Ohio Ballot Issue 2 – The Ohio Drug Price Relief Act

– Editorial –

shutterstock_525092596.jpgThis is difficult for me.  Normally I like to post articles and commentary on things I believe I understand that I think others might not quite as well, with the intent of educating some minds along the way.  Hopefully there is some educational value and it’s not just a self-centered ego booster.  But in either case – this issue puts me in a little different place.  Can somebody else please help me better understand Issue 2?

There is obviously something I’m missing.  On its face, if passed, Issue 2 would prevent the State of Ohio – including state run programs such as Medicaid, the state employee health plans, and others – from paying more for prescription drugs than what is paid by the U.S. Veterans Administration.  Sounds pretty simple, and like something that most folks other than PhRMA (the Pharmaceutical Research & Manufacturers of America) would support.  And in fact, supporters of Issue 2 include, among others, the  AIDS Healthcare Foundation, the Ohio Academy of Family Physicians, and National Nurses United, to name a few.

So who doesn’t want the State of Ohio to save money on prescription medication, and / or why do they say the ballot initiative is misleading?  It’s not hard to find the names – and there are MANY – who have signed on in opposition to Issue 2.  Some include:  the Ohio Nurses Association, Ohio State Medical Association, Ohio Hospital Association and other statewide medical associations too numerous to name.  Then there are the Chambers of Commerce – nearly all of them, The Buckeye Institute, Ohio Fire Chiefs Association, and virtually every War Veterans organization you can name.

In some instances I can understand the opposition.  PhRMA’s stance is pretty obvious – nobody wants to see price controls on their products.  The Veterans organizations – they might feel like they’re getting a pretty good deal right now, and if everyone hitches their wagon to the good deal they are getting, they are probably more subject to future price increases so pharmaceutical companies can get more from everyone.  But aside from a couple of organizations who have a real dog in the fight, I’m still not clear on specifically why the issue is so heavily opposed.

Opponent’s arguments against Issue 2 seem to consistently go something like this:

“Experienced experts agree:  the ballot proposal won’t lower health care costs for Ohioans or save money for taxpayers.  In fact, it could lead to increased costs for the majority of Ohioans, including seniors and veterans, while reducing patients’ access to needed medicines.”

Or,

“[The measure] would dramatically disrupt the system that serves those who depend on state programs for medicine, and the vague nature of the proposal will mean years of red tape and litigation, as public policy officials and impacted agencies struggle to figure out how it can be implemented.”

Okay…so where’s the rest of it?  How would it lead to increased costs?  Why would there be disruption?  Why would there be that much trouble trying to figure out how to implement it?  Just continue to do what you do and pay no more than VA prices for it.  I’m sure it’s not that simple, but I must admit – it also doesn’t sound that difficult.  From everything I’ve been able to read it sounds more like changing the prices on a menu, not changing the fool choices, ordering new ingredients and hiring an entirely new kitchen staff, which is more like what the opposition would lead you to believe.

Again, it’s clear I’m missing something. Personally, I’m against price-fixing.  I almost always favor a fair and open economic model to determine a price.  I also believe there would be cost shifting to the private market to make up for the lost revenue to the pharmaceutical companies – similar to what we see with lower Medicare and Medicaid reimbursement rates being subsidized by private insurance.  But those aren’t the reasons being given by the opposition – those are my reasons.   I just wish those opposed would stop giving us talking points and instead would explain why all these terrible things would happen.

Then I could go back to being the expert I think I am.

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