We’ve been hearing a lot from readers about State Issue 2.
TVs in Ohio have been flooded with ads for the issue on the November ballot and viewers are confused.
Both sides in the ads have said that they will lower drug costs.
Who is right?
The answer to this question really depends on where in the supply chain you are looking at the “cost” of drugs.
Issue 2, if passed, would only lower what Medicaid and other state-run health plans pay for drugs — and therefore would reduce the amount of tax dollars spent on prescription drugs.
It would not directly impact how much drug manufacturers charge for the drug from the outset. It wouldn’t change how much pharmacies pay to stock the drug, or how much customers on various health plans spend out-of-pocket.
And it wouldn’t have any direct impact for the majority of Ohioans who are on private or employer insurance or on Medicare, which is a federal program.
That being said, the two sides each say there would be collateral consequences that could cause drug prices for everyone to go up or down.
Voting no, according to the No campaign, will not lower drug prices. It would simply maintain the current system and status quo on drug pricing.
But they say that a Yes vote could actually increase drug prices for some people.
This could happen in a few ways. Drug companies could simply increase the list price of drugs as they have been doing, because Issue 2 doesn’t stop them from charging whatever they want. And if the average price goes up, so too does the VA price.
Drug companies could also stop giving out the additional discounts they currently give to the VA and Medicaid. And for some health plans, like the state retirement programs, the pressure to get state costs down to the VA level could result in cost shifting in which the state charges the retirees a larger share of their prescription costs.
According to the Yes campaign, those increases are all just scare tactics being used by the pharmaceutical companies funding the other side. They say that voting yes for Issue 2 will cause not only the state programs to pay lower prices for drugs, but will lead to others like Medicare and private insurance plans to demand those same low prices, eventually bringing down costs across the market.