The facts about Ohio Issue 2

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CLEVELAND – You've probably seen a barrage of TV ads for months, and soon Ohioans will vote on Issue 2.

The ballot initiative limits what the State of Ohio can spend on prescription drugs, tying costs to a reduced rate paid by the U.S. Department of Veterans Affairs, generally about a 24 percent discount.

According to the ballot language, Issue 2 would change Ohio law to “require the State of Ohio, including its state departments, agencies and entities, to not pay more for prescription drugs than the price paid by the United States Department of Veterans Affairs.”

It requires the State to pay reasonable attorney fees of the four petitions who placed the issue on the ballot and limit their personal liability to $10,000 if the law is held by a court to be unenforceable. It also requires the Attorney General to defend the law if challenged in court.

The issue applies only to costs for drugs purchased by the state through a state-run program, such as Medicaid. Supporters said that amounts to medications for about 4 million Ohioans.

It does not apply to Ohioans who have private or employer-based insurance or Medicare.

The initiative is sponsored by the California-based AIDS Healthcare Foundation, whose president is Michael Weinstein. It sponsored similar legislation in California that was rejected by voters.

“It is time to do something about what is, in essence, a social justice problem because people can't afford to live,” said Tracy Jones, Midwest Regional Director for the AIDS Healthcare Foundation. “It's really your money or your life at this point.”

Jones, who is one of the four petitioners behind Issue 2, said something must be done to stop skyrocketing prescription drug costs.

“We have not put anything from the legislative perspective on the docket related to drug prices in the last ten years, but we know over the last ten years the prices of drugs have continued to skyrocket. When's the right time?” she said.

While the ballot initiative puts the responsibility on the state of Ohio to not pay more than the VA, it doesn’t require drug companies to sell the medications at a reduced rate.

Proponents claim Issue 2 would save Ohioans $400 million. However, an analysis by the Ohio Office of Budget and Management  determined it “is not possible to predict” savings because the proposal includes so many unknowns, including how the pharmaceutical industry will respond.

It concluded Medicaid savings to be unlikely because of negotiated prices and a minimum rebate set through the Affordable Care Act at 23.1 percent.

The analysis found final VA prices are often unknown because the agency further negotiates discounts through private contracts with drug companies, which opponents said makes the law unworkable.

“When you have a national problem, you have to have a national answer or solution,” said Dale Butland, Communications Director for Ohioans Against the Deceptive Rx Issue. “You can't fix this on a piecemeal state by state basis or you end up with something like Issue 2, which isn't going to help anybody and is only going to make things worse.”

The Pharmaceutical Research and Manufacturers Association, PhRMA, has financially backed the opposition to Issue 2, which has flooded airwaves with commercials urging voters to against it. However, Butland noted that about 80 organizations, including medical industry groups such as the Ohio State Medical Association, which represents doctors, also oppose the measure.

Opponents point out that the VA doesn’t purchase some medications purchased by the state, and drug makers could increase prices on those drugs to offset losses. Butland also said the state could increase co-pays to lower the state’s costs or reduce prescription coverage.

“Issue 2 would not only not fix the problem, but it would make things worse by actually raising drug costs for most Ohioans and reducing access to needed medicines for some of our most vulnerable people,” he said.

The law would take effect 30 days after being approved by voters and is expected to face legal challenges.

More information about the proposal, including arguments for and against it, can be found by clicking here on the Ohio Secretary of State website.