Message from the Executive Director September 2024

STOP!...the Drug Pricing Scam and VOTE YES on Proposition 34

(And, Don’t Forget to VOTE NO on Proposition 33 While You’re at It!)

Background

Federal Drug Discount Program: Almost 30 years ago, lawmakers designed a federal drug discount program with the goal of helping health care nonprofit organizations treat more low-income patients.

Program Function: The drug discount program allows qualified nonprofit organizations like the AIDS Healthcare Foundation to purchase prescription drugs at a steep discount and then be reimbursed by health plans at much higher prices

Legal Requirement: Under existing federal law, these nonprofit organizations are supposed to use this taxpayer-generated excess revenue to offer more health care benefits and serve more patients and not for political or financial gain

Abuse of the Drug Discount Program

• But some organizations such as the AIDS Healthcare Foundation, led by its notorious President, Michael Weinstein, have abused the discount drug program, and have amassed hundreds of millions meant to help patients and instead have spent these windfall profits to further Weinstein’s personal and political agenda.
• Mr. Weinstein and his AIDS Healthcare Foundation have been the principal backers of Propositions 10 (2018) and 21 (2020), which sought to vastly expand local rent control and were soundly defeated by approximately two-thirds of California voters.

Michael Weinstein and the AIDS Healthcare Foundation:

• But this year Mr. Weinstein and his AIDS Healthcare Foundation are again funding millions of dollars out of his discount drug profit scam to seek passage this November of Proposition 33, also known as the Justice for Renters Act.
• Like Propositions 10 and 21 that came before it, this latest ballot initiative seeks to expand local rent control by imposing vacancy control so owners would no longer be able to increase rent to market when they have a vacancy, and also allow local jurisdictions to impose rent control on rent control-exempt properties such as single-family homes, condominiums and new construction.
• Mr. Weinstein apparently believes in rent control and is a proponent of socialized housing. His organization, the AIDS Healthcare Foundation, is one of the largest pharmaceutical distributors in the U.S. today, run as a non-profit organization, and funded primarily through our tax dollars, the federal discount drug program, for AIDS healthcare and research.

The Impact of the AIDS Healthcare Foundation’s Activities

• Through the AIDS Healthcare Foundation’s profits, and under Weinstein’s direction, the AIDS Healthcare Foundation has used taxpayer subsidized profits to purchase luxury condominiums, fund ballot measure campaigns to block housing construction, put an elected politician on its payroll, and acquire low-income multi-tenant housing complexes and operate them as slums
• With its taxpayer subsidized and highly profitable drug sales, Weinstein’s AIDS Healthcare Foundation also owns rental property available to low-income renters; however, according to the Los Angeles Times, he is considered to be a “slumlord” after the newspaper’s investigation exposed deplorable conditions in the apartments AHF operates.
• In addition, the California Legislature significantly cut the AIDS Healthcare Foundation funding because of what had been characterized as despicable, political tactics.

Also funded also by huge drug sales and windfall profits, over the past 10-years, Weinstein has filed 100’s of lawsuits against drug companies, property owners, and others, and he once attempted to pass a moratorium on any type of commercial construction within the City of Los Angeles. 

The Problem with Current Regulations

• These types of blatant abuses of taxpayer money violates the intent of the law, but because of loopholes that exist today in the federal drug discount program, “bad actors” like Mr. Weinstein can abuse their non-profit status to waste millions of dollars and avoid accountability.
• And even in the face of widespread criticism from patients and healthcare experts, Mr. Weinstein arrogantly says he will continue spending these taxpayer dollars in this manner for as long as he is allowed to do so.

The AIDS Healthcare Foundation and Mr. Weinstein are among the worst abusers of the federal drug discount program, but there are other bad actors as well.

Proposition 34: The Solution

• Californians can stop these drug pricing scams and close this loophole in the drug discount program. Proposition 34, the “Protect Patients Now Act,” will force the worst abusers of the drug discount program like Mr. Weinstein and his AIDS Healthcare Foundation back to the program’s original mission to provide healthcare to low-income patients and to more patients that are currently being served by Mr. Weinstein’s organization.
• This ballot measure focuses only on the program’s worst offenders, putting in place new accountability measures to ensure they are appropriately using our hard-earned taxpayer dollars.
• Proposition 34 requires that the federal discount drug program’s worst offenders like Mr. Weinstein spend at least 98% of their taxpayer-generated revenues on direct patient care. So long as these worst offenders meet these requirements, they can continue their health care operations and participate in the federal discount drug program.

However, if these offenders continue to misuse taxpayer funds, the Protect Patients Now Act (Proposition 34) requires the state to take away their non-profit status and make them ineligible to keep getting paid with taxpayer dollars.

Call to Action

So, why do I care about this discount drug scam?

• Because, not only does passage of Proposition 34, the Protect Patients Now Act, help to preserve taxpayer dollars and ensures participation in the federal discount drug program helps more qualified patients.
• But its passage also puts Mr. Weinstein and his AIDS Healthcare Foundation out of the business of promoting ballot initiatives like Propositions 10, 21 and now 33!

So, don’t be confused…

• Vote NO on Proposition 33: Prevents further expansion of problematic rent control initiatives.
• Vote YES, on Proposition 34: Supports measures to ensure proper use of taxpayer funds and improved accountability in the drug discount program.

Spread the Word:

• Inform friends and family about the importance of these votes.
• Ensure that Proposition 33 is defeated, and Proposition 34 is passed to protect patient care and taxpayer interests.

Daniel Yukelson, AAGLA Executive Director.  

Daniel Yukelson is currently the Executive Director of The Apartment Association of Greater Los Angeles (AAGLA).  As Certified Public Accountant, Yukelson began his career at Ernst & Young, the global accounting firm, and had served in senior financial roles principally as Chief Financial Officer for various public, private and start-up companies, including as Chief Financial Officer of Premiere Radio Networks, the largest U.S. radio network and now subsidiary of iHeart Media, and as Chief Financial Officer of Oasis West Realty, the owner of the Beverly Hilton and Waldorf Astoria Beverly Hills.  He is a former planning commissioner in the City of Beverly Hills and had served as Chairperson.