State Issue 2 generates statewide interest on drug pricing

From staff reports

The ballot in Ohio will include Issue 2, a proposal to compel the Ohio government to negotiate prescription drug purchase prices that match those paid by the Veterans Administration health system to drug manufacturers.

Issue 2 does not directly involve the prices consumers pay their pharmacies for prescriptions, whether by cash or through an insurance plan. Rather, it will impact the prices the Ohio government pays for drugs used in state programs such as Medicaid and its own employee health care programs.

The proponents of the plan say it will save the state hundreds of millions of dollars per year by reducing the price it pays for drugs by 20 to 24 percent; opponents say it has the potential to result in numerous prolonged lawsuits, is poorly structured and could actually result in drug prices going up for some Ohioans.

David P. Little, a Columbus public relations consultant, represents Ohio Taxpayers for Lower Drug Prices, a group backed primarily by the AIDS Healthcare Foundation of Los Angeles that did the heavy lifting to get the proposition on the ballot.

Little says Issue 2 is simple: If it passes, the state government would be compelled to negotiate prices for the prescription drugs it buys to get the same price given by federal law to the VA, which is 24 percent below market. Although the proposition would not directly save individuals money at the pharmacy counter, Little says it would save the state — and hence, taxpayers — between $400 million and $700 million a year.

Dale Butland, another Columbus consultant, represents Ohioans Against Deceptive Rx Ballot Issue, a campaign financed primarily by PhRMA, an industry lobbying group for drug manufacturers, but also supported by numerous professional health care groups, among them the Ohio State Medical Association, the Ohio Nurses Association, the Ohio Hospital Association and the Ohio Pharmacists Association.

Butland said the passage of Issue 2 could “have ramifications beyond the price of drugs purchased by the state.”

“Everyone who has looked at this issue says this is unworkable,” he said, citing a lengthy list of studies, statements and positions by authors that included a former state director of Medicaid for Ohio, a former state budget director and former Secretary of Veterans Affairs Anthony Principi. “We have to educate voters, explain to them why something that sounds really good will backfire, increase costs and reduce access to medicine. It’s important people should know what they are voting on.”

Butland said tying the prescription drug purchasing policy for the state to the pricing system used by the VA creates a problematic situation because some of the prices paid by the VA are trade secrets between the agency and the pharmacy manufacturers, meaning the Ohio government can’t know in every case what target it is aiming for. In addition, the drugs bought by the VA are largely for the use of elderly men; the needs of the Ohioans receiving drugs for Medicaid, Workers Compensation and the other state programs are different — many of the clients are children and young women.

Little said opposition to the ballot issue is driven primarily by corporate profit motive.