Summer is Hot, but the Debate Over Drug Pricing could be even Hotter

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

Temperatures across the United States are sizzling with the arrival of summer, but they could pale in comparison to the emerging debate over the rising cost of prescription drugs. A state ballot initiative, coupled with a rumored presidential executive order and pending federal legislation in Congress are setting the stage for a heated battle over drug pricing.

In Ohio, voters are already being inundated with 30-second political attack ads from both sides of the debate. One advocate in the state has said, "Every commercial break is flooded with them... and it is only summer." The "Ohio Drug Price Relief Act" will take center stage before the voters in November 2017, with spending on political ads expected to break all previous records for any statewide ballot initiative.

The ballot initiative would "require the state of Ohio to pay no more for prescription drugs than the U.S. Department of Veterans Affairs (VA), which has negotiated a discount of up to 40 percent."[1] It is supported by the Ohio Taxpayers for Lower Drug Prices, and it is opposed by the Ohioans Against the Deceptive Rx Ballot Issue. Veterans groups have also lined up against the ballot initiative.

According to Ballotpedia, a "yes" vote supports the measure to require state agencies and programs to purchase prescription drugs at prices no higher than what the VA pays for them, and a "no" vote opposes the measure to require state agencies and programs to purchase prescription drugs at prices no higher than what the VA pays for them.[2]

"I would assume that the happiest people in Ohio today are the people who are selling television commercials. The pharmaceutical industry will spend whatever they believe they need to spend to try to confuse and mislead the public," summarized Rick Taylor, a consultant for the Ohio Taxpayers for Lower Drug Prices.[3] Here is a political ad airing in support of the ballot initiative:

Source: Ohio Taxpayers for Lower Drug Prices

Curt Steiner, campaign manager for the Ohioans Against the Deceptive Rx Ballot Issue, argued, “Experts who have studied the proposal — including three former Ohio Medicaid Directors and a former state Budget Director — say it’s not only unworkable, but could actually increase prescription drug costs for the majority of Ohioans and reduce patient access to needed medications.”[4] Here is a political ad running against the ballot initiative:

Source: Ohioans Against the Deceptive Rx Ballot Issue

With the ballot initiative over four months away, voters in Ohio might simply turn off their televisions rather than contend with the forthcoming onslaught of these negative ads. There has been no public polling released on the issue in Ohio (...yet), but a similar ballot initiative failed last November in California.

In the meantime, news reports are floating that President Donald J. Trump plans to issue an executive order on drug pricing, though the timeline remains unclear. A draft version of the executive order, which was obtained by The New York Times, appears to give into demands by the pharmaceutical industry and rolls back numerous regulations.[5]

Some had hoped for rebates in Medicare Part D that would be similar to Medicaid,[6] but they appear absent from the draft obtained by The New York Times. Such a move would have greatly benefited consumers. It hard to see how the draft executive order would assist consumers, or public payors — such as State AIDS Drug Assistance Programs.

The measure is already being met with skepticism, especially because it appears to roll-back discounts authorized under the 340B Drug Discount Program. Dr. Joshua M. Sharfstein, a professor at Johns Hopkins Bloomberg School of Public Health, summarized this concern by saying, “That’s one that sticks out as a bit of a head scratcher. This is the executive order to lower drug prices — why would you put in a provision that would raise drug prices?[7]

Speaking for many in the patient advocacy community, Eddie Hamilton with the ADAP Educational Initiative questioned, "We don’t have any further information on this proposed draft, but it does raise some concerns. It appears to target 340B and the hospitals are, of course, screaming but we can’t verify that our community will be spared."

Congress isn't absent from the debate over drug pricing. In fact, a recent article in Roll Call spelled out the enormous pressure faced by lawmakers to do something on lowering the cost of prescription drugs. Presently, 802 bills addressing drug pricing have been introduced in Congress since the beginning of the year. Among them are the following:

• S.1369 - A bill to amend the Internal Revenue Code of 1986 to establish an excise tax on certain prescription drugs which have been subject to a price spike, and for other purposes. (Note: H.R.2974 is the companion legislation before the House of Representatives)
• S.1131 - Fair Accountability and Innovative Research Drug Pricing Act, which is a bill to require reporting regarding certain drug price increases, and for other purposes. (Note: H.R.2439 is the companion legislation before the House of Representatives)
• H.R.1316 - Prescription Drug Price Transparency Act, which is a bill to amend title XVIII of the Social Security Act to provide for pharmacy benefits manager standards under the Medicare prescription drug program and Medicare Advantage program to further transparency of payment methodologies to pharmacies, and for other purposes.
• H.R.242 - Medicare Prescription Drug Price Negotiation Act, which is a bill to amend part D of title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate covered part D drug prices on behalf of Medicare beneficiaries.

Ballot initiatives, executive orders, and legislation are all stoking the flames over the drug pricing debate, but they don't even include ongoing litigation filed by 20 state attorney generals. It is clear that the issue has reached a climactic point and something needs to be done about it. The ADAP Blog will continue to monitor each of these developments.

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[1] Pelzer, Jeremy (2017, May 3). Fight over Ohio Drug Price Relief Act ballot issue could set spending record. Cleveland.com. Retrieved from http://www.cleveland.com/politics/index.ssf/2017/05/fight_over_ohio_drug_price_rel.html.
[2] Ballotpedia. Ohio Drug Price Standards Initiative (2017). Retrieved from https://ballotpedia.org/Ohio_Drug_Price_Standards_Initiative_(2017). 
[3] Pelzer, Jeremy (2017, May 3). Fight over Ohio Drug Price Relief Act ballot issue could set spending record. Cleveland.com. Retrieved from http://www.cleveland.com/politics/index.ssf/2017/05/fight_over_ohio_drug_price_rel.html.
[4] Troy, Tom (2017, May 23). Opponents launch TV ad against Ohio Drug Price Relief Act. The Toledo Blade. Retrieved from http://www.toledoblade.com/State/2017/05/23/Opponents-launch-TV-ad-against-Ohio-Drug-Price-Relief-Act.html.
[5] Kaplan, Shelia, and Katie Thomas (2017, June 20). Draft Order on Drug Prices Proposes Easing Regulations. The New York Times. Retrieved from https://www.nytimes.com/2017/06/20/health/draft-order-on-drug-prices-proposes-easing-regulations.html.
[6] Nather, David (2017, May 12). Mulvaney says Trump wants executive action on drug prices. Axios. Retrieved from https://www.axios.com/vitals-2403219901.html.
[7] Kaplan, Shelia, and Katie Thomas (2017, June 20). Draft Order on Drug Prices Proposes Easing Regulations. The New York Times. Retrieved from https://www.nytimes.com/2017/06/20/health/draft-order-on-drug-prices-proposes-easing-regulations.html.