Nevada Releases Diabetes Drug Transparency Report and Passes SB262 Adding Asthma Drugs to the Report

We have previously written about the law in Nevada requiring reporting for pharmaceutical representatives and the law that requires patient advocacy organizations to report all payments they receive from industry, regardless of the nature of the payment.  At the end of May 2019, Nevada released a report on drug transparency for diabetes drugs.  The report showed that for 2018 price the increase was significantly less than the increase in 2017.

In addition, the Nevada Governor signed SB 262 into law, expanding that mandated diabetes price reporting to include reporting on asthma medications.

The Drug Transparency Report

On May 31, 2019, the Nevada Department of Health and Human Services (DHHS) released the “Drug Transparency Report: 2019 Essential Diabetes Drugs.” As required by a 2017 law, the report is compiled based on information submitted by manufacturers and pharmacy benefit managers (PBMs) and highlights the price of prescription drugs that appear on the list curated by the Department. It includes reasons for any price increases and the impact of those prices on overall spending on prescription drugs in Nevada.

For the 2019 essential diabetes drug (EDD) list created by DHHS, there were 695 National Drug Codes (NDCs), each of which represents a specific drug formulation, dosage, and packaging specification. Of those, there were 52 distinct nonproprietary drugs.

To identify which EDDs experienced a significant price increase, DHHS compared the percentage price increase of the drug from 2017 and 2018 calendar years to the Consumer Price Index (CPI) Medical Care Component. As noted in the below table, 155 of the listed EDDs (22%) experienced a significant price increase during that period.

DHHS further analyzed the frequency of significant price increases over the time periods analyzed and found that roughly 60% (93) of the EDDs that experienced a significant price increase had a qualifying increase during both the one- and two-year periods.

The average price increase for EDDs with a significant price increase over the prior calendar year was 6.4%, while the average increase over the preceding two-year period was 21.7%.

The report goes on to analyze Medicaid expenditures, the average cost of drug production and administrative costs versus average profit for the manufacturers and outlines the justifications manufacturers provided for the price increases.

The report also covered the reporting of samples by sales representatives.   According to the report “56% of active representatives were either not active in distributing samples or compensation at the thresholds established in law in Nevada or failed to report eligible events.” Because the definition of rep includes reps in training, MSL’s, regional and district managers, it is not out of the norm for only 44% to be distributing samples or providing meals to offices.

Nevada S.B. 262

Nevada Governor Steve Sisolak signed a bill on May 30, 2019, that expands Nevada’s current drug pricing transparency law to also require manufacturers of asthma drugs and those who facilitate the sale of asthma drugs to disclose certain costs and profits to the state.

Under S.B. 262, manufacturers of asthma drugs whose prices have increased significantly will be required to report specific data to the state for each drug including the cost of producing it, administrative expenditures including marketing and advertising costs, profit earned, financial assistance provided to help patients, and coupons and rebates offered. The legislation defines a significant price increase as one that exceeds the percentage increase in the medical care component of the Consumer Price Index in the preceding year, or twice the rate of medical CPI over the prior two years.

PBMs will also be required to report any rebates they negotiated and any profits they retained associated with asthma drugs that experienced significant price increases.

Nevada state Senator Yvanna Cancela, the sponsor of the bill, wanted to include asthma drugs in the law because of the high number of state residents who struggle with asthma – roughly one in ten adults and one in nine children – and the costs associated with treating the condition. “This bill takes the first step in answering the question, ‘Why is it so expensive to have asthma, to care for asthma?’” Cancela said. “This will not solve the problem for the high costs of asthma medications, but it does shed light and help us come up with solutions.”

Nevada Governor Sisolak noted that his daughter has diabetes and asthma and believes that this legislation is another step in the direction of quality, affordable healthcare. “The hundreds of thousands of Nevadans living with asthma deserve to know that the price they’re paying for their medication they need to breathe is fair, and this bill will help shed some light on factors affecting these drug prices,” Sisolak said.

The Pharmaceutical Research and Manufacturers of America (PhRMA) has raised concerns during hearings that certain confidentiality regulations adopted by the state would only apply to diabetes drug reporting and not the new asthma drug reporting. “The framework for protection of trade secrets …  were written by referencing the specific bill that created those sections,” PhRMA said. “The confidentiality language in the regulations for the diabetes transparency bill should be adopted in SB 262 to clarify that the requirements and considerations apply to disclosures required by those sections of statute generally and not just pursuant to any specific bill.”

Other Nevada Legislation

Nevada is also considering establishing a Patient Protection Commission (SB 544), which would perform a total review of the state’s healthcare system, and would include representative members from a variety of industries and perspectives, including one representative from the pharmaceutical industry.

Lastly, proposed SB 276 would direct the Legislative Commission to appoint a committee to conduct an interim study on the costs of prescription drugs in the state and what impact rebates, price reductions, and other remunerations from drug companies have on prescription drug prices. This bill was passed and has been sent to Governor Sisolak’s desk for his signature.