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Fact check: Ohio Issue 2 and VA drug price availability
October 19, 2017
By Sara Reynolds
On November 7, Ohio voters will decide on an initiative to require state agencies to not pay more for prescription drugs than the U.S. Department of Veterans Affairs (VA). Opponents claim that the plan is unworkable because the VA does not publicly disclose the lowest price paid for all drugs.[1] A report funded by Ohio Taxpayers for Lower Drug Prices, which supports Issue 2, claims that it is "unclear" how many VA drug prices are not public, but "it does not seem to be many."[2]
How many VA drug prices are not publicly available?
There are 17,969 pharmaceutical contract prices publicly accessible on the VA web site, and a department official told Ballotpedia that the VA does not publicly disclose 1,656 drug prices.[3][4]
Background
Ohio Issue 2, known as the Drug Price Standards Initiative, is an initiated state statute that would prohibit the state from paying more for pharmaceuticals than the price paid by the VA.[5] The initiative qualified for the ballot after a political action committee organized as Ohio Taxpayers for Lower Drug Prices submitted petitions with 227,503 valid signatures.[6][7][8][9]
Issue 2 is similar to California’s Proposition 61, which was rejected in 2016 by 53 percent to 47 percent. As was the case in California, the Ohio measure is being funded almost entirely by the AIDS Healthcare Foundation, a Los Angeles-based nonprofit organization which describes its mission as "to provide cutting edge medicine and advocacy regardless of ability to pay." The foundation has provided some $6.2 million for Ohio Taxpayers for Lower Drug Prices (and $18.7 million for Proposition 61).[10][11][12][13]
Opponents have organized the political action committee Ohioans Against the Deceptive Rx Issue, which has received $16.2 million from the Pharmaceutical Researchers and Manufacturers Association (PhRMA) and the PhRMA subsidiary Ohioans Against the Deceptive Rx Ballot Issue LLC.[12]
Dueling claims
A PhRMA-funded study found that the lowest price paid by the VA for any drug is likely to vary frequently and is not always publicly available. The researchers concluded that this "seriously impedes the ability of state entities and their vendors to know the price benchmark."[14]
In contrast, Ohio Taxpayers for Lower Drug Prices cites a report it funded stating, "It is unclear how many drugs might be affected by non-public price information, but based on the California Legislative Analyst’s Office report on Proposition 61, it does not seem to be many."[2]
The Legislative Analyst’s Office did not quantify the number of unavailable prices. However, it did state that government contracts for pharmaceuticals "often contain confidentiality clauses that are intended to prohibit public disclosure of the agreed prices" (emphasis added).[15]
VA drug prices
The VA administers health care to about nine million veterans annually.[16] Pharmaceuticals for the system are provided through contracts negotiated between government officials and drug manufacturers. Some purchases fall under contracts within the Federal Supply Schedule (FSS), which serves a variety of government agencies. The VA also negotiates additional price concessions through its VA National Contracts program.[17]
Pharmaceutical prices negotiated for 17,969 government contracts (FSS and VA) are publicly accessible from an online database.[3] Prices for 1,656 contracts are not publicly available, according to a VA spokesperson.[4]
The undisclosed prices involve FSS contracts for which drug manufacturers have voluntarily offered temporary price reductions to select agencies.[4] In return, their drugs are made readily available to patients.[15] The prices are not disclosed because the discount is voluntary and not a negotiated FSS rate, and disclosure could unfairly impact both government and commercial negotiations.[4]
Conclusion
Ohio voters will decide on November 7 whether to prohibit the state from purchasing pharmaceuticals at a price higher than what is paid by the U.S. Veterans Administration. Opponents claim the proposal is unworkable because the VA does not disclose all drug prices.[1] Supporters, Ohio Taxpayers for Lower Drug Prices, claim that it is "unclear" how many drug prices are not disclosed but "it does not seem to be many."[2]
According to the VA, the federal government currently publishes the prices of 17,969 pharmaceutical contracts and does not disclose 1,656 prices.[3][4]
See also
- Ohio Issue 2, Drug Price Standards Initiative (2017)
- California Proposition 61, Drug Price Standards (2016)
- U.S. Department of Veterans Affairs
Sources and Notes
- ↑ 1.0 1.1 No on 2, Deceptive Rx Issue, "FAQs," accessed October 12, 2017
- ↑ 2.0 2.1 2.2 Yes on Issue 2, "The Ohio Prescription Drugs Relief Act: Making Prescription Drugs More Affordable," accessed October 17, 2017
- ↑ 3.0 3.1 3.2 United States Department of Veterans Affairs, "Pharmaceutical Prices," accessed October 2, 2017
- ↑ 4.0 4.1 4.2 4.3 4.4 Sara Reynolds, "Email communication with VA spokesperson," October 4, 2017
- ↑ This would apply to any instance in which the state funds drug purchases.
- ↑ Cleveland.com, "Drug Price Relief Act sent to Ohio lawmakers for review despite petition fraud concerns," February 4, 2016
- ↑ Cleveland.com, "Ohio Drug Price Relief Act dealt setback by Ohio Supreme Court," August 15, 2016
- ↑ Business Wire, "Ohio Supreme Court Slaps Down Jon Husted; Drug Price Ballot Initiative Heading to 2017 Ballot," September 9, 2016
- ↑ Business Wire, "Ohio Certifies Drug Price Ballot Measure to Go Before Voters in November 2017," September 30, 2016
- ↑ AIDS Healthcare Foundation, "About," accessed October 3, 2017
- ↑ Cal-Access, "Proposition 061 - State Prescription Drug Purchases. Pricing Standards. Initiative Statute," accessed February 1, 2017
- ↑ 12.0 12.1 Ohio Secretary of State, "Campaign Finance," accessed September 20, 2017
- ↑ Nine other individuals contributed between $1 and $50.
- ↑ Lexology.com, "Analysis of Proposed Ohio Initiated Statute to Regulate State Prescription Drug Purchasing," September 22, 2016
- ↑ 15.0 15.1 California Legislative Analyst's Office, "Proposition 61 - State Prescription Drug Purchases. Pricing Standards. Initiative Statute." July 18, 2016
- ↑ United States Department of Veterans Affairs, "Veterans Health Administration," accessed October 16, 2017
- ↑ United States Department of Veterans Affairs, "National Acquisition Center," accessed October 2, 2017
Launched in October 2015 and active through October 2018, Fact Check by Ballotpedia examined claims made by elected officials, political appointees, and political candidates at the federal, state, and local levels. We evaluated claims made by politicians of all backgrounds and affiliations, subjecting them to the same objective and neutral examination process. As of 2025, Ballotpedia staff periodically review these articles to revaluate and reaffirm our conclusions. Please email us with questions, comments, or concerns about these articles. To learn more about fact-checking, click here.
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