Issue 2 debate

Prescription drug question often misunderstood

08-25 state

By Michael Kelly

The Marietta Times

mkelly@mariettatimes.com

Voting on Nov. 8? You may have some homework to do.

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.

The first thing to know about Issue 2 is that it 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.

Despite millions of dollars being spent on the campaign by both sides, spokesmen for the campaigns admit the issue is poorly understood by ordinary voters.

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.

“As taxpayers, every resident of Ohio would see savings because the state would pay less. If your neighbor has a disabled child on Medicaid and the state can get that child’s drugs cheaper, there would

be a savings to all taxpayers,” he said.

Little said the state buys drugs for 4 million people a year, mainly Medicaid clients.

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

“This is just bad public policy,” he said.

“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.”

An informal survey at the O’Neill Center in Marietta Friday suggests voters may have only a foggy notion about the ballot proposition.

Norma Price, a lifelong Marietta resident and former employee of Marietta College, was at the center looking for quarter auction tickets.

“I’d like to help people who can’t afford their prescriptions,” she said when asked about the November vote. “I probably don’t know about it.”

Two other seniors outside the center said they knew nothing about the issue.

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.

Butland said the ballot issue places restrictions on the state but not on the industry.

“The only thing a ballot initiative can do is limit what the state can pay, not what manufacturers are willing to sell it at, and that means people don’t (necessarily) have access to that drug price,” he said.

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

“This is why the battle is being fought so hard,” he said, “The drug companies the last 10 years showed $711 billion in profits, and those costs trickle down to everyone who pays taxes or receives medical care. It’s several times higher than other western nations because we are the only country that doesn’t negotiate.”

Compelling drug manufacturers to sell their goods at a discounted price will bring the same response it would in other industries, Butland said.

“If they’re forced to sell low to one group, prices go up for others,” he said. “Even if we could force drug companies to sell at the VA rate, they would have no incentive to engage in voluntary discounts, and drug costs would increase by tens of millions of dollars.”

Butland also argued that Ohio Medicaid is already sold its drugs at a 23.1 percent discount, so for 75 percent of the drugs it buys, Ohio is already close to the VA discounted rate.

But the only entity that can raise drug prices is the industry itself, Little said, so the decision on how much the government and others pay for drugs is made by the manufacturers.

“It’s ridiculous for them to say prices will go up” as a result of Issue 2, he said. “They make that decision.”

Butland said he believes high drug prices are part of a larger, national problem with the greater health care system.

“I understand the anger at drug companies, but those things are not on the ballot,” he said. “People a lot smarter than me have looked at this for a long time, but the answer is not on the ballot in Ohio.”

ISSUE 2

¯ What: A ballot measure in the Nov. 8 election that could affect the way the state purchases drugs.

¯ Pro side: The state could save $400-700 million per year on the drugs it buys for Medicaid, Workers Compensation, state employees and other agencies.

¯ Con side: The proposal won’t work, will lead to litigation and might increase drug costs for consumers and other groups.

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