Issue 2: Ohio Drug Price Standards Initiative

The Ohio Drug Price Standards Initiative is an issue that, on first pass, seems like a good idea. The government should be spending less, and should be statutorily required to spend as little as possible on all services. However, the presentation of this bill as a restraint on government is a façade hiding the real long game of demonizing and further regulating pharmaceutical companies. It is my opinion that the LPO should take a strong, principled, and clearly defined stand against this bill.

Overview of Issue 2:

The Ohio Drug Price Standards Initiative would require the state and state agencies, including the Ohio Department of Medicaid, to pay the same prices for prescriptions drugs as the U.S. Department of Veterans Affairs (VA) – a department that negotiates drug prices with companies and typically pays 20 to 24 percent less than other agencies for prescription drugs. Specifically, it would forbid state agencies to enter into any purchasing agreement with drug manufacturers unless the net cost of the drug is the same or less than that paid by the VA. The measure would apply in any case in which the state ultimately provides funding for the purchase of drugs, even if the drugs are not purchased directly by a government agency. Examples of such cases include the Ohio Best Rx Program and the Ohio HIV Drug Assistance Program.


There are 2 logical outcomes to this legislation: either drug prices will rise nationally, including for the VA, or pharmaceutical companies will choose not to do business with Ohio.

In the first scenario, it would be logical for the pharmaceutical companies to view the success of a bill like this in Ohio as a change in attitude and, naturally, would begin to raise prices across the board to prepare for the onslaught of other states eager to pass similar legislation. This would prompt the typical torrent of law suits and investigations against pharmaceutical companies; costing taxpayers greatly for little more than a political peacock show. Regulation would rise out of both Washington and Columbus, and we would be stuck with an even more cumbersome regulatory burden than we have now.

In the second scenario, pharmaceutical companies could choose to not do business with the state, leaving people to pay, out of pocket, for medicine that they likely won’t be able to afford. This could easily lead to a turn to illegal drugs in place of drugs that aren’t attainable with state assistance and an even greater addiction problem than is already plaguing Ohio.

It is evident, from the language used to advance this bill, that this is really a Trojan horse disguised as a government check, to cudgel an already over regulated industry. The Turing hearings are consistently referenced as what this bill would hope to keep in check but it will be innovation and medicine that will suffer when pharmaceutical companies react, predictably, to market pressures.

Finally, to the extent that this is a solution to a real issue, it is little more than a Band-Aid on an issue in need of real and serious reform.

LPO Solution:

The real solutions here are two-fold: an end to any form of government healthcare and a relaxing of regulations surrounding FDA approval of treatment.

Healthcare is not a responsibility of the government and should be given back to the individual as quickly as possible. Veterans could be taken care of through voucher system and the free market much better than in the crumbling bureaucracy of the VA. Both Obamacare and Trumpcare have proven to be dead political weight to their respective parties and unworkable government programs that raise costs and lower the quality of care, both should be eliminated, root and branch. We should be pursuing solutions like opening healthcare up to competition across state lines, less regulation, and lower the threat of frivolous litigation to medical professionals.

The FDA moves at the speed of government on issues that are far more critical than the naming of “National Donut Day.” Ted Cruz has suggested one great solution to one of the biggest issues plaguing the FDA: people dying before drugs are available. Far too many people die, while drugs are being tested for safety. There is no reason why a terminally ill patient should not be allowed to waive his right to “safe” drugs in favor of something less proven/experimental. This would have the potential to both save lives immediately as well as advance research with human test cases before it might be reasonably feasible to conduct tests on relatively healthy people. Another solution Ted Cruz has suggested is to require the FDA to expedite approval of drugs that are already approved in countries that we would deem trustworthy. Finally, it would be prudent to revisit the standards of the FDA. Our drugs are so expensive because of the rigorous regulatory standards they’re required to pass before they’re even allowed to be offered to consumers. Decades of R&D often go into medicine that politicians then unctuously decry as “too expensive,” when they finally hit the market. The FDA is in desperate need of reform to both lower the cost of drugs and bring new and innovative drugs to the market.

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