Requiring drug manufacturers to report pricing spikes, licensing pharmaceutical sales representatives and boosting the state’s purchasing power are among the legislative proposals being advanced by lawmakers for consideration during the 2021 Legislature.
The interim legislative committee on prescription drugs on Wednesday approved five bill draft requests — the maximum allowed. State Sen. Yvanna Cancela (D-Clark), who chairs the committee, said the broad range of proposals is an attempt to address the rising cost of prescription drug prices in a holistic way.
One of the proposals advanced would expand the existing reporting requirements on asthma and diabetes prescription drugs price increases to other medications. It’s a measure of transparency and data collection that several lawmakers and advocates say is necessary if the state is to tackle the complex issue of prescription drug pricing.
Manufacturers are currently required to report and explain any above-inflation price increases for prescription drugs considered essential to treating asthma and diabetes. Those reporting requirements were put in place by the Democratic-controlled legislatures during the 2017 and 2019 sessions. The bill draft being requested for the 2021 session would expand those requirements to encompass other medications whose prices increase beyond the consumer price index.
“The increase in health care costs has been significant,” said state Sen. Julia Ratti (D-Washoe). “If we’re going up 10, 12 percent a year… If a drug cost has gone up, we should be looking at why.”
Nevada’s most recent report on asthma and diabetes prescription drugs found that one in five diabetes medications saw a significant price increase during the past one or two years. The average hike for those essential medications whose costs increased significantly: 19.4 percent.
Cancela added the proposal was drafted “directly in response” to public outcry from Nevadans whose medications for chronic conditions have become increasingly expensive.
“Currently we don’t have a way as a state to answer the question of why those drugs have increased so significantly,” she said.
Nevadans describing the financial, physical and mental strain caused by expensive medications have been a staple in the public comment periods during meetings of the interim committee on prescription drugs. Wednesday’s meeting was no different.
Davene Kaplan, a 65-year-old Reno resident, told lawmakers that Medicare refuses to cover two medications for a chronic illness she’s managed for more than two decades, despite her previous insurance covering the medications and her prescribing doctor filing several appeals on her behalf.
“The cost for both medications is over $900 a month. My former insurance covered these drugs for $45,” she said. “I am appalled at the price gouging and denial of coverage for drugs needed for me to maintain a healthy quality of life.”
A second proposal would allow the state to require licensure of pharmaceutical sales representatives operating within the state. Currently, drug manufacturers are required to submit a yearly list of all their pharmaceutical sales representatives, as well as information about compensation and samples provided to various medical facilities and health providers. However, no state license is required.
State Sen. Joe Hardy (R-Clark) and Assemblywoman Melissa Hardy (R-Clark) voted against advancing that bill draft request. The former Hardy expressed opposition to the state requiring licensure. The latter expressed similar concerns.
Assemblywoman Connie Munk (D-Clark) voted to advance the bill draft request but prefaced her vote by saying she had concerns and was not committed to supporting the effort during the session next year.
A third proposal looks toward licensure for another group: pharmacy benefit managers — the administrators of prescription drug plans. Under this proposal, pharmacy benefit managers would be required to obtain a license from the state. Additionally, their only source of income could be from disclosed administration fees for services, and not from “spread pricing” where they take a cut as medication payments go between insurers and pharmacies.
State Sen. Hardy voted to advance the bill draft request. While doing so, he acknowledged that “a discussion on PBMs needs to be had” but emphasized his right to vote against any actual proposal after it’s drafted and discussed during the regular legislative session.
A fourth proposal would allow the Nevada Department of Health and Human Services to establish or enter inter- or intrastate coalitions that consolidate purchasing power and allow for better negotiation while buying prescription drugs in bulk.
The final proposal advanced by the committee would require at least half of the health plans offered by providers in Nevada to offer prescription drug coverage from the first day of coverage with no deductibles. The bill would also require fixed copays, and limit copays.
That proposal was not originally included on the interim committee’s agenda and meeting packet on Wednesday. The bill draft request was proposed by the Pharmaceutical Research and Manufacturers of America (PhRMA).
Maya Holmes from the Culinary Health Fund, which proposed three of the five bill draft requests advanced by the committee, criticized the PhRMA proposal, saying that the pharmaceutical industry’s solution would merely shift costs to other things, like higher premiums for customers, and also would not help anyone uninsured.
“We have the most expensive healthcare system in the world,” said Holmes. “Not because we use more health care. We don’t. Not because we have better healthcare. We don’t. Not because we have better outcomes. We don’t. It is because we pay the highest prices in the world for our healthcare, and prescription drugs are a critical driver of those health care prices.”