Dive Brief:
- Poll after poll has shown Americans are fed up with rising prescription drugs costs, but with the lack of drug pricing legislation coming out of Congress, states are taking matters in their own hands — and Nevada looks to be the next in line.
- Gov. Brian Sandoval, R, told reporters he plans to sign a reconfigured bill that passed the state's Assembly and Senate on Monday, according to The Nevada Independent. Dubbed SB 539, the legislation requires drug manufacturers and pharmacy benefit managers (PBMs) to provide information to the state about price increases for essential diabetes medications.
- The original bill aimed at diabetes drug pricing, SB 265, died on June 2 after Sandoval determined that it didn't go far enough to protect consumers in the state. "While certain aspects of this bill are laudable, including provisions benefiting students suffering from diabetes, SB 265 also poses serious risk of unintended and potentially detrimental consequences for Nevada's consumer patients, not the least of which is the possibility that access to critical care will become more expensive, more restricted, and less equitable," he wrote in a letter to Nevada Senate Leader Aaron Ford.
Dive Insight:
Should Sandoval follow through and bring SB 539 to law, Nevada would be the latest state to up the ante for transparency regarding drug pricing.
Just last week, Maryland Gov. Larry Hogan allowed a bill rallying against price gouging to pass (though he didn't sign it). That legislation permits Maryland's attorney general to request pricing information from manufacturers of essential generic treatments, and gives other state officials the power dole out fines and restrictions against drugmakers who have unreasonably hiked prices.
The Maryland legislation goes a step further than similar bills across other states, as it can apply to any copycat product that has seen a wholesale acquisition cost increase of 50% or more over the last five years. The revamped Nevada pushes the limits as well, establishing robust requirements for multiple parties involved with drug pricing.
One of Sandoval's issues with SB 265 was its failure to account for "market dynamics," particularly the role PBMs play in determining out-of-pocket costs for patients. To cover that base, lawmakers funneled the bulk of the bill's text into SB 539, another would-be-law sponsored by Republican Senate leader Michael Roberson that originally aimed to impose certain transparency rules on PBMs.
Now, the amended bill pertains to manufacturers and PBMs. Its provisions make Nevada's Department of Health and Human Services responsible for compiling a list of essential, prescription diabetes drugs that have undergone "significant" price increases in the past two years. The state can then call on companies producing those drugs and PBMs involved in their pricing to provide information about pricing decisions.
Another of Sandoval's concerns over SB 265 was its requirement that diabetes drug developers publicly disclose pending pricing increases 90 days before they would take effect. Such a mandate could prompt wholesalers and distributors to "stockpile" medicines to sell for higher prices later on, he argued.
Yet in spite of the changes made to SB 539, fears over how the bill would negatively affect the market and consumers haven't dissipated for some industry stakeholders.
"PBMs support transparency that offers consumers and plan sponsors like labor unions, employers, and health plans the information they need to make the choices that are right for them," the Pharmaceutical Care Management Association, a PBM trade group, said in a June 7 statement regarding SB 539. "However, this bill would grant the kind of transparency that the Federal Trade Commission and economists say will raise costs by giving drug companies inside information that would empower them to collude with their competitors."