Issue 2’s supporters alter claim of savings
ELECTION
A debate is heating up over claims of potential savings, or a lack of savings, that would result if Ohio voters approve Issue 2 on prescriptiondrug prices.
Backers of Issue 2, primarily the AIDS Healthcare Foundation, calculate that savings on prescription drugs for a little more than a third of Ohioans could range from $164 million to $536 million if voters approve the issue on Nov. 7, according to an analysis released this week. Those not insured through publicly administered programs probably would not see savings.
Opponents, supported by drug manufacturers, say that even if the proposal could work, the savings for those in publicly administered insurance programs would be far less than proponents suggest. And costs for others could go up, they say. But they also say that, as written, the initiative is unworkable.
A similar issue was defeated by California voters last year.
Ohio Issue 2, known as the Drug Price Relief Act, is an initiated statute that proponents say would help bring down drug costs for an estimated 4 million people in Ohio by requiring the state and several related entities to pay no more for prescription drugs than what is paid by the U.S. Department of Veterans Affairs, which generally gets about a 24 percent discount.
But opponents point out that the majority of those on publicly administered programs such as Medicaid already receive virtually the same discount: 23.1 percent.
And opponents say that it is impossible to pay VA prices because Ohio officials have no way of knowing how much the federal agency pays for drugs. Only some of that is public information; some of it is secret.
Issue 2 backers originally estimated that the savings would be $400 million per year, but new figures based on an analysis by Dr. Patrick Murray of the Center for Health Care Research and Policy at MetroHealth Medical Center in Cleveland peg savings at between $164 million and $536 million, based on several variables. Murray said the “actual savings using this methodology are most likely to be in the midrange of the sensitivity analysis, or $350 million.”
Murray’s analysis says that the average U.S. citizen paid about $1,054 for drugs in 2016. He relied on two reports to calculate potential savings by comparing discounts offered by federal programs, Medicare and Medicaid. One study was by QuintilesIMS Institute, an international health-care research and logistics organization; the other was by Marc-Andre Gagnon, a professor in the School of Public Policy and Administration at Careleton University in Ottawa, Canada, and Dr. Sidney Wolfe, a medical doctor and senior healthcare adviser for Public Citizen.
Murray’s savings estimate was included in an analysis released last week by Maxwell J. Mehlman, a lawyer and professor at the LawMedicine Center at Case Western Reserve University’s School of Law. Ohio Taxpayers for Lower Drug Prices paid Mehlman $9,000 for the report. Murray was not paid for his analysis.
Mehlman’s conclusions, particularly the $536 million cost-savings estimate, met with sharp criticism from Ohioans Against the Deceptive Rx Issue, which is funded by the Pharmaceutical Research and Manufacturers of America (PhRMA).
“Mr. Murray, who has no discernible expertise in either state budgeting or purchasing, has produced a nearly incomprehensible analysis brimming with contradictions and irrelevant facts entirely unrelated to Issue 2 or what our state government actually spends on prescription drugs,” said Dale Butland, communication director for Ohioans Against Issue 2. “Even more confounding is his ‘most likely’ savings estimate of $350 million, which is actually $50 million less than the $400 million per year that the ‘Yes’ campaign routinely claimed in the months before they commissioned Mr. Murray’s analysis.”
Butland said that even $350 million is “demonstrably false, because it fails to take into account the substantial discounts and rebates — both federally mandated and voluntarily negotiated — that the state government already receives for the vast majority of drugs it purchases.”
He said that a former state budget director and three former state Medicaid directors who served under both Democratic and Republican governors all say that Issue 2 would result in little or no savings “because Ohio and the VA are already paying roughly the same price for the vast majority of drugs Ohio buys.”
Greg Browning, a former state budget director, reviewed Murray’s savings analysis on Monday and said that it doesn’t deal realistically with health-care policies and drug pricing, and the proposal would not work even if it were approved by voters.
“The reality today is that significant discounting is already going on in all programs covered by this proposal,” said Browning, who is being paid a $2,500-per-month retainer fee by Issue 2 opponents. “The question is, what is their number compared to what is actually happening in Ohio?”
Browning said the biggest flaw in the calculation is the inclusion of savings from Medicaid, the program for 3 million low-income and disabled Ohioans. The difference between its 23.1 percent discount and the VA’s 24 percent discount is negligible, he said.