Election 2020

Ohio Issue 2 Won't Result in Lower Drug Prices for Most, and Could Raise Prices for Many

(Getty Images)

For months Ohioans have been bombarded with ads—TV, print, radio—about the Drug Price Relief Act, more commonly known as Issue 2. The brainchild of Michael Weinstein, the controversial head of an AIDS special interest group, Issue 2 promises to lower drug prices for Ohioans. The fantastical claims, however, are little more than wishful thinking—the initiative could, in fact, result in higher drug prices for a majority of Ohioans and lead to a reduction in the availability of drugs for others.

The issue will be on the November ballot as an “indirect initiated state statute.” In other words, by a vote of the people, supporters of Issue 2 hope to subvert the legislature and change the law. If passed, the law would:

  • 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.
  • Establish that the individual petitioners responsible for proposing the law have a direct and personal stake in defending the law; require the State to pay petitioners’ reasonable attorney fees and other expenses; require the petitioners to pay $10,000 to the State if the law is held by a court to be unenforceable and limit petitioners’ personal liability to that amount; and require the Attorney General to defend the law if challenged in court

With a multitude of competing claims inundating the airwaves, Ohio voters are understandably conflicted about the issue, evidenced by a poll showing that 54 percent are undecided. While everyone would like to see lower drug costs, the price for this initiative may be higher than many voters realize.

Here’s why Ohioans should vote  no on Issue 2:

1. Most Ohioans won’t save money

Supporters claim that the initiative — which is supported by some of the most liberal Democrats and activist in the country, including Sen. Bernie Sanders — will save Ohioans money on prescription drug costs by forcing state agencies to purchase drugs at the same discounted rate the VA receives. Analyses of the issue have been scant, in part, because the VA rates for drugs are not available for comparison. And while the state would be required to purchase drugs at the VA price, the law wouldn’t require drug companies to sell them to the state at those discounted prices. It’s entirely possible that state programs will see drug shortages and restrictions in the number of drugs doctors can offer to patients dependent on state programs.

So who might this law help? The law itself would only apply to Medicaid patients and others who benefit from state-funded programs, e.g. state employees who receive state-purchased drugs, prisoners, and individuals in other state-run programs. Medicaid recipients, however, would benefit little if at all, because they already have miniscule co-pays for prescriptions ($2-$3).

Former Ohio Medicaid director John McCarthy said there could be other consequences as well. “What will happen is pharmacies will stop being providers in the Medicaid program,” he said. “That will cause people to lose access to the drugs they need. Those that may lose access include the elderly, disabled, and children. If they are unable to obtain their prescriptions easily, compliance will be reduced which in many cases leads to worse health outcomes or even worse death.”

Privately insured individuals and the uninsured would not benefit from the discount drug prices, nor would Medicare recipients or veterans because they are covered under federal, rather than state programs.

2. Michael Weinstein, the initiatives most prominent supporter, has a history of deceptive and dishonest activities

Weinstein and his AIDS Healthcare Foundation (AHF) tried to pass a nearly identical ballot issue last year in California — Proposition 61, which voters rejected. The AHF has been accused of “fiscal mismanagement” for charging “too much to care for indigent patients” by Los Angeles County auditors. In 2014 the auditors recommended that AHF be placed into the county’s Contract Alert Reporting Database. The group has been audited multiple times in Los Angeles County as a result of $6.1 million in questionable payments or charges.

Weinstein and the AHF also have a history of sending out deceptive mailers that dishonestly use government officials’ images, implying their endorsement. Los Angeles Mayor Eric Garcetti accused AHF of a “dirty trick” for a mailer related to Proposition 61 last year that used his image and suggested he supported the issue. The group also sent mailers disguised as eviction notices from the Los Angeles County Sheriff’s Departement. The department was understandably outraged and demanded the group cease and desist. A tenants’ rights group called the ads “irresponsible and outrageous.”

The AHF also paid for the endorsement of a veterans group during its campaign for Proposition 61. Vote Vets, which has been criticized in the past for supporting progressive causes under the guise of support for veterans, received $50,000 for their endorsement. Notably, they were the only veterans group to support the initiative.

Weinstein and other supporters are now using the same dirty tactics in Ohio. Two Cleveland City Council members objected when an announcement was made by the Yes on 2 campaign saying they supported Issue 2. Both said they are undecided and have not announced support for the issue. Doug Willard, Issue 2’s spokesman, called the announcement a “mistake.” And lawyers for the Cleveland Clinic sent a cease-and-desist letter to the campaign after they used a quote and the image of Clinic president and CEO Toby Cosgrove in a mailer sent to two million people, falsely implying his endorsement.

3. The proposed law is vaguely worded

There is no framework for how this law would work in practice. Most laws relating to health care issues are complicated and carefully worded so as to eliminate ambiguity. Issue 2 reduces a complicated legal matter to a few paragraphs. While the law mandates that the state pay for drugs at VA rates, there’s nothing in the text that explains how that will be accomplished. The state can’t force drug manufacturers to sell their products at reduced rates, but supporters seem to assume that they will cooperate with the price controls. That’s a risky proposition. Even if the manufacturers do agree to discounted prices, they’ll have to make up that difference elsewhere — most likely by raising drug prices on those who are privately insured or uninsured or by reducing efforts to bring new drugs to the market.

Barbara Edwards, who served as Ohio’s Medicaid Director for eight years, warned that Issue 2 could backfire: “From an administrative perspective, this is something that cannot be implemented,” she said. “The challenge of trying to follow the instructions in this proposal would create great disruption in public programs and could actually end up harming the people it was intended to help.

4. Issue 2 would require the state to pick up the costs for legal actions related to the law — for both sides

Issue 2 includes an unprecedented provision that would give its sponsors — namely, Michael Weinstein—  a special legal right to intervene in challenges to the law. Ohio taxpayers would be required to pay his attorney fees, win or lose. It also requires Ohio’s attorney general to “defend the law if challenged in court,” which means that Ohio taxpayers will have to foot the bill for both sides of the lawsuits that will inevitably ensue with the passage of this law. Weinstein’s organization, it should be noted, has filed 52 lawsuits against government agencies in seven states, including Ohio.

 

5. Ballot initiatives are a terrible idea

While the Ohio Constitution has provisions for voter-driven ballot initiatives that can change both the Ohio Revised Code and the Ohio Constitution, they’re rarely a good idea. Relics of the Progressives Era, these initiatives are premised on the idea that direct democracy is sometimes preferable to the normal representative legislative process. Voters who are unhappy because they can’t get the legislature to take up one issue or another have the opportunity to collect enough signatures to get an issue on the statewide ballot. While that idea sounds good on paper, the debates surrounding these issues are usually dominated by special interest groups that rely on massive infusions of cash from deep-pocketed supporters or detractors, many of whom don’t even live in the state.

In theory, an informed electorate would research the issues and give careful consideration to the complicated questions on the ballot. In practice, that is rarely the case. Often the issues are so complicated that voters are unable to adequately determine whether they should be approved. Instead, special interests on both sides manipulate public opinion with emotional ads designed to tug at the heartstrings. The side that can do this most effectively usually wins, regardless of the merits of the initiative.

Issue 2 is a bad deal for Ohioans. The purported benefits to those dependent on state programs is likely overblown, and it won’t do anything to bring down drug costs for the privately insured or uninsured. The poorly written law would put taxpayers on the hook for untold millions in legal expenses and could make things worse for the most vulnerable in the state.