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The League of Women Voters of Metropolitan Columbus

News

Issue 2 Explanation / Pros & Cons Now Available

Friday, Sep. 8, 2017

The League of Women Voters of Ohio has issued a nonpartisan explanation of Issue 2.

Issue 2: The Ohio Drug Price Relief Act 

Will appear on the ballot as “STATE ISSUE 2:  To require state agencies to not pay more for prescription drugs than the federal Department of Veterans Affairs and require state payment of attorney fees and expenses to specific individuals for defense of the law”

Prohibits the state from buying any prescription drug from a drug manufacturer for a price over the lowest price paid for the drug by the United States Department of Veterans Affairs (VA).

(Proposed by Initiative Petition)

A YES vote means approval of the Act.

A NO vote means disapproval of the Act.

If approved, the proposed Act will take effect immediately after Election Day.

League Explanation of Issue 2:

The Ohio Drug Price Relief Act

Issue 2 would limit the amount the state and state agencies could pay for prescription drugs.This Act is designed to restrict the amount that any state agency could pay for drugs, tying it to the price paid by the VA. The VA negotiates drug prices with companies and typically pays 20 to 24 percent less than other agencies for prescription drugs. Specifically, it would forbid state agencies to enter into any purchasing agreement with drug manufacturers unless the net cost of the drug is the same or less than that paid by the VA.

State agencies would not be allowed to pay more than the VA pays for a particular medication. These state agencies include, but are not limited to, the Ohio Department of Aging, the Ohio Department of Health, the Ohio Department of Insurance, the Ohio Department of Jobs and Family Services, and the Ohio Department of Medicaid (the program for people with low incomes or disabilities).

In addition, Issue 2 requires the state to pay sponsors’ attorney fees and expenses. It gives the sponsors, the four individuals responsible for circulating the petition to place the issue on the ballot, the right to defend legal challenges to the law. It will require the Attorney General to defend the law if challenged in court. It also says that should the court find Issue 2 is unenforceable, the petitioners would be fined $10,000.

The bill will only impact those who receive drugs paid for by the State, not those with any other type of coverage. If adopted, the proposed statute would affect only those associated with the above mentioned state agencies - roughly 4 million Ohioans. The Act would not apply to those who use private insurance, Medicare, or other non-state-provided coverage - approximately 7 million Ohioans.

Pros:

  1. Drug costs are the main driver of rising health care cost.  There is an urgent need to control costs while maintaining access to needed medications.
  2. Too many Ohioans must choose between the basic necessities of life and paying for their medications. 
  3. There is an indirect benefit to taxpayers as the state would save an estimated $536 million per year on drugs. This could free up some substantial money that the state could use for other programs.

Cons:

  1. The Act does not define some important terms, such as “drug,” “state,” “ultimate payer,” and “net cost.” 
  2. The Act does not address pricing of drugs that are not purchased by the VA and creates costly, complex purchasing arrangements.
  3. Pharmaceutical companies might respond to passage of the Act by a) negating existing discounts and rebates, b) raising prescription prices charged to non-covered entities and individuals, and/or c) raising prices charged to the VA.

 

PROPONENTS: Yes on Issue 2, also known as Ohio Taxpayers for Lower Drug Prices, is leading the campaign in support of the initiative.

OPPONENTS: No on Issue 2, also known as Ohioans Against the Deceptive Rx Ballot Issue, is leading the campaign in opposition to the initiative

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Further Information: 

A similar proposition (Proposition 61) appeared on the California ballot in 2016. It was defeated. More information on California Proposition 61. 

Analysis from Case-Western Reserve University professor Maxwell J. Mehlman commissioned by Yes on Issue 2, the campaign supporting the proposal. 

Analysis from Vorys Healthcare Advisors commissioned by Ohioans Against the Deceptive Rx Issue, the campaign opposing the proposal