Drug Price Relief or Deceptive Rx? Ohio’s Issue 2 Divides Opinion

By Breanna Beers

The November 7 Ohio general election is approaching, and few ballot items have incited as much controversy as Ohio Issue 2. Commonly referred to as the Drug Price Relief Act — or the Deceptive Rx Ballot Issue, depending on the speaker — this bill would mandate that no state-run agency could spend more on prescription drugs than the U.S. Department of Veterans Affairs (VA), which receives a federally mandated 24 percent discount.

Proponents of this bill hope to reduce the burden of inflated medical costs. If state programs receive reduced prices on prescription drugs, a portion of the Ohio budget will be freed up to invest in other programs or to lower taxes on citizens.

Dale Butland, Director of Communications for Ohioans Against the Deceptive Rx Issue, believes that Issue 2 would raise the cost of prescription drugs rather than lower them.

“If you tell a company…that it has to sell its product to a certain segment of the population at a low price, what happens to the prices for everyone else who is not covered under that edict? That’s called cost-shifting,” Butland said. “It’s not some devious scheme that’s been cooked up by the drug companies: it is basic economics. There’s no such thing as a free lunch. Somebody always pays, and in this case, it’ll be people who aren’t covered by that initiative.”

Proponents of Issue 2 disagree, saying that this initiative would lower drug prices even for Ohioans not enrolled in a state healthcare program such as Medicaid. They argue that once private insurance companies and the general public see the savings generated by this initiative, they will demand that the drug manufacturers offer them the same discounts.

However, Butland believes that in addition to raising the costs of prescription drugs for Ohioans not covered by state programs, Issue 2 could result in higher expenses even for patients who are covered by the initiative. According to Mr. Butland, Issue 2 has no power to regulate what drug manufacturers or pharmaceutical companies actually charge for prescription medications: it only limits what the state itself can spend.

“So if the drug company simply says, ‘Nope, we’re not going to sell it to you at that price,’ then the state can’t buy the drug unless it can figure out a way to get its cost down to the VA level,” Butland explained. “One way might be to increase co-pays for people who get their drugs through the state programs, because that would reduce the state’s cost….or maybe the state would say, ‘Well, we have to drop coverage for certain drugs altogether.’”

Dr. Mark Sweeney, the Dean of Pharmacy at Cedarville University, also expressed apprehension about the unintended repercussions that Issue 2 could bring about. Specifically, he expressed concern that pharmacies that buy medications from drug manufacturers would no longer be able to cover their expenses and therefore have to turn away patients.

“Already in the state of Ohio in high-Medicaid populations, there are pharmacies that just close the doors,” Sweeney said. “So you could argue all you want that they should serve those patients, but when you’re losing money off every prescription, then it’s time to close your doors.”

Sweeney also expressed concern that since the costs of drugs are ever-shifting — much like gasoline prices — pharmaceutical companies could increase the baseline price for medications. While the VA would still receive a 24 percent discount, the increased standard price would mean the VA would pay more, the state would see no reduction, and everyone else would see a significant increase in costs.

Questions have also been raised regarding how much of a positive difference Issue 2 could make, since the often-quoted $400 million that Ohio could save if the state received the VA’s 24 percent discount does not take into account the federally mandated Medicaid discount of 23.1 percent. Critics say this rebate negates any potential benefit from Issue 2.

Among the most prominent concerns of the proposed initiative is a clause in the final section, which states that “if any provision of this Act is challenged in court…the Proponents shall be indemnified (compensated) by the State of Ohio for their reasonable attorney’s fees and expenses incurred in defending the validity of the challenged Act.”

In other words, if any part of Issue 2 is challenged in court by drug manufacturers or any other opponents — as this hotly contested bill almost certainly will be — the burden falls upon Ohio taxpayers to pay for its defense. Critics point out that the proponents of this bill have high potential to benefit financially if it is passed, and taxpayers have a lot to lose.

The healthcare and pharmaceutical industry is a complex one — too complex, said Sweeney, to be solved with this one initiative.

“I’m not disagreeing that drug prices need to be addressed,” Sweeney said. “But throwing something on the ballot for the Medicaid and the state groups, that’s not the solution — because it’s just not possible to ‘fix’ these types of scenarios through a ballot initiative.”

Breanna Beers is a freshman Molecular Biology and Journalism double major and an off-campus news writer for Cedars. She loves exercising curiosity, hiking new trails, and quoting The Princess Bride whether it’s relevant or not.