Nevada just passed one of the strictest drug pricing transparency laws in the country
The bill, originally introduced in March by state Senator Yvanna Cancela, has faced opposition from lobbyists and nonprofit patient groups that disagree with the bill's approach to reining in prescription drug spending. Even so, the bill, known as SB 265, has passed the Senate on May 19 and the Assembly on May 25.
On June 2, Nevada Governor Brian Sandoval vetoed the bill. But it got a second life when it was attached onto another piece of pharma legislation, SB 539. The bill now places a greater focus on the middlemen in the drug industry. Sandoval signed that bill into law on Thursday.
Nevada is one of 23 states with proposed legislation to take on the rising cost of prescription drugs. But unlike others that focus on drug prices in a general sense, the hybrid bill focuses on two specific groups of drugs that are used to treat diabetes: insulin and biguanides.
It's the latest milestone in government actions at the local, state, and national levels that attempt to change the way we spend money on prescription drugs.
Here's what the law does
- The law requires diabetes drugmakers that have raised drugs' list prices by a certain amount to disclose information about the costs of making and marketing the drugs, along with what rebates they provide.
- Pharmacy benefit managers, the companies responsible for negotiating rebates to the prices drugmakers set, will also have to disclose what rebates they negotiate with diabetes drugmakers, along with what rebates the PBMs keep.
- The law also works to create more transparency around PBMs, compelling them to act in insurers' best interests and bans PBMs from forbidding pharmacists from discussing lower-cost options with patients, something called a gag clause.
- The law requires pharmaceutical sales representatives to register with the state and have them supply certain details about the conversations they have with healthcare providers. It's modeled after an ordinance in Chicago that requires representatives to get a special license. Chicago's ordinance goes into effect in July.
- Nonprofits will have to disclose when they get funding from drug companies, PBMs and health insurers. A March report published in the New England Journal of Medicine found that eight in ten patient advocacy groups had received some level of drug industry funding. Some of the organizations included in the report did not disclose donor information.
It's a slight departure from some of the original intentions of the diabetes bill. SB265 originally set up a price control, which could effectively cap insulin price increases at the rate of inflation. And an earlier version of the bill required drugmakers to disclose how they set their drug prices, as well as provide information about how much is spent on marketing and research. Both sections were amended before the bill joined up with SB 539.
Why Nevada is focusing on diabetes
Diabetes is a group of conditions in which the body can't properly regulate blood sugar that affects roughly 30 million people in the US. And for many people living with diabetes - including the 1.25 million people in the US who have Type-1 diabetes - injecting insulin is part of the daily routine.
The list price of the most commonly used insulins have increased roughly 300% over the last decade. Technically, there's no "generic" insulin, though a cheaper version of a long-acting insulin did come on the market in 2016. There are cheaper medications for biguanides, such as metformin, which are used to treat Type-2 diabetes.
Before becoming a state senator, Cancela worked as a director for the Culinary Workers Union in Las Vegas, which represents about 60,000 workers. The union pays for its members health insurance through a self-funded trust, which Cancela told Business Insider gave the organization a lot of access to details about how its health funds were being spent. One of the drugs she noticed was becoming a problem for members was insulin.
There are roughly 281,000 adults living in Nevada, or 12% of the total population, that have one of the two types of diabetes, with another 39% in the prediabetes stage, in which blood glucose levels are elevated but not to the point of type-2 diabetes.