Nevada Governor Signs Strict Drug Pricing Transparency Bill

Nevada Gov
Nevada Gov. Brian Sandoval signs a bill during a signing ceremony Thursday, June 15, 2017, in North Las Vegas, Nev. During the ceremony Sandoval signed Senate Bill 539, which aims to force America’s three insulin manufacturers to annually turn over the prices they set and profits they make on insulin. (AP Photo/John Locher)

Nevada has joined the growing group of states looking for new ways to combat high prescription drug prices.

Republican Governor Brian Sandoval signed a bipartisan bill into law on Thursday that is the first-in-the-nation diabetes drug transparency bill, according to the Nevada Independent.

The legislation, labeled SB539, requires manufacturers of diabetes drugs as well as pharmacy benefits managers (PBMs) to divulge information regarding certain costs and profits.

Furthermore, the PBMs must report to the state any rebates that are negotiated with these pharmaceutical companies along with the total amount of rebates retained by the PBMs.

Pharmaceutical sales representatives annually report details of interactions with physicians, which includes who they specifically visited along with samples or gifts they handed out due to new restrictions set by the bill.

Also, the bill bars PBMs, insurers, and other third parties from installing gag orders on pharmacists stopping them from talking about lower-cost alternatives to certain treatments with patients.

Non-profits will also need to disclose to the state when they get funding from pharmaceutical companies, PBMs, and health insurers, reported Business Insider.

SB539 is slightly different from the original bill called SB265, which sought provisions like making drug firms disclose how they established their drug prices as well as installing a price control that could essentially limit insulin price increases based on the rate of inflation.

Sandoval vetoed that iteration of the bill because he was concerned that it only authorized transparency from the manufacturers and not from PBMs.

“Complete transparency would shed light on every stage in the prescription drug supply process, and require all participants to share the same disclosure responsibility,” wrote Sandoval at the time adding the “selective and narrow approach reflected in this bill was unlikely to achieve sound public policy for patients in Nevada,” hence the new amendments incorporated into the bill.

However, he revealed during the signing ceremony that his grandfather had suffered from diabetes and he felt this new version of the bill was less susceptible to a legal challenge.

Nevada focused on diabetes because about 12 percent of the state’s adult population is diagnosed with this condition, per statistics compiled by the American Diabetes Association.

Diabetes and prediabetes costs the state an estimated $2.4 billion every year, which also has become more difficult since list prices for these therapies has roughly increased by 300 percent over the past decade as noted by Business Insider.