Free Press readers asked us to analyze The Ohio Drug Price Relief Act (Issue 2), the issue that is running so many TV commercials this election season. Ad campaigns on both sides are more confusing than usual. Progressive voters will lean towards voting “Yes” on the issue, which is a vote against Big Pharma's price gouging – but the opposition is threatening that the prices paid by veterans and others will increase.

We decided to follow the money to determine the real behind-the-scenes story.

Notable support for Issue 2 comes from Senator Bernie Sanders. The local group promoting Issue 2 is the AIDS Healthcare Foundation, an organization formed in 1987 by Michael Weinstein to help AIDS patients by making the life-saving drugs affordable. Their current pro-Issue 2 promotion urges Ohio voters to deliver some “Voter Medicine” and pass the bill. The “Yes on Issue 2” campaign notes that drug companies spent $2.3 billion lobbying over the past decade.

Opposition forces certainly benefited from that $2.3 billion. Organizations opposing Issue 2 include all obvious lobbying targets of Big Pharma, such as the American Medical Association, the American Public Health Association, the Ohio Nurses Association, the Pharmaceutical Research and Manufacturers of America and, of course, the Ohio Chamber of Commerce. Funding for the opposition is from Big Pharma, and further support comes in the form of lobbying and political contributions.

The opposition’s pitch against Issue 2 is basically that it will increase drug costs, because if passed, the Big Pharma people will punish everyone in sight in response. If that argument is not persuasive, the next threat is that it will lead to lawsuits which of course are expensive and voters would not want that. Frightened yet? on

After some study, one might get the impression that a “Yes” vote in Issue 2 could be like shooting at an aircraft carrier with a bow and arrow. A thorough study of the issue finds that big-moneyed Big Pharma finds Issue 2 to be a threat to their bottomless pit of greed and avarice.

Depomed Pharmaceuticals included this warning in their SEC 10-K report. (This refers to a similar effort in California in 2016)

“In California, voters rejected Proposition 61 in November 2016, a ballot initiative that would have prohibited the state from buying prescription drugs from a drug manufacturer at a price over the lowest price paid for such drug by U.S. Department of Veterans Affairs. Although Proposition 61 was defeated, these and other cost containment or price control measures, if adopted at the federal or state level, could significantly decrease the price that we receive for our products and any product that we may develop or acquire, which would harm our business, financial condition and results of operations.”

If passed, Issue 2 will force the State of Ohio to pay no more than the currently agreed on (contract) price given to the US Department of Veterans Affairs (VA), which would save the State of Ohio millions of dollars, but would cut into Big Pharma’s profits – assuming they could not react to changing conditions.

Caveat: The reader should understand that Issue 2 will not decrease the cash price for non-insured customers who are completely at the mercy of giant appetite of Big Pharma. Proponents of Issue 2 do not make that claim, but one might infer it by the title: The Ohio Drug Relief Act. Either way, that is a battle that must be saved for another day.

Understanding that a “Yes” vote on issue 2 will do nothing for cash-paying customers and will do nothing to reduce copays and deductibles for insured patients, one must consider supporting it for other reasons, most importantly that it would save the State of Ohio a lot of money. Because passage would not affect cash paying customers, Big Pharma then developed the threat that costs would then go up for this group of people. 

As Joseph Welch said when questioning Joseph McCarthy “"At long last, have you left no sense of decency?" “

Could Big Pharma then turn around and raise prices to the VA? Could they raise prices to cash paying customers? Could they raise prices to the providers of the plans offered by your employer? The answer to all these questions is YES, they could. However, they are politically unattractive options so that Big Pharma will have to consider the option of allowing their profits to decrease, and allowing for the nuclear fallout to their stock price which is the result of reporting decreased earnings projections to Wall Street.

To adjust prices for the VA, they would have to adjust prices nationally as a response to the limited effect the Ohio law would have on profitability. But the monsters at Big Pharma would see the writing on the wall, and thus may begin a process of adjusting prices to the VA in order that they may continue to feed the beast.

Issue 2 might be David vs Goliath. Or Issue 2 might be the first move in a chess match. It is time someone made the first move in the effort to slay Big Parma’s cash cow.