Proposal To Cap Drug Prices Raises Questions And Lawsuits

Feb 3, 2016

The Secretary of State may soon have a decision on a proposal to cap the price Ohio pays for drugs it buys for Medicaid, prisons and other state-run programs. And while that decision might stop the proposal in its tracks, it’s already controversial.

It sounds like a simple proposal: “That Ohio would not pay any more than the Veterans’ Administration for drugs.”  The AIDS Healthcare Foundation, based in California, has formed a group called Ohioans for Fair Drug Prices to push that idea in a law that would require the state of Ohio to pay no more for drugs than the federal US Department of Veterans Affairs does. It would cover drugs bought for Medicaid, for prisons, for mental health programs, and for state-run facilities. Weinstein said the VA pays 20%-24% less for drugs than the state does, so this could save billions.

The proposal, called the Ohio Drug Price Relief Act, is nowhere close to being enacted, but it’s already gotten the attention of the pharmaceutical industry. “Our biggest issue with this is while the written language seems simple, it’s a very complex measure, and it could really have some significant adverse consequences for a lot of Ohioans,” said Priscilla VanderVeer, who speaks for the Pharmaceutical Research and Manufacturers of America or PhRMA, the chief lobbying group for the industry. The group disputes the potential savings of the proposal, and suggests that such a proposal could hurt customers by limiting access to drugs.  Weinstein's group needed 91,000 signatures to start action on the proposal. Ohioans for Fair Drug Prices turned in 119,000 signatures to  Secretary of State Jon Husted to review in December.  VanderVeer says PhRMA asked Husted for an additional review of those signatures. "As we go through the process, we’re closely monitoring the process that state and local election officials are performing to ensure that the petitioners have properly followed Ohio laws particularly as they pertain to gathering and filing signatures and petitions,” VanderVeer said.

But that’s not how Weinstein views it. Weinstein said more than 98% of the signatures came back valid, so he says Husted should have turned the proposal over to lawmakers to consider a month ago. But he said the second review was launched because the drug makers don’t want this issue. “The people of Ohio need to know that he’s doing the bidding of the pharmaceutical industry and he’s not fulfilling his office. He is violating his constitutional mandate. He’s running out the clock so we won’t be on the November ballot.”

If lawmakers don’t act on the plan, Ohioans for Fair Drug Prices has four months to gather more signatures to put it before voters this fall. Husted's spokesman Joshua Eck had no numbers on how many signatures were valid, but he said the issue was never certified, so there’s no reason to turn it over to lawmakers. Eck says it’s not unusual for complaints to be filed about petitions and signatures, especially when those gathering the signatures are paid, as they were in this case. And Eck said Husted has never asked for a second review of signatures, but did this time because he’s concerned about that complaint. "The complaint was that some of the petitions had been mishandled and so the Secretary, in doing due diligence, asked the county boards of elections to do a second pass through of the petitions with that complaint in mind just to check whether or not the complaint had any validity,” Eck said.

The data on the signatures from the boards of elections was due Friday, so a decision on whether the issue goes forward or not is likely soon. Weinstein’s group has sued Husted in state and federal court, asking for a quick review of the cases. A similar proposal to cap drug prices is pending in California, and Weinstein says the pharmaceutical industry has spent $38 million against it so far, and could spend up to $100 million. VanderVeer with PhRMA wouldn’t confirm or project any spending figures if the issue does go forward in Ohio.