Drug-price ballot failure in California could mean bad prognosis in Ohio

8/20/2017
BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF
  • Prescription-Drugs-Spending

    The Ohio Drug Price Relief Act, appearing on Ohio ballots as Issue 2, would prohibit health programs funded by state government agencies from paying more for prescription drugs than the prices paid by the U.S. Department of Veterans Affairs. A similar measure failed in California last year.

    ASSOCIATED PRESS

  • COLUMBUS — Even as California voters last fall were rejecting a proposed law to limit what taxpayers pay for prescription drugs, the measure’s backers already had secured their second bite at the apple — in Ohio.

    “In California, you can’t assume a liberal measure is always going to pass,” said Jack Pitney, professor of government at Claremont McKenna College in Claremont, Calif. “If you have a persuasive argument on the ‘no’ side, that can move votes.”

    The Ohio Drug Price Relief Act, appearing on Ohio ballots as Issue 2, would prohibit health programs funded by state government agencies from paying more for prescription drugs than the prices paid by the U.S. Department of Veterans Affairs. A similar measure failed in California last year.
    The Ohio Drug Price Relief Act, appearing on Ohio ballots as Issue 2, would prohibit health programs funded by state government agencies from paying more for prescription drugs than the prices paid by the U.S. Department of Veterans Affairs. A similar measure failed in California last year.

    The Ohio Drug Price Relief Act, appearing on the Nov. 7 ballot as Issue 2, would prohibit health programs funded by state government agencies from paying more for prescription drugs than the prices paid by the U.S. Department of Veterans Affairs.

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    The measure is similar but not identical to Proposition 61, the proposed California Drug Price Relief Act that Californians rejected in November.

    “The ‘no’ side outspent the pro side about 5 to 1,” Mr. Pitney said.

    Major pharmaceutical companies spent more than $100 million to proponents’ $19 million. The measure failed by a margin of 53.2 percent to 46.8 percent.

    So far, similar trends are shaping up in Ohio.

    But despite the big spending on the pharmaceutical industry’s part, Stuart Schweitzer, professor of health policy and management at University of California, Los Angeles, said attempts by proponents to paint the industry as villains never really took hold in the Golden State.

    “I don’t think that it was a big battle,” he said. “In some public surveys people really distrust Big Pharma — until they come up with the next blockbuster drug that people want to use.”

    “I was rather surprised,” Mr. Schweitzer said. “... I know the industry well. I don’t get money from the industry, however. The feeling is they’re doing a lot more that’s good, so the question was whether this was a better remedy for solving a lot of the problems.”

    A television advertisement favoring a drug-pricing issue on Ohio's November ballot featured Max Cleland, a Georgia veteran who lost both legs and an arm in a grenade blast in Vietnam.
    A television advertisement favoring a drug-pricing issue on Ohio's November ballot featured Max Cleland, a Georgia veteran who lost both legs and an arm in a grenade blast in Vietnam.

    For the first half of this year, the industry-backed Ohioans Against the Deceptive Rx Ballot Issue political action committee reported raising $16.2 million in cash and in-kind contributions and spent $9.7 million. Every penny came from a similarly named limited liability corporation, a subsidiary of Pharmaceutical Research and Manufacturers of America, without individually reporting the corporate donors.

    By comparison, Ohio Taxpayers for Lower Drug Prices, the committee promoting the ballot issue, reported less than a quarter of that, about $3.8 million.

    “The biggest spending sides don’t always win, but what seemed to move votes is the argument that the measure could have the perverse consequence of raising drug prices for veterans,” Mr. Pitney said. “Veterans enamor sympathy from the public, which found the argument persuasive.”

    The opposition is using the same argument in television advertising in Ohio that began airing months before the first vote may be cast for the Nov. 7 election.

    Both Mr. Schweitzer and Mr. Pitney said such a proposal might have been expected to fare better in left-leaning California than it would in the Midwest.

    But by the time voters weighed in on the issue in California, proponents led by the nonprofit AIDS Healthcare Foundation already had cleared the hurdles to put the question on Ohio’s ballot.

    Ohio’s version is not identical to what failed in California. Proposition 61 would have exempted Medicaid managed-care plans from the law. Ohio’s Issue 2 would not.

    Unlike a constitutional amendment, an initiated statute, if approved by voters, would be a state law just like any passed by the General Assembly and signed by the governor. It could be amended and repealed by lawmakers at any time.

    Dennis Willard, spokesman for Ohio Taxpayers for Lower Drug Prices, said developments since California’s vote nine months ago only have bolstered the argument here for approval.

    “The drug companies spent over $100 million there,” he said. “We are expecting them to spend a lot of money here. They’ve already indicated that they’re doing that. But there’s been a seismic shift in attitudes toward drug companies.

    “The [Ohio] attorney general and a gubernatorial candidate have both sued the drug companies over the opioid epidemic,” Mr. Willard said. “There’s heightened awareness of the negative impact going on in Ohio because of the drug-company CEOs’ behavior.”

    He said he believes the fight over health care in Washington also has encouraged voters to take matters into their own hands.

    Dale Butland, spokesman for the industry-backed Ohioans Against the Deceptive Rx Ballot Issue, said the California ballot issue started out with a huge lead in the polls.

    “People hear that if you just vote for this, drug costs will go down,” he said. “That’s very attractive. In both cases, in California and here, the ‘no’ side has had a real education campaign they have had to do.

    “In California, they were successful,” Mr. Butland said. “There was 80 percent approval, but by Election Day it lost by 6 [percentage points] on the same day that Hillary Clinton won the state by 30.”

    While the industry pays the bills, the opposition boasts a broad coalition of medical, veterans’, and business groups, as well as former state Medicaid directors.

    Veterans Affairs gets discounts of about 24 percent on prescription drugs, and supporters of Issue 2 argue that 4 million Ohioans who also get care through taxpayer-funded programs like Medicaid, workers’ compensation, and state employees and retirees should enjoy similar benefits.

    But the opposition counters that Medicaid already enjoys discounts of about 23 percent and that drug companies may be less likely to offer future discounts if they know Issue 2 would lock them in for others.

    Proponents have gone after the industry, publicizing headlines about pharmaceuticals executives accused of raising drug prices and citing the recent securities-fraud conviction of Martin Shkreli.

    But similar arguments were made in California, Mr. Schweitzer said.

    “The industry seemed to me to have done a pretty good job of neutralizing that view,” he said. “They’re not all bad guys. They haven’t all raised prices seven-fold. ... Is Big Pharma thought of as the bad actor? Interestingly, in California it was not.”

    Contact Jim Provance at jprovance@theblade.com or 614-221-0496.