Who is Michael Weinstein, the man behind Issue 2?


With millions of dollars worth of advertising both for and against Issue 2 dominating television airwaves, Ohioans have seen an unfamiliar face as the topic of both criticism and praise.

Michael Weinstein has been called out by opponents of Issue 2 — the prescription drug price ballot issue — as a greedy “health care CEO,” who makes his money off prescription drugs.

But ads from Issue 2 supporters, primarily funded by Weinstein’s own AIDS Healthcare Foundation, tell a different story, highlighting his humanitarian efforts and the more than 800,000 people AHF serves around the globe.

RELATED:Ohio’s drug price ballot issue: What’s really going on?

Ohio Issue 2, an initiated statute on the Nov. 7 ballot, would require that state health care programs like Medicaid pay no more for prescription drugs than the lowest price paid by the U.S. Department of Veteran Affairs.

It would also give the four named petitioners — three of whom work for Weinstein — the right to intervene in any legal challenge brought against the law, with Ohio taxpayers picking up their legal fees.

So who is Michael Weinstein and why has he spent more than $5 million of his non-profit’s money on a ballot issue in Ohio?

$1.3B operation

Weinstein is the president and co-founder of the AIDS Healthcare Foundation, which is a non-profit global AIDS organization based in Los Angeles.

It started as a hospice for AIDS patients, but shifted to running clinics and pharmacies including several in Ohio. AHF also operates managed care Medicaid plans for individuals with HIV in California and Florida. A managed care plan is a Medicaid health plan that is administered by a private company on behalf of a state.

AHF is a $1.3 billion operation that makes about 80 percent of its revenue from selling drugs through its pharmacies.

As a non-profit, AHF uses that revenue to continue offering services, it says, including free HIV testing and treatment for those who do not have the ability to pay,

Supporters say Weinstein’s salary is modest when compared to other directors of large non-profits. He was paid $403,093 in 2015 according to tax filings.

MORE: Your questions answered about Issue 2

He’s been criticized for running his non-profit more like a business, aggressively driving revenue. But Weinstein defends AHF’s business model, saying the more money it brings in, the more free services it can offer those in need.

AHF conducts about 5 million free HIV tests every year and worked to bring down the price of AIDS treatments in Africa from about $5,000 per patient per year to $75, according to the non-profit. Those same treatments cost about $30,000 per patient per year in the U.S.

“All the dollars earned go back into our mission,” Weinstein said on a call with Ohio journalists this week. That mission includes medical care, prevention, testing, treatment and advocacy like Issue 2.

‘On the front line’

Some have questioned the political fights that Weinstein has chosen to back with AHF advocacy funds — including some that don’t seem to have any connection to health care or the non-profit’s mission.

AHF backed a failed measure nearly identical to Issue 2 in California last year, and lost a campaign to require condoms be used by pornography actors statewide. Weinstein got a similar condom measure passed in Los Angeles County in 2012.

But he also led a petition drive in Mississippi to remove Confederate symbols from the state flag and funded a campaign in Los Angeles last year that sought to halt construction on most new residential towers for two years. That included stopping a 28-story project across the street from his global headquarters, according to the New York Times, which profiled him in April.

The construction measure was rejected by voters by a 2-to-1 margin.

Dennis Willard, a spokesman for the Yes on 2 campaign said Weinstein should be lauded for his advocacy, not forced to defend it.

“Mr. Weinstein has been on the front line fighting for better and cheaper medicines since the ‘80s. He knows the biggest obstacle to treatment is the high cost of prescription drugs. He has tried to do anything and everything he can to ensure access to affordable care,” he said.

‘Litigious nature’

Sometimes that fight has involved lawsuits.

The opposition campaign says Weinstein and his organization have filed at least 52 lawsuits against government agencies in multiple states, including three in Ohio.

Most recently, the AIDS Taskforce of Greater Cleveland, which became part of Weinstein’s AHF in 2015, sued the Ohio Department of Health when it was denied 2017 grant money due to turning in an incomplete application and having prior non-compliance, according to court records.

AHF asked a judge to overturn the decision, and also filed an injunction that would have prevented any other AIDS organizations from getting their grant money until the matter was resolved in court. Cuyahoga County Judge Sherrie Miday denied that injunction in June, but the lawsuit against the department of health is still pending.

RELATED: More than $20 million in ads to hit Ohio airwaves on Issue 2

Opponents of Issue 2 are concerned that this litigious strategy could end up costing Ohio taxpayers because of a provision in the ballot language never before seen in the state.

Issue 2 gives four named petitioners — William Booth of Dayton, Daniel Darland of Dayton, Tracy Jones of Bedford Heights, and Latonya Thurman of Columbus — a personal stake in defending the act if passed.

That means if the law were to be ruled unenforceable, they would have personal liability up to $10,000. It also means they can join in the defense of the law with Ohio taxpayers paying their legal fees, and there is no limit on that cost.

Booth, Jones and Thurman all work with AHF either as employees or contractors. Booth has worked with AIDS groups for years and is HIV positive. He met Darland through his work in health care and helped him get money to pay for needed prescriptions.

Booth said the group of petitioners cares ardently about Ohioans having access to affordable health care and the legal piece of the ballot issue is simply to protect them from being sued.

But Weinstein said this provision was included so supporters of Issue 2 can make sure the state implements and enforces the law. He cited cases in California where voters approved a measure, but the state declined to put it in action. 

RELATED:Consumers kept in the dark over drug pricing

Weinstein said he doesn’t see this legal scenario coming to pass because Ohio Attorney General Mike DeWine has said he’d enforce the law.

According to Ballotpedia, a non-partisan elections resource, this kind of provision has never been used on an Ohio ballot measure.

‘Savior’

Jones said Weinstein gets a bad rap and doesn’t get enough credit for the work he does around the globe. No other organization is serving 800,000 HIV and AIDS patients, she said, “and it takes money to do that.”

She first met Weinstein while working as as the executive director of the AIDS Taskforce of Greater Cleveland. As that organization struggled to keep its doors open after the recession she initially avoided calling AHF because she’d been warned by others in the AIDS health care world not to work with Weinstein. But desperation set in, she said, and she asked for a meeting with AHF employees from Columbus.

To her surprise, Weinstein himself showed up at her office.

“He said, ‘Tracy we’re going to help you. Your voice as an organization needs to survive,’” Jones said. “I absolutely adore him, because he cares deeply about the patients that he serves.”

RELATED:High cost of prescriptions puts some drugs out of reach

He agreed to take the task force under AHF’s umbrella as an affiliate organization, to pay off its debt, and to create a medical facility and pharmacy in Cleveland.

“He saved us from imminent demise,” Jones said. “He is the savior of the AIDS Taskforce of Greater Cleveland.”

‘Significant advantage’

One question that has been raised by some opponents of Issue 2, is whether AHF stands to profit — via increased market share for its pharmacies — if Issue 2 passes.

The Ohio Pharmacists Association is against the ballot issue because they say small, independent pharmacies would be hurt by it. While Issue 2 would require that the state not pay more than the VA’s lowest price for drugs, it doesn’t change what the pharmacy pays to purchase the drugs, and it doesn’t change their costs to operate. What will result, they say, is a pharmacist paying the same $10 for a drug they are paying now, but being reimbursed something like $5 by Medicaid.

That same scenario would impact AHF pharmacies as well, but they are eligible to buy drugs at deep discounts through the federal 340B program and Ryan White Act funding opportunities. This is the business model that helps AHF bring in such high revenues. Their pharmacies buy discounted drugs, sometimes as little as pennies on the dollar, and then get reimbursed at market rates by their patient’s health plans. Many AHF patients are on Medicaid.

Willard said AHF will experience cuts to those reimbursements if Issue 2 passes, just like every other pharmacy.

“It will actually lower the AIDS Healthcare Foundation’s bottom line because the foundation will be generating less revenue from lower priced drugs,” he said.

But pharmacists still see the 340B discounts as giving AHF pharmacies a leg up.

“There’s little disputing that this initiative will likely give pharmacies like theirs a significant advantage over their competitors,” said Antonio Ciaccia, ‎director of government and public affairs for the Ohio Pharmacists Association.

Willard says that’s not the case and AHF’s interest in pushing Issue 2 in Ohio is purely out of a desire to send a message to drug companies that price-gouging must stop.

“If the AIDS Healthcare Foundation road to market dominance is buying drugs at deep discounts through Ryan White then why haven’t these pharmacies… already gone out of business?” he asked.

In fact, many have. Ohio lost a net 90 community pharmacies in 2016 and the OPA fears Issue 2 will only exacerbate the problem, either forcing more pharmacies to close or to stop accepting Medicaid.

“It’s the pharmacists then that will back out the Medicaid program,” said John McCarthy, former Medicaid director under Governor John Kasich. “Then you have a whole bunch of people that would not easily be able to access their drugs anymore.”

MORE: With small pharmacies disappearing, Medicaid reimbursements seen as culprit



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