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Trying to understand Ohio’s Issue 2

Issue 2 is one of the more confusing, and arguably deceptive, initiatives on Ohio’s ballot this November.

Various titles have called it the “Drug Price Standards Initiative”, as well as the “Ohio Drug Price Relief Act.” Cute words. Impactful as well.

What exactly is it?

Politifact offers a simplistic version of the initiative: “Issue 2 would require all drugs bought by the state — whether for Medicaid or other state programs — to match Veterans Affairs prices, which receive a 24 percent discount off market price in addition to sometimes undisclosed rebates. The idea is that it would lower the state’s health care costs.”

The Veterans Health Care Act, passed in 1992, incorporated a “ceiling on prices that manufacturers can charge the VA and several other federal purchasers.” That’s a good thing. Most veterans require affordable healthcare (and better administrators). The VA went further in 1997, establishing “a national formulary, allowing the agency to leverage its purchasing power to obtain deeper discounts for individual therapies than any single facility might be able to obtain.” Therefore, the Department of Veteran Affairs purchases prescription drugs at discounted pricing, often lower than most commercial and governmental agencies. State and Federal agencies view this as a model when negotiating their own rates.

Issue 2 forces drug companies to sell drugs to the state of Ohio at rates used by the VA.

This sounds great

Proponents for Issue 2, such as Yes on Issue 2, argue that the state could save millions. Some estimates put discounts on prescription drugs as high as 24%.

I mean, holy shit. This sounds great! What can we do with all of this extra money, amiright?! 

The man pushing Issue 2 is Michael Weinstein, the president of AIDS Healthcare Foundation. “So far, his nonprofit has funded nearly the entire $6 million to the Ohio campaign, including $3.7 million in the last six months and the money to pay collectors to gather the 300,000-plus signatures that were needed to get the issue on the ballot,” writes the Cleveland Plain Dealer. Weinstein, known for applying aggressive tactics, pushed a similar proposal in California called Proposition 61, with his organization contributing over $19 million. It was defeated last year.

“By taking on drug manufacturers in California and Ohio, a crucial swing state, Weinstein had hoped to launch drug pricing onto the presidential debate stage,” writes the Los Angeles Times. “His plans faltered when, after months of legal wrangling, Ohio officials placed his measure on the November 2017 ballot instead. Now, Weinstein is pinning all his hopes of sparking that national movement on California — and is considering a similar effort in Florida.”

That’s right. Weinstein is hoping to generate causes, putting him in a significant position for elected office.

Over the years, his nonprofit AIDS Healthcare Foundation, which runs clinics around the world, has sued GlaxoSmithKline over its prices, Pfizer over its marketing and Gilead Sciences over its patents. Weinstein has taken on the porn industry and Los Angeles developers.

He’s won, and lost, and drawn plenty of criticism along the way, perhaps most when he enraged fellow public health advocates by breaking with the medical consensus to question the wisdom of urging some gay men and others at high risk of HIV to take the PrEP drug regimen to try to prevent infection. Critics have called him a “thug” and a bully. Fellow activists accuse Weinstein and his organization of ignoring others’ views and failing to build consensus.

Yet, drug companies ARE significantly increasing prices for life-saving drugs. Turing purchased Daraprim, medicine that treats toxoplasmosis and other parasites, and raised the price from $13.50/pill to $750/pill. Why? In addition to the profit windfall, it required the drug to be sold by a special pharmacy, not the corner drug store, that delivered the drug. This made it harder for competitive drug companies to create a generic version.

“Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable,” writes Andrew Pollack with the New York Times. “He said the company provided the drug free to certain needy patients.”

Mylan, producer of the well-known EpiPen, which treats severe asthmatic and allergic attacks, has changed the price of their life-saving drug multiple times, starting at $100 for a pack of two pens in 2009 and increasing it to $600 in 2016. According to reports, Mylan CEO Heather Bresch earned $18 million last year, a 200% increase from 2012. Is that connection related to the price hikes? To some degree, how can it not be?

This is a message for big pharma, proponents add.

Here’s where things get tricky.

If it sounds too good to be true, then it is

If you have private insurance, or Medicare (a federal program), you won’t see a discount. Just… you won’t. It’s unclear if people receiving drugs through the state would see a discount; these savings might be used by the state to implement the initiative, address eventual lawsuits, all while pharma could simply redistribute the costs. In addition, the actual discounts applied by the VA with prescription drugs are confidential. We actually don’t know what those discounts are.

There are over 80 organizations publicly opposing Issue 2, including the Ohio Pharmacists Association, Ohio State Medical Association, Ohio Chamber of Commerce, the Ohio Society for Health System Pharmacists, Pharmaceutical Research, American Legion Department of Ohio, and the National Guard, as well as three former state Medicaid directors, are just a handful of the medical professionals, veteran agencies, and businesses joining in opposition.

Notice it?

Lots of pharmaceutical agencies.

A nonprofit campaigning against Issue 2 allows many pharmaceutical donors to mask their identities. “All $15.8 million donated this year to the campaign against Issue 2 came from ‘Ohioans Against the Deceptive Rx Ballot Issue LLC (A wholly-owned subsidiary of PhRMA).‘ That’s a 501(c)(6) nonprofit created May 1. Unlike candidates, ballot issue campaigns don’t have to follow contribution limits, so each contribution exceeded $4.5 million – legally,” according to the Cincinnati Enquirer.

They argue that this will actually lead to increased prices, difficult access to drugs, and more bureaucracy.

“It’s unworkable because we literally cannot find out what those lowest (VA) prices are. But even if we could, and we were able to do it, there’s no guarantee that the pharmaceutical companies are going to give (Medicaid) those lower prices. It doesn’t force them to sell it at that lower price,” said John McCarthy, former Ohio Medicaid director under Gov. John Kasich, who has conducted an analysis of Issue 2 for the opposition.

On the other hand, if the state purchases drugs at discounted prices, doesn’t that mean all Ohioans would win? Again, not necessarily. If this initiative is passed, Pharma could redistribute the costs elsewhere, raising rates, to recoup that money. Ohio may face significant lawsuits, forcing the state to foot that bill. And there’s no language in the initiative that mandates discounts to individuals receiving drugs through state programs. You know… the people that could ACTUALLY use the discount.

Building conclusions

In my opinion, information is lacking substance from both sides. The impact is speculative, groups have ulterior motives and the information you need (what are the proposed discounts and what could they look like), is unavailable.

Even the state’s budget office released a report saying they can’t conduct an analysis.

The state’s budget office, in a legally required review of the ballot issue, said it could not conduct a complete analysis of possible savings because there are too many unknowns, including what the lowest VA price is on many drugs.

The state’s report concluded, however, that Issue 2 is unlikely to result in any savings for Ohio’s Medicaid program, which is already getting hefty discounts and makes up the majority of the state’s $2.8 billion in prescription drug spending.

There’s a desperate need for oversight on drug prices in pharma. Forcing people to choose between paying bills, food, or drugs is an insane choice. This is 2017 and we live in the most prosperous country on this planet. However, there’s no analysis suggesting that this initiative will benefit Ohioans, it may even force folks to pay raising rates in the long run from implementation to Pharma’s redistribution of cost, and eventual lawsuits.

What should you do? 

Research. Continue researching. Research more. Make your own decisions based on your own findings and understanding of the issue. Don’t get locked into warm comforting words on the ballot, don’t reach a conclusion from a single article, blog, or source. Have an informed and diverse opinion.


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