TO:

Ohio Reporters and Editorial Page Editors

FROM: Dale Butland, Ohioans Against the Deceptive Rx Ballot Issue
DATE: September 7, 2017
RE: Ohio Experts Demolish Yes Campaigns Savings Study

On August 24, the Yes on Issue 2 campaign released a report by Professor Max Mehlman of the Case Western
Reserve University School of Law that claimed passing Issue 2 could save Ohios state government as much as
$536 million per year.

The evidence for Prof. Mehlmans claim consisted of a single footnote, which referenced a different study
done by Patrick Murray, a medical doctor also affiliated with Case Western, who has no discernible expertise
in either state budgeting or procurement. Moreover, Dr. Murrays analysis concluded that the most likely
savings would be $350 million per year, not only far less than the amount touted by Prof. Mehlman, but also
$50 million less than the $400 million still routinely claimed by the Yes campaign.

A panel of expertsincluding a former state budget director and three former Ohio Medicaid Directors who
administered that program under the last four Ohio governors and have extensive experience in state
budgeting and procurementhave examined Dr. Murrays study in depth, along with his estimated savings.

Their report is attached for your review. In brief, they conclude:

Dr. Murrays methodology is extremely flawed, and his savings estimates are entirely dependent
on a host of assumptions that are either unjustified, unexplained, or in some cases, patently false.
Dr. Murrays insistence that Issue 2 could be implemented is based on his unsupported belief that
the precise discount and rebate amounts obtained by the VA are publicly disclosed, despite a clear
statement to the contrary by one of the sources cited in his own study.
Dr. Murrays analysis does not acknowledge that two-thirds of the Medicaid savings he envisions
would go to the federal government, not the state of Ohio.
Dr. Murray does not consider or even mention the hardship, as well as the significant personal and
financial costs, that enactment of Issue 2 would inevitably impose on actual Ohio consumers, such
as higher co-pays for state employees, cost shifting to pharmacies and privately insured Ohioans or
that certain drugs might have to be dropped from coverage altogether.
Perhaps most damning of all, Dr. Murrays savings estimate does not accurately take into account
the federally mandated and voluntarily negotiated discounts and rebates that Ohio already receives,
which in many cases match or are extremely close to those enjoyed by the VA.

Paid for by Ohioans Against the Deceptive Rx Ballot Issue

I hope you will find the time to read this analysis.

After all, even the Yes campaign now concedes that Issue 2 would NOT reduce drug costs for the nearly two
out of every three Ohioans who have private insurance or employer-provided insurance, rely on Medicare or
otherwise do not obtain their drugs through state programs. So, if as the experts conducting this study
suggest, Issue 2 is also unworkable, would harm Ohioans who rely on state pharmacy programs and would
not achieve the savings touted by its proponents, the rationale for its passage entirely evaporates.

Paid for by Ohioans Against the Deceptive Rx Ballot Issue