- Industry trade groups PhRMA and BIO have linked up to challenge a Nevada law that requires drug manufacturers and pharmacy benefit managers (PBMs) to provide information to the state about price increases for diabetes drugs deemed essential.
- The groups last week initiated litigation in the United States District Court for the District of Nevada, claiming Nevada's law "would violate patent rights and negate trade secret protection for designated diabetes medicines in a way that would harm patients and chill future biomedical innovation."
- The law, passed by Nevada in June, demands increased transparency around drug pricing from both manufacturers and pharmacy benefit managers (PBMs). PhRMA and BIO's complaint argues the law violates the U.S. Constitution by interfering with federal patent and trade secret laws.
Editor's note: This article has been updated.
The rising cost of prescription drugs has been a concern for the U.S. government at all level, both Federal and State. President Donald Trump has discussed pricing with pharma companies and has even suggested the government to be able to negotiate prices directly with drugmakers under Medicare. He sent stocks spiraling earlier this year when he stated that pharmaceutical companies were "getting away with murder."
However, little has actually changed at a federal level, so it seems that individual states are taking up the baton. By last month, there had been upwards of 90 bills introduced in state legislatures, including Vermont, and Maryland, which are asking for justification for list price increases over certain levels. But pushback from industry is intensifying, as exemplified by the action against Nevada, based on concerns over the impact on drug R&D.
"[Pharmaceutical] research is incredibly expensive and risky, and we know from experience that very few development programs will make it all the way to approval. Nevada’s law is, in actuality, an attempt to set de facto price controls on the few successful products that do make it to market, and in doing so, it will chill the massive private investment needed to spur our amazing biomedical innovation ecosystem that is providing hope to patients in Nevada and throughout the world," said Tom DiLenge, BIO’s president for Advocacy, Law, and Public Policy.
BIO and PhRMA are also worried about the knock-on effect to other states.
"If provisions of SB 539 go unchallenged, then Nevada’s law will conflict with and in many cases override federal law and the laws of 49 other states – laws that foster pharmaceutical innovation and protect intellectual property and trade secrets. For this reason and others, provisions of SB 539 are unconstitutional and should not be implemented," said James C Stansel, PhRMA EVP and general counsel.