The Ohio Drug Price Relief Act

May 24, 2017

 

This fall Ohio will be voting on a very special ballot measure: the Ohio Drug Price Relief Act. This initiative would require the state and associate programs to pay no more for prescription drugs than the U.S. Department of Veterans Affairs pays, a substantial discount. The Department of Veterans Affairs has the power to negotiate drug prices with companies and normally pays anywhere from 20 to 24% less than other agencies for those drugs. Such a measure could benefit millions of Ohioans, but it faces fierce opposition from pharmaceutical companies, businesses, and other organizations. The campaign is expected to be long and costly.

 

The group that put the measure on the ballot, Ohio Taxpayers for Lower Drug Prices, says the initiative “is good for every Ohioan” and “if voters approve this, it would not only lower prescription prices, it would save the state of Ohio a minimum of $400 million and up to $750 million a year for prescription drugs that they presently buy.” If passed, almost a third of Ohio’s population would benefit from this proposition. Three million people receive health care through Ohio’s Medicaid program, and hundreds of thousands receive coverage through the state government, higher education, and the Bureau of Workers’ Compensation. While the act would only apply to prescription drugs purchased through state programs and by state employees and retirees, supporters hope that it would have a wider impact and help cut drug prices for all customers. All in all, the measure would directly help about 4.15 million Ohioans.

 

From the start this initiative has encountered opposition and controversy. Supporters are being funded by the California-based AIDS Healthcare Foundation, which supported a similar 2016 California ballot initiative to reduce drug prices. However that measure received 47% of the vote and was defeated. Drug companies spent $109 million to defeat the proposal (supporters of the proposals spent $19 million) and they are ready to spend money to defeat this proposal as well. The Pharmaceutical Research Manufacturers of America, a trade association that includes most drug companies, is leading the charge and claims to have assembled a formidable coalition.

 

In 2016 Americans spent $450 billion on prescription drugs. Skyrocketing costs have put a strain on state health care budgets, as we observed in our blog post on Sovaldi and effects on consumers. Drugs have become increasingly unaffordable for ordinary Americans, who are increasingly clamoring for a solution. Increasing prices have also become a headache for officials and policymakers; a number of states have proposed or enacted laws to increase transparency and accountability in drug markets, and to slow the rate of increase.

 

The Ohio Legislature considered this bill to reduce drug prices. As an initiated statute the General Assembly had to consider it before it could be submitted to the voters. However they ultimately did nothing, and drug companies challenged the legitimacy of many of the signatures gathered to support the measure. They got thousands of signatures thrown out, but supporters of the measure gathered new ones, and now it is headed to the ballot and will be voted on November 7th.

 

Ohio should prepare for a lengthy fight over reducing drug prices. They should consider the price increases of the last few years and ask: can the companies that have reaped enormous profits from price gouging be trusted?

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