The California Department of Justice has announced that the deadline for health care entities to submit Proposition 34 reports has been extended from December 31, 2025, to April 30, 2026. Proposition 34, approved by voters in 2024, requires certain health care organizations to allocate at least 98% of their revenues from the federal discount prescription drug program directly to patient care and mandates annual reporting on these revenues and expenditures.
Entities subject to Proposition 34—described as “prescription drug price manipulators”—must provide a detailed accounting for the previous calendar year. This includes both statewide and nationwide gross and net revenues from participation in the federal discount prescription drug program and an explanation of how net revenues were spent. Submissions are accepted via Prop34@doj.ca.gov or through a secure file drop link. Public comments can also be sent to Prop34@doj.ca.gov.
Under the law, a “prescription drug price manipulator” is defined as an entity that participates in the federal drug discount program; has or had a license in California as a health plan, pharmacy, or clinic; is a tax-exempt organization or contracted with Medi-Cal or Medicare; spent more than $100 million over ten years on purposes other than direct patient care; and owns or operated multifamily housing units with at least 500 severe health and safety violations.
Accountings must be submitted under penalty of perjury. Failure to comply can result in suspension and eventual revocation of tax-exempt status and licenses to operate as a health plan, clinic, or pharmacy in California. Additionally, violators are barred from reapplying for such status or licenses for ten years.
Enforcement responsibilities fall to four state regulators: the Attorney General’s office, the California State Board of Pharmacy, the Department of Managed Health Care, and the State Department of Public Health.
The California Attorney General acts as the state’s chief law enforcement authority with duties including legal representation, criminal investigations, consumer protections, civil rights initiatives, and promoting transparency through public data portals such as OpenJustice (https://oag.ca.gov/). The office is part of the executive branch (https://oag.ca.gov/) and leads policies related to civil rights and environmental justice across California (https://oag.ca.gov/). Rob Bonta currently heads this office (https://oag.ca.gov/).
For more information about reporting requirements under Proposition 34 or submitting accountings and comments, visit https://oag.ca.gov/.