A community member has been asking for my opinion on Ohio Issue 2. This is a referandum question that is a near clone of Prop 61 in California. Ohio’s state government would be required to pay no more than Veteran Administration prices for any drug that the VA gets. This would lead to pass through savings on Medicaid, state employee, state retiree and a few other plans. Let me repurpose most of my California post as my thoughts have not changed.
The basic thrust of the proposition would be to effectively make the VA the proxy price negotiator for a significant chunk of
CaliforniaOhio prescription drug budget.CaliforniaOhio could probably get away with this because it is a huge market and it has the ability to significantly move stock prices if it shifted all purchases in one category to a single company instead of seven manufacturers. It actually has some market power. That market power is why the Pharma industry opposed the measure. Pharma probably would not have spent $100 million dollars to oppose a similar initiative in Wyoming.We have to ask ourselves why does the VA get such good pricing on their drugs?
They have decent size although there are several pharmacy benefit managers with much larger patient pools.
They benefit from the federal law that mandates a list price discount but that does not explain their superior pricing to Medicare’s drugs.
The VA gets good drug pricing because they say no…
The initiative would have put into place a massive implicit system of NO. That NO would create a significant set of diffused winners (
CaliforniaOhio tax payers), a small set of concentrated winners (CaliforniaOhio funded beneficiaries who currently take drugs that would be on the narrow formulary at lower prices), a large set of somewhat diffuse losers (beneficiaries who would either have to change drugs or pay higher co-insurance for current drugs) and a narrow set of concentrated losers (Pharma as they won’t extract as much money fromCaliforniaOhioin economic and intellectual property rents). That is a nasty political balance of power that implies a close election which is what we got.Is this an experiment that other states could push forward on? I think it is. The biggest challenge may be getting the VA to be the lead negotiator for drug classes that their population does not use or does not use in large quantities even as the states’ impacted population uses those drugs in large numbers. I am not a clinician but I would think some pediatric drugs would fit into this category of concern. The VA might be willing to take on this role as it could significantly increase the market power of the VA negoatiators as they would have millions of more covered lives to credibly threaten to move to a different drugmaker unless they get a better deal.
? ?? Goku (aka The Hope of the Universe) ? ?
Thanks for this David! So, drug prices will rise for some on certain drugs? But Ohio taxpayers will save money in the long run? Will this actually save most people out of pocket costs?
A lot of the big medical orgs have been campaigning against it pretty hard for the last 2 months. I’ve only ever seen one ad in favor and Bernie was in it. Lots of California-baiting too, which is stupid. I’m definitely suspicious of all this opposition to it.
raven
I KNOW the VA isn’t paying $3,800 for the hearing aids i got from them.
gVOR08
Thanks. In Cincinnati we’re seeing a lot of ads against. My reasoning hadn’t gotten beyond if big pharma is spending this much money to kill it, it must be a good thing.
manyakitty
@? ?? Goku (aka The Hope of the Universe) ? ?: Looks like they got a veterans group to go against it, too. For clarity, do you think we should vote for or against the issue?
? ?? Goku (aka The Hope of the Universe) ? ?
@manyakitty:
I don’t know. A lot of doctors’ and nurses’ associations are against and I don’t take that lightly. I’d really like to know how well the initiative has worked in California. Based on what David said above, I’ll vote for. I’m not confidant it will pass however.
Ohio Mom
Ohio Son is on both the insurance plan Ohio Dad gets through work and Medicaid. Dad’s insurance is the primary (until Son reaches age 26) and Medicaid picks up the co-pays.
If Ohio Medicaid wanted to save money, they could better align with private plans. Dad’s insurance gives a discount for meds bought in three-month supply, Medicaid will only allow Son to buy one month at a time. So for meds that are taken continually (which they almost all are), Medicaid pays extra every month.
Since many children with disabilities take multiple meds, this must add up.
rikyrah
Thanks for the response, Mayhew.
Ohio Mom
Also have to add a chuckle to “the biggest challenge may be getting the VA to be the lead negotiator for drug classes their population does not use.”
My neighbor is a VA pharmacist. She is a great source of insight on the meds Ohio Dad takes — he is a middle-age man with “hyper-betes” and a smattering of other maladies found frequently among old men.
But ask her about the newer pysch meds Ohio Son takes or the estrogen-blocker I take, and she can only volunteer to do some research. Old men don’t take these meds, plus the VA is famous for having a limited formulary.
And I still don’t know what to think about this proposition.
Ohio Mom
@gVOR08: I don’t recognize your nym but are you coming to the Cincinnati meet-up?
Kay
Thanks so much for the explanation. The ads are a confusing mess.
Percysowner
Thanks so much for this. I’ve been seeing all the “Vote no” ads and have been confused. My heart and brain say it’s a good idea, but then the veteran’s groups and the nurses and the physician groups come out against it and I wonder if I’m just missing something. Now at least I feel better about leaning toward voting yes.
nonynony
@Kay:
The ads from the Vote No side appear to be an intentional mess. They seem to be trying to throw mud around because their actual position both requires a lot of nuance to get people on board and some pieces of their position are actually unpopular when stated aloud.
Meanwhile I think I’ve seen exactly one ad from the vote yes crowd. That may be because almost all of my television is either streamed via Roku or on the “old-people” rerun channels rather than network TV, but they’ve inundated my Hulu feed at times over the past few months with Vote No ads.
Davebo
@? ?? Goku (aka The Hope of the Universe) ? ?: Prop 61 failed to pass in CA.
smintheus
I think a good parallel path to reform of the high price for medical care would be for states or the federal government to set the max level for reimbursement for medical procedures by public or private insurance at the same rates that medicare specifies.
ETA: That may help to explain why doctors and medical orgs are so opposed to this proposal…because it points the way toward an obvious solution to other excessive medical costs.
Ruckus
@Ohio Mom:
I said this about the CA issue and I’ll say the same here, as a patient that requires/has been on some off formulary meds, the VA can be less that totally satisfactory. However, there is no reason they could not put other drugs on it/when their pool gets dramatically larger. Also almost every drug I ever see is a generic, which is I’m pretty sure one reason big pharma is against. On label drugs are where they make their money, it’s why they spend more on advertising a drug that you have to have a prescription for than for development and mfg. They want you to ask for it by name, they want your doctor to prescribe it, even if another drug might be better or a generic might be far cheaper.
manyakitty
@? ?? Goku (aka The Hope of the Universe) ? ?: Yeah well. Good point. It’s a place to start, so I’m a yes now, too.
Victor Matheson
@smintheus: Exactly what I was thinking. Give health regulators an obvious way to drive down drug prices and you will point them to exactly the right tool to allow them to drive down the prices of medical services.
Ohio Mom
@Ruckus: Most of Ohio Family’s meds are generic but a few of them aren’t — sometimes the newer stuff suits someone’s needs better. That’s not to say we don’t often try the older stuff first.
I remember in my younger days, when the only thing I took was a vitamin on occasion. I would have told you quite strongly that I would never take anything that didn’t have a long track record. But nowadays I am more flexible because it looks
like I have to be. It’s funny, I trust doctors less but rely on their opinion and advice more.
David Anderson
@? ?? Goku (aka The Hope of the Universe) ? ?: If I lived in Ohio, I would vote for it.
The proposition failed in California.
J R in WV
We live in a TV market mostly split into 3 states, w Kentucky, s Ohio and western and central West Virginia.
So we get a TON of ads about the Ohio prescription plan vote. By the amount of money going into the Vote No side, I was sure that it was a major good deal for consumers, and once I heard that it pegged Ohio government funded script plans to VA costs I was positive.
Prescription plans run by most insurance companies are a huge money maker. And they have no hesitation when removing a drug from a “formulary” [aka directions for maximising profits!] that there is no replacement for. I will provide real world examples from my family.
Person with Irritable Bowel Syndrome (IBS) visits family doctor decades ago, mentions abdominal pain, constipation blended with diarrhea, usually at 3 am, but really, any time, any where, moments notice. Doctor writes a prescription for Librax, a blend of two medications, take at first sign of discomfort, short circuits the whole painful humiliating situation back to normal digestive behavior. $5 copay. For at least 15 or 20 years.
So the last time a refill is requested, helpful pharma tech informs us that the drug is no longer on the formulary, and the company (Humana which is such a contrast with their real behavior as to be absurd!) suggest 6 different anti-acid drugs which turn a good profit margin. Of course, they do nothing for IBS, which is more of a colon thing than a stomach thing. (Sorry for the detail, but it is important to the story).
Our family doctor works for a week with Humana, no go. The pharmacy offers the medication for $50 cash deal, which we are grateful for as it is necessary in order to be able to go out in public, to shop, visit, travel whatever. Now, in this case, Humana isn’t making money on this sale as far as I know. But they aren’t providing any health care benefit to me, either.
The second story is even worse, really.
Patient is prescribed a drug necessary for their continued health. Cost is $500 co-pay for a month’s supply at the regular local pharmacy we use… Prescribing doctor works with a non-profit health care agency based in Huntington, 90 minutes away. The agency includes urgent care AND a pharmacy, where the cash deal for the same proprietary drug is $50 flat … so the insurance company appears to be making at least $450 net profit on every prescription filled for this medication.
Obviously there is a 3 hour drive in our future to procure this medication at an affordable cost. But what about someone who can’t drive? Who’s vehicle is unreliable? A patient with a disability, or who is unaware of this alternate pharmacy? They will be robbed – or left without their medication!
We gotta do something.
Additionally, a warning. Twice this year there has been a mis-communication between a prescribing doctor and our pharmacy, once by medical office staff and once at the pharmacy that resulted in arrival at home with the wrong medication. In one case, an antibiotic that would not have treated the condition being treated, with dosing instructions quite different from those described by the doctor, which is how I determined that I had the wrong medication in hand. The medical staff at the doctor’s office was quite resistant to the thought that they could have made a mistake, I had to insist that they inform the doctor and remedy the situation.
More recently my family doctor found at my annual physical that one eardrum was bowed, indicating pressure imbalance between my inner ear and sinus cavities and the atmosphere. He prescribed a hi-tech nasal spray. When the pharma tech provided the medication, it was in an inhaler, and described as a treatment for Chronic Obstructive Pulmonary Disease (COPD) which is a progressive and fatal disease – not was I was diagnosed with.
Turns out that the same medication in a different concentration is provided in either a nasal spray OR in an inhaler, to deliver the medication into your lungs and dilate bronchia so you can breathe. The nasal spray delivers a different dose of the med into your sinuses, so that they will open up and drain, and the inside of your head will be at the same pressure as the atmosphere. The inhaler was $100 copay, the nasal spray was $5 copay. Glad I don’t have COPD as it could bankrupt a person dying of lung failure, how both my parents died!
Anyway, TL;DR : be CAREFUL with your medications, that they are what was intended to be prescribed and will treat what you have!!!
debbie
@J R in WV:
OMG, the number of ads is absurd! All paid for by pharma, plus I think they started back in February.
ruckus
@J R in WV:
I always check my meds before I take them. There are a number of sources for good info on the web and the good ones have normal dosage ranges listed as well. There are just too many people between the illness and the swallowing not to check.