Confused about Issue 2?

Some information that may be helpful

Confused about Issue 2? Some information that may be helpful.

Issue 2 would require that the state, including the Ohio Department of Medicaid, pay the same or lower price for prescription drugs as the U.S. Department of Veterans Affairs — which currently negotiates drug prices 20 to 24 percent less than other agencies.”

A good place to start:
Ballotpedia: Ohio Issue 2, Drug Price Standards Initiative (2017),_Drug_Price_Standards_Initiative_(2017)
Provides a lot of straightforward information — without propaganda. Contains the full language of the initiative, which should be read carefully. Also contains important campaign finance information, arguments made on both sides of the battle, lists of endorsing individuals and groups and videos of commercials.

Ballotpedia: California Proposition 61, Drug Price Standards,_Drug_Price_Standards_(2016)
Again, basic essential information. This retrospective on the failed California Prop 61 is included here because it is virtually identical to Ohioʼs initiative, the only exception being that CA had exempted Medicaid managed care plans while the Ohio proposal does not.

Who will and won’t be affected by Issue 2?

  • Included under Issue 2: About 3 million people on Medicaid (low income and disabled). It would also affect people who have benefits through the Ohio Bureau of Worker’s Compensation, state employee retirement systems of teachers, police officers, firefighters, municipal employees and those who work in state prisons and mental health and developmental disability facilities. (A total of about 4 million people.) Conflict here could result in litigation since some groups don’t consider themselves state employees and don’t want to be covered by this initiative.
  • Not included under Issue 2: All people who have private insurance and older Ohioans who rely on Medicare — about 2/3 of Ohioans.

How much will the State of Ohio save if the issue passes?

  • No one knows. Estimates vary widely, from $164 million to $536 million per year but we don’t actually know how significant savings will be. Lacking essential data from the VA and Ohio Medicaid about discounts and even the planned Ohio PDL (Preferred Drug List) to be implemented in 2018, estimates tend to be “wish lists” rather than reasonably accurate estimates.
  • Both Ohio Medicaid and the VA receive discounts (23 vs. 24%) and rebates on drugs. Are rebate discounts significantly different? Hard to tell since, by law, the VA cannot reveal details of some negotiated rebate contracts.
  • There is also the potential for blowback from PhARMA. If Issue 2 passes, PhARMA could Increase other drug prices to cover losses. Veterans and veterans’ organizations are generally against Issue 2 because they fear VA discounts might be reduced.

Proponents and Opponents in the campaign:

  • Proponent of Ohio Taxpayers for Lower Drug Prices, as well as Prop 61, is the AIDS Healthcare Foundation (AHF) and its millionaire CEO and founder, Michael Weinstein of California. A  “grass roots” effort?
  • Opponent is Ohioans Against the Deceptive Rx Ballot (the Pharmaceutical Research and Manufacturers of America (PhARMA).

Financial backing:

  • During the first half of the year in Ohio, Opponent, PhARMA, spent $9.7 million for the campaign to defeat Issue 2. Proponent, spent $3.8 million in support, funds coming exclusively from Michael Weinstein, president of the  tax-exempt, billion-dollar AIDS Healthcare Foundation. It should be noted that 80% of AHF revenue is obtained from selling prescription drugs.
  • California’s Prop 61 had the same funders on the two sides of the issue as in Ohio.
  • Issue 2 is likely to be the most expensive ballot question in Ohio history. [The California Prop 61 battle expenditures were $100 million (PhARMA) vs. $19 million (Weinstein)].

What about public support? It affects feasibility of this issue.
A poll was commissioned by three Ohio TV stations in early August.

  • Participants reported that they would vote: “Yes” 30%, “No” 15% and Uncertain 54%

The complexity of the issue and advertising by the warring factions seem to contribute to the uncertainty.

  • 23% percent did not understand Issue 2 at all,
  • 35 percent didn’t understand it very well,
  • 35 percent somewhat understood it and
  • 6 percent reported understanding it very well.
  • If Issue 2 passes, 26 percent said their expenses for meds will remain the same, 36 percent were unsure, 15 percent said they’d pay less and 23 percent said they’d pay more.

Interesting that opponents on Issue 2 each saw the poll as encouraging!

Potential implementation problems:

  • Issue as written doesn’t deal with the mechanism of implementation, Ohio legislature will need to write rules. Since no other state has implemented this plan, there are no models, successful or otherwise.
  • As an initiated statute, Issue 2 would become a state law. This means that it can be amended or repealed by lawmakers at any time. What do you think the Ohio legislature will do to this initiative if it passes?
  • VA uses a drug formulary while Ohio does not. In fact, Medicaid programs are not permitted to use a formulary. However, starting in 2018 Ohio Medicaid will adopt a Preferred Drug List (PDL). How would differences between lists be reconciled if Ohio is to base its discounts on those of the VA? Unless both Ohio and the VA adopt a policy of transparency in regard to lists, discounts and rebates, how would this be accomplished? What about pediatric drugs? No kiddies in the VA system.
  • Legal challenges are likely if Issue 2 passes. As written, the Ohio Attorney General would be obligated to defend the law. It would also require the state to pay the proponents “reasonable” legal expenses. If the court rules the issue unenforceable, the petitioner’s obligation would be capped at $10,000. Thus, the proponent has relatively little to lose while Ohio taxpayers could be on the hook for substantial legal fees.

Are there alternatives?
Check the references to California’s SB17 in Resources for one approach to curtailing PhARMA’s hegemony. It appears to be more workable and straightforward. SB17 arose from the legislature and was passed in spite of a vigorous campaign against it by PhARMA. Support included even some Republicans and Chambers of Commerce.

Some Background Resources
(Links can be copied and pasted in your browser window or titles entered in Google.)

Beacon Journal editorial board: What would Issue 2 save? It’s sketchy

Accepting current estimates are an article of faith. Interesting that, thus far, no major Ohio newspaper has endorsed Issue 2, whether liberal or conservative in leaning.

Drug Price Control: How Some Government Programs Do It

Looks at relative government drug discounts, including VA vs. Medicaid. 

Drug-price ballot failure in California could mean bad prognosis in Ohio

California, a more liberal state failed to pass essentially the same bill. Important to consider factors involved in failure other than proponents being simply outspent.

Ohio drug-price ballot issue likely to be costly, contentious

The C.E.O. of H.I.V.

Per the NYT: “Michael Weinstein’s AIDS Healthcare Foundation treats an enormous number of patients — and makes an enormous amount of money. Is that why so many activists distrust him?” An important read to gain a better understanding of the man behind (and sole financier of) both California Prop 61 and Ohio Issue 2.

Poll: Most Ohioans unclear about prescription drug Issue

Will voters be able make a truly informed decision or vote on the basis of misunderstanding and propaganda?

What can we learn from California’s failure to pass Prop 61 and its recent success in passing SB 17, which addresses in a direct way the problem of transparency in drug pricing (without problematic reference to VA or other state agencies)?

Why California’s Proposition 61 Was a Bad Idea, Y. Tony Yang, ScD, LLM, MPH,
Brian Chen, JD, PhD, Charles L. Bennett, MD, PhD, MPP
Well worth reading! A professional assessment of the weaknesses of these initiatives.

Fate of controversial California drug price bill up in air

California’s SB 17 is a legislative alternative that has garnered support from community groups and even some conservative politicians. It is aimed at increasing transparency in drug pricing and could become a national model to fight price gouging. Similar, although less comprehensive, laws already exist in Nevada, Vermont and Maryland. 

The latest news!: SB 17 passed in spite of rigorous opposition from Big PhARMA!

California passes prescription drug pricing transparency bill

Patriots for Change, Chagrin Falls, Ohio
Prepared by Lynne C Rustad, PhD, Health Care Reform Chair          Questions?


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