What is the Ohio Drug Price Relief Act?

It is a measure on the November 2017 Ohio ballot that will make a start on getting the exorbitant prices of prescription drugs under control – and save Ohio taxpayers hundreds of millions of dollars.

How would it work?

If voters pass the measure, the State of Ohio would be required to pay no more for prescription drugs than is paid for the same medications by the U.S. Department of Veterans Affairs (VA). It could also negotiate for prices below those paid by the Department. This would encompass all drug purchases in which the State is the ultimate payer, whether it purchased the drugs directly from the pharmaceutical companies or not.

Why use the Department of Veterans Affairs as the standard for drug pricing?

Because the Dept. of Veterans Affairs (VA) pays on average 20-24% less for drugs than what the drug companies regularly charge their customers. This is possible because the VA is empowered by law to use its bargaining power to negotiate the prices of drugs it uses to help veterans.

With the VA paying the lowest domestic price for prescription drugs, it only makes sense that those prices should be Ohio’s standard for what it pays. Finally, the Veterans Healthcare Act of 1992 – approved by Congress and signed into law by President George H.W. Bush – places common-sense limits on how much the drug companies can increase the price of their drugs each year.

Who will benefit from the Ohio Drug Price Relief Act?

Millions of Ohio taxpayers would benefit. The state could save hundreds of millions of dollars on drug purchases – freeing up funds to redirect to other needs, including healthcare improvements. In addition, this proposal could ultimately force the drug companies to moderate the prices they charge privately insured consumers for their drugs. Once insurance companies and the general public see the Ohio drug price plan working, they’ll want and demand the same good deal for themselves.

More specifically, the Ohio act would affect the price of drugs used to treat 3.7 million Ohio Medicaid recipients; Ohio workers receiving compensation for injuries or illnesses suffered on the job (225,000 patients); Ohio state government employees (134,000); Ohio children receiving vaccinations (67,000); and Ohio inpatients of the OSU Wexner Medical Center (41,000).

How much money will Ohio save if the Drug Price Relief Act is approved?

The State of Ohio purchases nearly $2 billion of prescription drugs each year.  With an estimated savings of around 24%, the best estimate is that the measure will save about $400 million a year for Ohio taxpayers.

What about prescription drugs for children and other drugs not purchased by the Veterans Affairs – will they be covered by the Drug Price Relief Act?

Here’s the facts: The Relief Act requires Ohio state government agencies – that buy about $2 billion of prescription drugs every year – to pay no more for a given drug than what the VA pays for the same drug. If a particular drug is not purchased by the VA, including drugs prescribed for children, then Ohio’s agencies will still be able to purchase that drug, just not at a VA price (because none exists). Makes sense.

The drug industry and its supporters have circulated the false rumor that children will be hurt by the Relief Act, that children won’t get the prescriptions they need if the act is approved. This is absolutely wrong and a vicious scare tactic.

Aren’t our nation’s leaders talking about controlling drug prices?

You’re right about that. But the drug industry has powerful friends in Washington, D.C. who have been able to quash the slightest hint of reform. Ohio voters – by supporting the Drug Price Relief Act – can send a powerful signal that a bellwether state is ready to tackle the issue of drug industry price-gouging head-on. When Ohio speaks, the nation will listen. Ohio can make it happen.

What’s the evidence that Ohio is ready to support drug price controls?

The petitions to put the Ohio Drug Price Relief Act on the ballot were signed by 194,375 Ohio voters upset and frustrated by the exorbitant prices they, as Ohio taxpayers, pay for the prescription drugs purchased by state agencies to treat nearly one out of every three Buckeye State residents. On Sept. 9, 2016 the Ohio Supreme Court overrode the objections of drug industry lawyers, ruled the voter petitions were valid and okayed placement of the proposed act on the Nov. 2017 ballot.

Won’t the initiative result in drug companies pulling medications from the Ohio market, or limiting access to high-cost drugs, and ultimately hurt – not help – Ohio residents who need their medications?

No. This is an outrageous scare tactic used by the drug companies whenever there’s even a hint of reining in their outrageous prices. Ohio represents a very large market for the multi-billion-dollar pharmaceutical industry. The Ohio market is simply too big and too lucrative for the drug industry to ignore or to retaliate against. It would be a public relations disaster if nothing else.

In addition, the drug companies already sell drugs to the Dept. of Veterans Affairs at the lower prices negotiated by that agency. Have they gone broke? No, they are recording record profits, and their executives are raking in millions. In 2015, the top ten drug company executives received $327.4 million in compensation while the average American household, with a median income of $56,000, struggled to pay for its prescription drugs.

Won’t the drug companies have trouble in this campaign defending or explaining their price-gouging to the public?

Yes! Witness the public outrage at Turing Pharmaceuticals executive Martin Shkreli, who raised the price for the generic drug his company had acquired by 5,500% overnight, and was quickly labeled “The Most Hated Man in America.”

And then there was the EpiPen scandal. When Mylan Inc., the maker of the EpiPen, the device millions of parents have relied on to protect their kids from dangerous allergies, raised its prices by 500 percent to $600 for two injectors, the company faced a hailstorm of criticism. Mylan CEO Heather Bresch was publicly raked over the coals when she was forced to testify before Congress. Recently CVS, reacting to the Epi-Pen debacle, announced it would be selling a competing allergy auto-injector in its stores for $109.99. The lesson we learn from all this is that outraged consumers can have a big impact on drug industry price-gouging.

According to the results of a Kaiser Health Tracking Poll released in June of last year:

  • 73% of respondents said drug prices are “unreasonable”
  • 74% blamed inflated pharmaceutical industry profits
  • 54% cited marketing and advertising costs
  • 53% said there are not enough limits on pharmaceutical prices
  • Only 12% said there was too much government involvement in regulating the drug market

The American public is deeply upset by drug price excesses.

Now Ohioans need to show the way out of this mess by supporting the Drug Price Relief Act.

Would passage of the initiative jeopardize the rebates Medicaid and other programs already receive from pharmaceutical companies, thereby putting poor people at risk?

No. This initiative will prevent Medicaid from paying exorbitant drug prices, saving 100s of millions in taxpayer dollars that can be spent on care for seniors, veterans, people with disabilities, and families with low incomes. Low-income people are at risk at dying of treatable diseases because they can’t afford medicine under our current distorted system or – in order to save money and make their prescription last longer – are not taking the doses prescribed.

Seven states—Delaware, Louisiana, Maine, Maryland, Montana, New York and Vermont—have limited the amount private patients pay for prescription drugs. There is also a growing call to let the federal Medicare system negotiate drug prices. There is a national movement building. The industry knows if Ohio voters fight back against drug price gouging, other states will follow. This is why they are ready to spend millions to stop this vital initiative.

Who is funding this measure?

The AIDS Healthcare Foundation (AHF) is the largest provider of HIV/AIDS medical care in the U.S, and it has service centers in Columbus and Cleveland. AHF took the lead in funding the collection of signatures to place the Ohio Drug Price Relief Act on the ballot, and it is committed to significantly fund the campaign to get the Ohio measure approved by voters. AHF will not benefit directly from passage of the Ohio Drug Price Relief Act. The non-profit’s interest is to make sure critical drugs are accessible to those it serves. Its core mission of service to the suffering is now seriously complicated by drug industry price-gouging.