Nevada forces drugmakers to reveal insulin pricing, profits
CARSON CITY, Nev. — Nevada Gov. Brian Sandoval signed into law Thursday the nation’s strictest requirements for pharmaceutical companies to reveal how they set certain prescription drug prices.
The bipartisan legislation focuses on insulin — one of many life-sustaining prescription treatments sold in the U.S. at prices that have skyrocketed over the last decade.
The law requires drugmakers to annually disclose the list prices they set, profits they make and discounts they give market middlemen on insulin.
They must also give state officials written explanations of any insulin price hikes that surpass the previous year’s inflation rate, or are higher than twice the inflation rate of the previous two years.
Market experts have said transparency on its own will not lower patient costs.
But a leading bill sponsor, Democratic Sen. Yvanna Cancela of Las Vegas, argued that detailed pricing data can start conversations about seeking even stricter regulations and at least could equip patients with information they could use to sue manufacturers for price gouging.
Nevada’s focus on insulin struck a chord nationally. Supporters from across the country flooded the governor’s mailbox and email inboxes with letters urging him to sign the bill while patient groups rallied proponents using social media.
Culinary Union 226, whose leaders shaped and lobbied for the legislation this year, organized some of its 57,000 members to hang fliers and knock on doors to promote the bill in the Las Vegas area.
“I’ve had several near-death experiences because I couldn’t afford my insulin,” Las Vegas resident Rita Neanover said in a Thursday statement from the union. “I’m so relieved Nevada is finally doing something about this issue.”
The bulk of the legislation takes effect in October, but the first disclosures will be due on April 1, 2018.
America’s three insulin manufacturers will face fines of $5,000 daily if they fail to provide the data without explaining why.
It was unclear whether opponents intend to comply with the law or challenge the rules in court.
However, the leading organization of market middlemen who negotiate prices between drugmakers and insurers, called pharmacy benefit managers, suggested that the law’s “costly fiduciary mandate” resembles legislation that federal courts have previously rejected based on violations of federal benefits laws.
They also believe that the law could raise their costs, said Pharmaceutical Care Management Association spokesman Greg Lopes.
It will “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,” Lopes said in a statement.
The law requires drugmakers to provide detailed information about their prices. Some companies already voluntarily make some of that information public, but Nevada’s law will mandate that they do so in greater detail.