Where to begin . . .
I first became aware of, and interested in, Ohio Issue 2 when I began seeing negative ads about it in May of this year. Usually, ballot issues get some play in October if they're contested, maybe September if people are really hot about them. But May? Really? So I dove in.
Ohio Issue 2 is a ballot initiative that would say that the State of Ohio would never pay more for medications than the V.A. pays for them. From a superficial standpoint, that makes perfect sense. The V.A. is reputed to get very good drug prices through strong negotiations, so why wouldn't other government agencies want to take advantage of that? For all the negative advertising, including character assassination, there must be some serious dollars involved.
Using only publicly available data, I tried to find out what the dollar amounts involved actually were. At the start, it looked easy - The V.A. publishes the prices they actually pay for their medicines. These can be matched to a State of Ohio Medicaid website that gives the corresponding price, to the Medicaid patient, for exactly the same medicine. It's a little confusing because Ohio gives their prices in 'units', while the V.A. prices the entire package. But with enough perseverance, you can figure it out.
And the answer is a resounding "yes". The V.A. pays less, in about 90% of the cases, than the Ohio Medicaid price. In some cases, it's a LOT less, in others it's just a little less. In a handful of instances, they pay slightly more.
Simply knowing that some drugs are less expensive at the V.A. doesn't tell you a lot. You need to also know how much those drugs are actually being used. For that, we can go to a third agency, the U.S. Medicaid administration, which conveniently tells us how much of each drug was prescribed and paid for by Ohio Medicare. And that's where the fun starts.
It quickly became clear to me that there are three types of drugs on these lists. The first group is generics. Across the board, these are relatively inexpensive and the differences in V.A. and Medicaid prices are generally fairly small.
The second class of drugs is the patented, proprietary drugs. These are newer and more revolutionary, and include the ones you see advertised on TV. These drugs are amazingly expensive. Just amazing. But, the results they claim are also extraordinary, so I'm not going to make any judgments about 'value'.
The third class of drugs are those that are priced so astronomically, for no apparent reason, that Medicaid doesn't even list them. You can see one example of these in the Issue 2 advertising - where a family has no choice but to pay the several hundred dollar price increase to protect their children's lives. That's because Medicaid won't pay anything for that particular medicine.
Next up: What's the bottom line?
Throughout this set of articles, I'm going to try to avoid naming any particular medicine by generic or brand name. There's two reasons for that. One is that I'm not trying to pick a fight with any particular drug company or group. The second is that I have absolutely no expertise in medications or the practice of medicine in general. I do not want to leave the impression I'm trying to make any statement about the value of a particular statement.
I will be happy to share my data and analysis with anyone who wants to see the actual names and numbers.
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