Industry Sues to Block Ohio's Drug Pricing Initiative

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By Bebe Raupe

March 2 — Opponents of a drug price relief proposal heading for November’s ballot want the Ohio Supreme Court to take a look at the underlying initiative petitions. 

Supporters of the ballot measure said the move is an “act of desperation” by big pharma intended to keep the initiative—to revise Ohio law and require state programs to pay no more for prescription medications than the Department of Veterans Affairs—off the fall ballot.

The Pharmaceutical Research and Manufacturers of America, the Ohio Manufacturers’ Association (OMA) and the Ohio Chamber of Commerce filed suit Feb. 29 with the state's high court, challenging the petition initiative.

Specifically, the lawsuit asks the court for an order invalidating “part-petitions” of the petition supporting the “Ohio Drug Price Relief Act.” It alleges that certain part-petitions were circulated by individuals who listed a false permanent address; that part-petitions were altered by someone unauthorized to do so; that the petition effort employed ineligible felon circulators; and that over 1,400 part-petitions contain false circulator statements.

Laws Ignored

Ryan Augsburger, public policy chief for the OMA, told Bloomberg BNA March 1 that the group objects to the fact that laws governing a ballot initiative weren't followed.

“Election rules exist because changing law through initiated petition is serious business,” Augsburger said. “In this case, the proponents demonstrated an alarming degree of disregard of the law. At the same time, they offered a proposal that is vague and unclear.”

Once illegally gathered part-petitions are disqualified, the initiative fails to meet Ohio constitutional requirements, he said. If the court rules that these petitions are invalid, supporters then would get the chance to gather more signatures in a lawful manner and resubmit a petition that complies with Ohio law.

Secretary of State Jon Husted (R) sent the initiated statute to the Legislature in early February, following an unprecedented second review of the signature petitions by all 88 county boards of election .

Initiated Statute Process

Under Ohio’s initiated statute process, lawmakers have four months to pass a citizens-proposed law; if they don’t, supporters may gather another 92,000 signatures on top of those already collected and put the question on the ballot.

Augsburger said submission of the petition to the Ohio General Assembly was premature, adding that the proposal, as written, won't achieve lower drug prices.

The initiative wouldn't benefit the vast majority of Ohioans, those covered by private employer plans or Affordable Care Act policies, said Augsburger. Moreover, he said, “because the proposal offers few details and no clarity on how drug pricing from the Veterans Affairs department would even be obtained, there are reservations about whether the state could ever implement the statute.”

Critic: Desperate Move

According to the measure’s supporters, VA pricing is believed to be 20 percent to 24 percent lower than for almost any other government program.

Attorney Don McTigue, who has been working on behalf of the ballot initiative supporters, said the lawsuit’s claims regarding the laws governing citizen petitions are wrong, as evidenced by the Secretary of State’s determination that the initial ballot petition was valid and that it contained sufficient valid signatures.

“This is a desperate move by the pharmaceutical industry and the special interests who support them to keep Ohioans from voting on a proposed law that would dramatically lower prescription drug costs for consumers,” said McTigue, adding, “it is unclear whether they have even filed in the correct court.”

Michael Weinstein, president of the AIDS Healthcare Foundation (AHF), the Ohio initiative’s primary financial supporter, called the lawsuit “an act of desperation” by the drug industry. It is a clear indication that the pharmaceutical industry knows that it can't win its case on drug pricing with the public at the polls in November, Weinstein said in a prepared statement.

He called for the Ohio General Assembly to take swift action on the initiative and, if it is voted down, let supporters begin the next round of collecting signatures needed to put the issue before voters in November.

Bricker & Eckler LLP in Columbus represents the industry groups, which are termed relators, in the lawsuit.

To contact the reporter on this story: Bebe Raupe in Cincinnati at braupe@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

The complaint is available at http://src.bna.com/cZM.