Life Science Compliance Update

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June 14, 2017

Nevada Bill Requiring Patient Advocacy Transparency – Governor Expected to Sign Soon

Stern Lecture

After being vetoed the week before the Nevada State Legislature passed a bill to combat drug prices but also requires patient advocacy organizations to report all payments they receive from industry regardless of the nature of payment including research, education, and donations.

The bill was delivered to the governor on June 8th and is expected to be signed by the Governor as early as Thursday, June 15th, the Governor stated to the local press that he would be proud to sign the bill.

Relative association language includes:

On or before February 1 of each year, a nonprofit organization that advocates on behalf of patients or funds medical research in this State and has received a payment, donation, subsidy or anything else of value from a manufacturer, third party or pharmacy benefit manager or a trade or advocacy group for manufacturers, third parties or pharmacy benefit managers during the immediately preceding calendar year shall:

(a) Compile a report which includes:

(1) For each such contribution, the amount of the contribution and the manufacturer, third party or pharmacy benefit manager or group that provided the payment, donation, subsidy or other contribution; and

(2) The percentage of the total gross income of the organization during the immediately preceding calendar year attributable to payments, donations, subsidies or other contributions from each manufacturer, third party, pharmacy benefit manager or group; and

 (b) Except as otherwise provided in this paragraph, post the report on an Internet website that is maintained by the nonprofit organization and accessible to the public. If the nonprofit organization does not maintain an Internet website that is accessible to the public, the nonprofit organization shall submit the report compiled pursuant to paragraph (a) to the Department

There are applicable fines in the bill of up to $5,000 per day fine for failure to provide information requested.

If a manufacturer fails to provide to the Department the information required by section 3.8, 4 or 4.6 of this act, a pharmacy benefit manager fails to provide to the Department the information required by section 4.2 of this act, a nonprofit organization fails to post or provide to the Department, as applicable, the information required by section 4.9 of this act or a manufacturer, pharmacy benefit manager or nonprofit organization fails to post or provide, as applicable, such information on a timely basis and the failure was not caused by excusable neglect, technical problems or other extenuating circumstances, the Department may impose against the manufacturer, pharmacy benefit manager or nonprofit organization, as applicable, an administrative penalty of not more than $5,000 for each day of such failure.

Analysis

What this will mean for any nonprofits who host annual meetings would be required to report the exhibit revenue, the sponsorship for their fundraisers and all types of other receipts on their websites.  If the nonprofit receives support in the way of product for their clinical trials they will have to report that.  If they provide patient assistance all that will have to be reported.  This could be devastating to a small nonprofit as they would be required to keep track of all the potential transactions that take place between them and industry.  In reality, this is a mess designed to discredit nonprofits and vindictive for the state to require this.

Constitutionality

The US Supreme Court has been clear on states, not requiring reporting nonprofit revenue.   Forcing the disclosure of nonprofit supporters was ruled unconstitutional by the Supreme Court in its 1958 Alabama v. NAACP decision.

Connecticut was considering requiring nonprofits to report political donations and after Citizens United and Alabama vs NAACP this was shelved.

Contact the Governor

If you are a nonprofit, you may want to contact the governor’s office:

If you have any comments or wish to reach out to the Nevada governor to offer your opinion on this bill, you can submit an email here or call his office at (775) 684-5670 or (702) 486-2500.

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