Nevada's Sandoval Signs Insulin Transparency Law

The new law includes requirements that drugmakers reveal discounts for pharmacy benefit managers and prevents gag rules on pharmacists who want to suggest cheaper alternatives.
Published Online: June 19, 2017
Mary Caffrey
Backed by his state’s powerful Culinary Union, Nevada Governor Brian Sandoval last week signed the nation’s most far-reaching transparency law aimed at requiring insulin manufacturers to reveal how they set prices.

Supporters of the law say its purpose is to protect people with diabetes who depend on insulin from unexplained price increases, which they say have come with more frequency and are threatening the health and finances of people with both type 1 diabetes (T1D) and type 2 diabetes (T2D).

A statement from the Culinary Union, which represents 57,000 workers in Las Vegas and Reno, said that diabetes costs Nevada $2.4 billion in medical costs and that 1 out of every 3 people who lives in the state has diabetes or prediabetes. An estimated 12% of Nevadans have diabetes.

As he signed the bill, Sandoval, a Republican, said one of the people affected by insulin prices was his grandfather. “This was my mom’s dad, and he’s somebody I saw suffer because of that,” he said, in remarks reported by the Las Vegas Review-Journal. He had declined to sign an earlier version of the legislation because he wanted greater focus on what he called the “middlemen” who play a role in price increases: the pharmacy benefit managers (PBMs). The law Sandoval signed includes such a provision.

Insulin manufacturers issued letters in opposition to the earlier version of the legislation. Published reports noted the muted response from well-known advocacy groups, and that the Culinary Union was the main force behind the bill.

Provisions in the final version include:
  • Requirement that drug makers annually disclose list prices for insulin, profits, and discounts to PBMs.
  • Drug manufactures must annually give Nevada health officials written reasons for insulin price hikes that exceed the state’s inflation rate or are twice the inflation rate the previous 2 years.
  • The law bars gag rules that prevent pharmacists from suggesting cheaper alternatives to high-cost insulin products.
  • Drug makers will be required to register sales representatives in the state, and groups that receive donations from pharmaceutical companies will face disclosure requirements.
  • The big 3 insulin makers face fines of $5000 a day for failure to comply. The law takes effect in October, with the first reporting deadline comes in April 2018.

Spokespersons for PBMs have suggested that the law’s requirements resemble rules that have been struck down at the federal level.

The cost of insulin has been the topic of hearings in Congress and sparked a class action lawsuit earlier this year.
 


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