CARSON CITY, Nev. — Nevadans dismayed by soaring drug prices told lawmakers Wednesday the state should take unprecedented action to curb costs.
A coalition of hotel and casino owners, union leaders and Democratic lawmakers are attempting to mandate pharmaceutical companies refund people for overpriced American insulin.
The bill targets diabetes medications, which regulate glucose and insulin levels, and would require drugmakers to reimburse Nevada patients and insurers for what they pay above the highest price in other developed countries for the same prescriptions. Drugmakers would also have to reimburse people if American insulin prices increase more than inflation would suggest they should.
Diabetics and the family of people who died after they could not afford crucial blood sugar treatment pleaded with lawmakers for change at a legislative hearing.
“Essentially it would mean a lot more people would be alive today and it would mean a lot of my friends would be able to live a healthy life,” said Christopher Hughes, a 14-year-old Las Vegas resident who was diagnosed with Type 1 Diabetes when he was 1 years old.
The policy under consideration in Nevada is unique among crusades against America’s colossal, free market pharmaceutical industry.
Similar to proposals in other states, though, it’s unclear how drug companies would react to the rules or whether the government can viably force private businesses to take action on prices.
In an effort to determine what drives price increases, whether companies are synchronizing them and why more generic drugs are not on the market, the bill also seeks drugmakers’ business expenses relating to insulin.
Senate Bill 265 would require manufacturers to disclose the costs of all research, materials, manufacturing and administrative expenses that go into producing drugs for diabetics. Additionally, it would force them to notify government health agencies and insurance companies 90 days before they increase prices above the preceding year’s inflation rate.
Furor over high drug prices has pushed some companies, including Johnson & Johnson and insulin-maker Sanofi SA, to voluntarily release recent data on their price increases. But experts say that that alone will not lead to patients paying less for their prescriptions.
Drugmakers have long argued that prices reflect — and fund — scientific breakthroughs that save lives. In a report published Wednesday, an organization of drug industry leaders also blamed insurance companies for increasingly shifting prescription costs to patients.
Drug pricing is complicated, fluctuating between many layers of middlemen and regulations along with rebates for insurers that buy in bulk, drug companies’ lobbyist Kipp Snider said. He argued the bill, which would base reimbursements on sticker prices, improperly takes aim at a moving target.
“That’s not really the price that is in play,” Snider said, later adding “it’s not that simple in the real world.”
Nevada’s proposal would also have the state license all pharmaceutical sales representatives — a move the Chicago City Council approved last year to shed light on people whose jobs it is to persuade doctors to prescribe their drugs.
Implementing that program in Nevada would cost about $350,000 and upkeep would cost $125,000 annually after that, according to the state Department of Health and Human Services.
State analyses published alongside the bill do not speculate as to potential market ramifications or costs to defend the policies in court. In states that have pursued policies to control drug prices, including major proposals in California and Ohio, analyses have pointed to the risk that prices could instead increase.
“In practice, it will not help Nevada patients,” said Pharmaceutical Research and Manufacturers of America spokeswoman Priscilla VanderVeer. “The proposal instead threatens access to needed prescription drugs and the innovation of future treatments, and will likely provide third parties — including insurers — with a windfall.
Still, Bobbette Bond of Unite Here Health argued, “doing nothing is more risky.”
Proponents believe that limiting the crux of the bill to drugs that treat diabetes could make it politically palatable for business-friendly lawmakers and Republican Gov. Brian Sandoval, who declined to comment on the measure Wednesday.
A study published in the Journal of American Medicine last year said average insulin prices in America tripled from 2002 to 2013. Researchers generally agree a lack of competition or generic prescription options in the Unites States drive drug prices considerably higher each year.
Measures have been placed on California and Ohio ballots to cap what those states pay for all prescription drugs at the lowest price the U.S. Department of Veterans Affairs pays.
California’s Proposition 61 was voted down last year after the pharmaceutical industry spent more than $100 million to oppose it. Ohio’s measure will go before voters this November.
In Oregon, legislation proposed this year would draw on corporate taxes to reimburse in-state patients and insurers for “unusual pharmaceuticals” — particularly expensive drugs. House Bill 2116 was heard for the first time early this month.
Nevada bill proponents were encouraged in January when diabetics filed a lawsuit in a Massachusetts federal court against insulin manufacturers they say coordinated price gouging. In a separate case, a $100 million settlement was announced in January after five states claimed drugmakers had monopolized a drug that treats multiple sclerosis among other neurological diseases.