Local politics: Drug funding takes center stage

Michael Curtin

Ohio takes center stage this year in the national debate over the cost of prescription drugs.

On Nov. 7, Ohioans vote on a proposed law requiring state agencies to pay no more for prescription drugs than the lowest price paid by the U.S. Department of Veterans Affairs.

The measure qualified for the ballot via initiative petition, signed by 194,375 Ohio voters. TV ads began airing in late May, signaling the likelihood of the most expensive issue campaign in Ohio history.

The proposal, dubbed The Ohio Drug Price Relief Act, is nearly identical to an issue (Proposition 61) defeated 53-47 last November in California.

More than $128 million was spent in that fight — about $19 million by supporters and $109 million by opponents, according to Ballotpedia.org. Opposition cash came mostly from big drug companies, members of the Pharmaceutical Research and Manufacturers of America (PhRMA).

Americans spent about $425 billion on prescription drugs in 2015, according to IMS Health, a leading provider of health-care data. Prescription spending should exceed $450 billion this year.

According to the Kaiser Family Foundation, about 55 percent of Americans take at least one prescription medicine and nearly three-fourths of them believe drug prices are “unreasonable.”

Politicians get the sentiment. During his 2016 presidential run, Sen. Bernie Sanders endorsed Prop 61, saying, “Drug companies are ripping off the American people in a big way.”

President Trump, meeting in January with industry CEOs, complained drug companies “are getting away with murder.” He vowed to use government bargaining to lower prices.

That goal, long pursued by progressives, has proved elusive. When Congress, in 2003, passed the Medicare Part D bill to help seniors buy prescriptions, it prohibited the federal government from negotiating cheaper prices for those drugs.

In 2010, President Obama was able to secure passage of the Affordable Care Act, through a Democratic-controlled Congress, only after agreeing that Medicare would not negotiate the price of drugs.

The exception is Veterans Affairs, which since 1992 has had federal authority to negotiate discounts on drugs purchased for dispensation through its mail-order system. The VA's covered population, however, accounts for only 1 percent of the U.S. market.

Enter Michael Weinstein, founder and director of the California-based AIDS Healthcare Foundation (AHF), the financier behind Prop 61 and Ohio's ballot issue.

AHF's primary business is a network of pharmacies and clinics, serving 50,000 patients and generating about $1 billion in annual revenue. The profits allow AHF to provide free care to more than 700,000 H.I.V. patients internationally, according toThe New York Times.

Weinstein's Ohio plan “will lower drug prices for 3.7 million Ohioans,” saving them more than $400 million per year, proponents claim.

Opponents say the proposal is deceptive and unworkable, and could threaten VA discounts. The opponent coalition includes most major health-care groups, including the Ohio State Medical Association and the Ohio Nurses Association, along with the state's major veterans groups and business associations.