The Ohio Drug Price Relief Act is a state-wide ballot initiative that will appear on the Ohio ballot in November of 2017. The initiative’s primary objective is to lower the cost of prescription drugs purchased by the State of Ohio. The State of Ohio purchases pharmaceuticals for the Department of Corrections, Worker’s Compensation, Medicaid and other programs. If the measure passes, it would require the State of Ohio to pay no more for prescription drugs than is paid for the same medications by the U.S. Department of Veteran’s Affairs (VA). The State and state entities would be required to negotiate with drug companies.
As a nonprofit providing services for individuals with HIV/AIDS, we agree with the stated intent of this initiative and the necessity to address the cost of prescription drugs, particularly for people with chronic conditions. We consistently engage with multiple partners to assess a variety of proposals to achieve sustainable and affordable prices of prescription drugs for our clients. That said, we have many concerns with this ballot initiative, which are detailed below. In fact, it is possible that should this initiative become law and actually implemented, it could have the exact opposite effect of what it proposes. Prescription drugs could actually become more expensive and difficult to access for consumers.
- It is unclear how the benchmark for the reduced prices, which are assumed to save money, would actually be established. In fact, the actual prices paid by the Veterans Administration (VA) for drugs are not published. Those actual prices are proprietary and can vary from one VA facility to the next.
- Even if the initiative were to save the state money, it contains no mechanism to ensure that those savings are passed along to all consumers. If the State must seek deep price concessions from manufacturers and wholesalers, it is conceivable that these entities will compensate by raising prices for non-target entities (privately insured individuals) and equally conceivable that those increases could be passed along to consumers in the form of higher copays to maintain profits.
- Drug manufacturers have a well-established business model to sustain profitability. If they lose money on more expensive drugs, there is a risk that formularies will be reduced thereby decreasing access to certain drugs.
- It may not be reasonable to assume that large numbers of manufacturers would be willing to negotiate voluntarily with Ohio state entities. Manufacturers are likely to be reluctant to cooperate given the national precedent that could be set regarding state pharmacy programs.
For the reasons, Caracole is opposed to the Ohio Drug Price Relief Act. Moving forward with prescription drug pricing reform, we support a national effort such as the one outlined in the paper Tackling Drug Costs by Sean Dickson of the Fair Pricing Coalition and endorsed by the Treatment Action Group. This document outlines recommendations for a broader overhaul of the prescription drug pricing system and ensuring access to medications. The strategies outlined include tightening existing regulations regarding the amount federal and state governments pay for medications, increase penalties for egregious price increases, expand pool purchasing power and increase transparency about drug development and marketing costs. We do not believe a state-by-state effort is an efficient, fair or equitable way to tackle the problem of inflated prescription drug costs therefor Caracole does not support the Ohio Drug Pricing Relief Act. As a provider of services for persons with HIV/AIDS, we wholeheartedly support reform in the pharmaceutical industry and healthcare. We support a comprehensive, national effort aimed at accountability, reform and universal access for all Americans.