OPA urges opposition to Issue 2, the deceptive drug pricing ballot initiative

The Ohio Pharmacists Association (OPA) has joined a growing coalition of stakeholders, experts, and patients in opposition to Issue 2 the so-called “Ohio Drug Price Relief Act” - a proposal (referred to as an initiated statute) that will be on the November 7, 2017 ballot in Ohio.

As part of the Ohioans Against the Deceptive Rx Ballot Issue coalition, OPA will be working hard to defeat a measure that could have serious negative consequences for pharmacies, payers, employers, veterans, and patients.

The "Ohio Drug Price Relief Act" is being pushed by controversial California activist Michael Weinstein, and would prohibit Ohio’s state government from paying any more for prescription drugs than the lowest price paid by the United States Department of Veterans Affairs.

A very similar proposal, “Proposition 61,” was soundly defeated in California last year, and was opposed by more than 100 different health organizations, civic organizations, veterans groups, taxpayer organizations, business groups, and unions. It was also opposed by nearly every major newspaper—liberal, conservative and moderate alike—in the state of California.

It's no secret that OPA has been very outspoken about the problems with prescription drug pricing (see here, here, here, and here). We've spent a great deal of time working with reporters and lawmakers across the country to reform a broken system that rewards big supply chain middlemen and results in higher drug costs for employers, taxpayers, and patients. We continue to advocate for legislation to bring about increased transparency and competition into a system that is incredibly secretive and anti-competitive.

Unfortunately, the inaccurately dubbed "Ohio Drug Price Relief Act" will not only fail to accomplish its intended goals, but if approved, the measure could actually result in major price increases for millions of Ohioans.

Specifically for pharmacists, this measure is extremely concerning due to its bad wording and seemingly poor understanding of how prescription drugs are bought and sold. While Issue 2 would prohibit government programs from paying any more than VA prices for prescription drugs, there is no requirement that pharmacies be able to buy those drugs at the VA rates as well. So pharmacies would be buying drugs at their current commercial rates from their wholesaler, but only receive a fraction of the reimbursement that they would normally receive.

Even if the measure were workable (which it likely isn't, due to VA prices being confidential), pharmacies could ultimately be the biggest losers in the equation, as they would ultimately shoulder the burden of the cuts. And while pharmacies would be getting dramatically under-reimbursed, pharmaceutical companies and pharmacy benefit managers (PBMs) would be largely unaffected and free to perpetuate the current model that has resulted in the enormous price hikes we are seeing today.

Furthermore, there is no guarantee that the VA rates will remain what they are today. Currently, pharmaceutical companies give steep rebates and discounts to the VA program. If all of a sudden, those VA rates are used as a benchmark for other programs, then pharmaceutical companies could just end the discounts for the VA, and charge everyone higher prices.

Additionally, this initiative could restrict access to medication. The VA program has its own unique formulary, with special rebates given in return for preferential treatment or exclusion of certain drugs from that formulary. The nature of these rebate agreements for the VA would mean that patients could have decreased access to medications if a particular medication is not included within the VA’s formulary.

There is also no requirement that pharmaceutical companies charge the same prices to all. So if the government and VA were to enjoy all the major discounts that are being sought by this ballot measure, pharmaceutical companies could just raise the prices for everyone else to offset those losses. This would mean that the government would get the benefit, but working Ohioans would be stuck with the bill.

A bit more simply, imagine if the government required Starbucks to give a 25% discount to a third of their customers. What would Starbucks likely do? They could refuse to sell coffee to the people who are mandated to get the discount. They could raise the cost of coffee for two-thirds of their customers who don't get the discount. They could just raise the list prices of their coffee entirely so that the 25% discount meant nothing to their overall bottom line. Keep in mind, that under this scenario, all of these premises would apply to pharmacies and prescription drugs. Building on this example, nothing actually lowers the overall price of coffee— just like under Issue 2, nothing actually lowers the overall price of prescription drugs. In fact, the likely outcome is either a loss of access, or the elevation of prices for a majority of consumers. No matter how you slice it, Issue 2 is fundamentally flawed and incredibly reckless.

For a complete set of fact sheets on this measure, click here. For a comprehensive analysis of the proposal from Vorys Health Care advisors, click here.

“The members of the Ohio Pharmacists Association know all too well of the struggles patients have in affording their medications," said OPA Executive Director Ernest Boyd. "As an organization, we have spent years trying to address and change an outdated, opaque drug pricing model that incentivizes members of the medication supply chain to drive up the cost of prescription drugs. Through our work, we know there is a critical and immediate need to implement responsible solutions to lower drug costs – unfortunately, this initiated statute not only misses the mark; but it actually could end up raising drug prices. Ultimately, despite the stated intentions of its proponents, the proposal is ill-conceived, poorly crafted, unworkable, and could result in less access and increased costs for millions of Ohioans – including the very patients the proponents claim to want to help. We strongly urge Ohioans to vote against this proposal.”

Lastly, another provision would give the ballot issue’s four named co-sponsors an unprecedented right to intervene—at taxpayer expense—in any post-election legal challenges that may be filed against the initiative or its implementation. This means that if there's a lawsuit — which is highly likely — taxpayers would have to foot the bill for the proponent's legal fees.

To read through the summary and full text of the proposal from the Ohio Secretary of State's Office, click here. To learn more about the language itself, visit WhatIsIssue2.com.

For a recent opinion piece authored by OPA board trustee Deb Randall, click here. Also, for a recent hour-long live discussion on Issue 2, featuring OPA government affairs director Antonio Ciaccia, OPA members Paul & Brad White, click here.

OPA is proud to join the Ohio State Medical Association, Ohio Nurses Association, Ohio Osteopathic Association, Equitas Health, National Alliance on Mental Illness of Ohio, Drug Free Action Alliance, Ohio Chamber of Commerce, Ohio Manufacturers’ Association, Veterans of Foreign Wars, National Community Pharmacists Association, and many other trusted organizations in opposition to the ballot proposal. Check out a recent campaign ad featuring OPA among three core health care associations opposing Issue 2:

Also, check out OPA Past Presidents Steve Burson and Jeff Bartone in a recent ad featuring a myriad of health care professionals united against Issue 2:

There are better ways to resolve our state's woes when it comes to affording prescription drugs. The "Ohio Drug Price Relief Act" should be wholly rejected by voters, and OPA urges a NO vote on the measure.

Find out the facts at http://www.deceptiverxissue.org/.

Additional coverage and resources:

Pharmacist Ray Carlson interviewed by Louie B. Free on Issue 2, PBMs; Part 1, Part 2 - Facebook Live, 11/2/17 *OPA Past President Ray Carlson interviewed

Why Ohio’s medical community says vote no on Issue 2 - USA Today, 10/30/17 *OPA opposition mentioned

Editorial: Vote 'No' on Issue 2 - Sandusky Register, 10/30/17

Locals: Lower drug prices good, Issue 2 not so much - Bellefontaine Examiner, 10/28/17 *OPA member Jeff Holycross interviewed

Editorial: What if Issue 2 passes? Get ready for more uncertainty and much litigation - Akron Beacon Journal, 10/27/17

Editorial: Yes on Issue 1, No on Issue 2 - Newark Advocate, 10/27/17 *OPA opposition mentioned

Editorial: Voters should say no to Issue 2 - Star Beacon, 10/24/17

Health Matters radio show: Issue 2 and Antonio Ciaccia, Ohio Pharmacists Association - Health Matters, 10/23/17 *OPA members Paul & Brad White interview OPA Government Affairs Director Antonio Ciaccia

Why doctor and hospital groups are fighting a measure to rein in drug costs - STAT News, 10/19/17

Editorial: Ohioans should vote no on Issue 2 - Columbus Dispatch, 10/18/17