, doctors and pharmacists in California issued
nearly 44 million prescriptions that included 2.8 billion pills.
Accordingly, the quarter-cent per pill fee on manufacturers and
importers of prescription drugs would generate approximately $7 million
annually. This amount would change over time to the extent that the
number of prescriptions issued each year changes. The revenues raised by
this measure would be used to fund the CURES program.
Other Fiscal Effects. The
measure could result in somewhat higher annual costs to state and local
law enforcement agencies to the extent that these agencies utilize the
CURES database to investigate and prosecute new prescription
drug-related offenses. These costs may be offset by increased fines and
penalties related to such offenses. There also would be one-time and
ongoing administrative costs related to collecting the new tax. The
measure earmarks a portion of the new revenues to cover these costs.
Summary of Fiscal Effects
We estimate that this
measure would have the following major fiscal effects:
Increased state revenues of approximately
$7 million annually from a new tax on prescription drugs. The revenues
would be used to increase spending on a prescription drug database
maintained by DOJ.
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