Healthcare is Hostage to Rx Pricing

By: Michael Weinstein, President, AIDS Healthcare Foundation

The impossible has happened. Harvoni, a pill that cures Hepatitis C made by Gilead, is selling for $1044 per pill. Decades ago we were outraged at the high price of AZT which was the first anti-retroviral HIV medication to come to market. Now the price of drugs threatens the long term viability of the entire U.S. healthcare system.

Gilead did not discover Harvoni. It bought the primary compound from a company named Pharmasset for $11 billion. That money came almost entirely from huge profits made by Gilead from the sale of grossly over-priced HIV medications. Pharmasset had planned to charge $36,000 for their drug. But, Gilead was not satisfied with that price and decided to push the envelope all the way up to $94,000 for a three month cure for Hepatitis C. During the same year, John Martin the CEO of Gilead, had total compensation of $206 million.

Michael Weinstein, AHF President, leading a protest.

Anger over drug prices has made this the number one healthcare issue by far among the American people. Presidential candidates Hillary Clinton, Bernie Sanders, and Marco Rubio are condemning Pharma on the campaign trail. Senators Charles Grassley and Ron Wyden are denouncing Gilead and other companies and conducting investigations. Yet, not a single piece of significant legislation is likely to be passed at the national or local level. A simple bill that would have required a little more transparency by drug companies was squashed twice in the last year in the dark blue state of California. Pharma's contributions to candidates on both sides of the aisle combined with vast lobbying budgets make passing legislation impossible.

Citizen ballot initiatives are one of the few avenues available to start to change the system. In fact, ballot initiatives were created to allow citizens to directly enact legislation when their elected officials refuse to act. Which brings us to the California and Ohio Drug Drug Relief Acts that will appear on their respective ballots in November. Pharma is so threatened by these initiatives that they have already contributed $40 million to defeat it in California and are trying every legal trick in the book to keep it off the Ohio ballot.

Pharma is working very hard to try to confuse the issue and pick apart the initiative because polling shows that 78% of California voters would support the initiative. First, to be clear this initiative is only a start to reining in drug prices. It is a very simple concept. The state will pay no more than the Veterans Administration for any drug. Critics, many of whom are directly funded by Pharma, say that the initiative can't be implemented and want us to address every hypothetical implementation issue. That is not our job. That will be the state's job after the initiative passes.

You don't have to believe us about how important these initiatives are in giving voice to the anger over drug prices. Here is what PharmExec.com had to say on December 8, 2015:

"If the voters of California approve this proposition it would establish an incredibly deep, mandatory discount - in essence a "price control" - for the public purchase of prescription drugs in American's largest state. Such an action would not doubt cause an immediate demand for the same VA discount rate to be made available to other states, the federal government, and likely private entities as well. In short, adoption of VA pricing by the State of California would be a pricing disaster for the entire U.S. drug industry."

The California and Ohio Drug Price Relief initiatives can be a catalyst for a movement to stop the rampant greed of drug companies with your support. Please don't be distracted by all the dust the industry will try to throw up to try to divert attention from the real issue - an out-of-control system that is victimizing our country.

Editor's Note: This blog was submitted in response to our previous blog, "Is Ohio the Frontline in the War on Rising Drug Prices?"

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Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

Is Ohio the Frontline in the War on Rising Drug Prices?

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Ohio, which is the 7th most populous state in the United States, is quickly shaping up to be the battleground over the rising cost of prescription drugs. The Ohio Drug Price Relief Act is a voter initiated statute spearheaded by the Ohioans for Fair Drug Prices and the AIDS Healthcare Foundation (AHF). The ballot initiative attempts to bring state prescription drug costs -- such as medications covered under the AIDS Drug Assistance Program (ADAP) -- in the Buckeye State in line with the lowest price made available to the U.S. Department of Veterans Affairs.

If the Ohio Secretary of State's Office certifies the signatures -- in which 91,677 valid signatures of registered voters are needed -- then the next step in the process would be the Ohio General Assembly taking up the legislative measure. If state lawmakers failed to approve the legislation within four months, then the petitioners could attempt to place the initiative on a statewide ballot for referendum.

According to Ballotpedia:

“The Act would enact Section 194.01 of the Ohio Revised Code to require that notwithstanding any other provision of law and in so far as permissible under federal law, the State of Ohio shall not enter into any agreement for the purchase of prescription drugs or agree to pay, directly or indirectly, for prescription drugs, including where the state is the ultimate payer, unless the net cost is the same or less than the lowest price paid for the same drug by the U.S. Department of Veterans Affairs."[1]

Among other provisions, the Act also:

• Sets forth the title of the Act as "The Ohio Drug Price Relief Act."
• Sets forth Findings and Declarations and Purposes and Intent of the Act.
• Sets forth factors in determining "net cost."
• Authorizes state departments, agencies and other state entities to adopt administrative rules to implement the provisions of the Act.
• Provide that the Act shall liberally construed to effectuate its purpose.
• Provide that if any provision of the Act is held to be invalid, the remaining provisions shall remain in effect.
• Provide that if the Act is challenged in court, it shall be defended by the Attorney General.
• Declare that the committee of individuals responsible for circulation of the petition ("the proponents") have a direct and personal stake in defending the Act and any one or more of them may do so in court if challenged. Provide that the proponents shall be indemnified by the state for their reasonable attorney's fees and expenses in defending against a legal challenge to the Act. Provide that the proponents shall be jointly and severally liable to pay a civil fine of $10,000 to the state if the Act or any of its provisions are held by a court to be unenforceable, but shall have no other personal liability.
• Provide that in the event that the Act and another law are adopted by the voters at the same election and contain conflicting provisions and the Act received less votes, the non-conflicting provisions of the Act shall take effect.
• Require the General Assembly to enact any additional laws and the Governor to take any additional actions required to promptly implement the Act.[2]

The fight over the ballot initiative has pitted familiar foes against one another, with AHF leading the charge in favor of it, and the Pharmaceutical Research and Manufacturers of America (PhRMA) -- which is the pharmaceutical industry trade association -- trying to squash the measure. The main criticism of the measure is the lack of specifics, including over how it would be enforced.

Upon announcing that the signatures had been submitted to the Ohio Secretary of State, said AHF's president Michael Weinstein, “While we’ve seen ample evidence that there is seemingly no limit to the corporate greed of pharmaceutical companies, we also know that Americans are tired of feeling afraid every time they go to the doctor or it’s time to get a prescription filled. Astronomical prescription drug prices hurt everyone—except the drug makers’ bottom lines. This has got to stop.”[3]

There remains considerable uncertainty over the outcome of the petition effort, as well as what lies ahead with this ongoing debate in Ohio.

“As I had testified to the Ohio Ballot Board, this well-intentioned but sloppily written ballot measure will have no real effect on drug prices due to trade secrets and lack of a verifiable reference source," argued long-time Ohio resident Eddie Hamilton, Director of the ADAP Educational Initiative. "What it will guarantee is lawsuits whose legal fees will be borne by Ohio taxpayers."

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[1] Ohio Secretary of State,"2015-07-21 petition," July 21, 2015; Last viewed online at http://www.sos.state.oh.us/sos/upload/ballotboard/2015/2015-07-21-petition.pdf. 

[2] Ohio Secretary of State,"2015-07-21 petition," July 21, 2015; Last viewed online at http://www.sos.state.oh.us/sos/upload/ballotboard/2015/2015-07-21-petition.pdf. 

[3] BusinessWire, "AHF: Advocates Submit 171,205 Signatures for 2016 Drug Pricing Ballot Measure in Ohio," December 22, 2015. Last viewed online at http://www.businesswire.com/news/home/20151222006046/en.