CLEVELAND, Ohio – An analysis by the Ohio Office of Budget and Management finds the state could save some money if Issue 2 passes, but it is impossible to say with certainty or how much.
Issue 2 is the ballot initiative that would require the state to pay no more for pharmaceuticals than what the U.S. Department of Veterans Administration does. Supporters and opponents have argued over the actual consequences of Issue 2, including the savings, in what’s become a protracted, divisive battle.
Proponents, known as Ohio Taxpayers for Lower Drug Prices that are financially backed by the AIDS Healthcare Foundation, say the initiative could save as much as $400 million a year.
Opponents, known as Stop the Deceptive Rx Ballot Issue that are financially backed by the pharmaceutical lobby, say it will actually increase prices when the pharmaceutical companies try to maintain profits.
A report released Wednesday by OBM concluded the state could realize some savings, so long as any implementation issues can be worked through. But the savings would not be immediate, and estimating the total amount is impossible, the report stated.
“However, there are many unknown issues that would impact such a calculation, including limited available drug pricing information, differences between the VA population and those served by the state, differences in the organization and administration of the VA program and state programs, and potential market reactions to state price limitations,” the report states.
Other factors, such as the demographic differences between VA and state clientele and how the pharmaceutical companies react, create further problems in estimating if there would be any savings.
“A dynamic analysis of the potential impacts of Issue 2 would account for the fact that, even if the state were to initially benefit from some drug expenditure savings by receiving VA prices, drug manufacturers could and likely would seek to recover lost revenues,” the report states.
The report also found savings to Medicaid and the HIV drug assistance program were unlikely.
Both proponents and opponents of Issue 2 claimed victory from the OBM report.
Dennis Willard, spokesman for Ohio Taxpayers for Lower Drug Prices, said the report showed the state would save money, though he did not address the uncertainty.
“We believe the savings can be calculated and we have produced a study that shows the range will most likely fall well within the $400 million a year that Ohio taxpayers will save when we no longer pay the excessive prices charged by big drug companies for medicine,” Willard said. “All along we have maintained that the big drug companies would not be spending $2-3 million a week to bombard the television airwaves with misleading and false ads if their bottom line was not on the line.”
Dale Butland, spokesman for Stop the Deceptive Rx Ballot Issue, said the report proved the initiative was inherently flawed.
“As our Vote No Coalition has said from the beginning of our campaign this spring, when something sounds too good to be true, it probably is,” Butland said. “Issue 2 is simplistic, unworkable and built on a flawed foundation. It therefore can’t and won’t achieve anything remotely close to the wild savings estimates touted by Issue 2 proponents. Further, Issue 2 could very well increase costs for a majority of Ohio consumers, while reducing access to needed medicines for some of our most vulnerable citizens.”
Read the full report:
Ohio Issue 2 Fiscal Analysis from OMB by srichardson on Scribd