Life Science Compliance Update

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June 07, 2017

Nevada, Round Two - Price and Non Profit Transparency Bill Added PBM's now Back on Governor's Desk


Some of our loyal readers may remember an article we ran last week about the Nevada state legislature passing one of the country’s strongest pharma transparency bills.  Last Friday the Governor veto'ed the original bill but the legislature then amended the bill over the weekend and held an impromptu public hearing on the floor of the assembly.  In the end, the legislature decided to include pharmacy benefit managers and has sent the bill passed by the state assembly and senate back to the Governor for either his signature, veto or pass without a signature.

The revised bill encompasses several reporting requirements including:

1) annual cost disclosure that applies to diabetes manufacturers  -- state entity will compile a list of diabetes medications, then manufacturers must annually submit info relating to price (e.g., total amount of financial assistance) -- due Feb 1;

(2) this same group of manufacturers must report on the reasons why there was a Wholesale Aquisition Cost (WAC) increase -- due Apr 1;

(3) all manufacturers' sales reps for must be listed (applies to all drugs) with annual updates;

(4) all manufacturers must annually report transfers of value (over $10/$100) and samples provided to HCPs (insurance companies, hospitals, mid providers, etc.) and staff -- due Mar 1;

(5) PBMs must annually report rebates with manufacturers -- due  Apr 1; and

(6) all patient advocacy nonprofits must annually disclose donations received from manufacturers, PBMs, third parties (applies to all drugs) -- due Feb 1.

During the impromptu floor hearing on Saturday, the three major manufacturers of insulin briefly registered their expected opposition to the bill, along with several pharmacy benefit managers (PBMs). That brief hearing led to a last-minute Sunday night amendment to the bill, leading to an amended bill (voted out in a 19-2 vote), that Governor Sandoval has been expected to sign. The amended bill, however, raises eyebrows for many reasons, some of which are outlined below.

One of the most onerous and difficult to understand disclosures is that which requires all patient advocacy nonprofits to annually report and disclose donations received from manufacturers, PMBs, and third parties including insurance companies. While some of the provisions in the bill apply to only diabetes medicines, this particular disclosure applies to all drugs. The annual report will be due February 1st.

Many may wonder why nonprofits have been targeted by the Nevada legislature and what control, if any, the state has over nonprofits. The reason the legislature targeted nonprofits can be found in the legislative history. At least one member of the legislature noted that,

It asks that they disclose the amount of each contribution from a manufacturer and what percentage of their overall budget that contribution makes up. It is unfortunate that we end up in situations where folks who are advocating for patients are pressured by donors to not give the most accurate information and we want to make sure that is not happening out there. The DHHS will register pharmaceutical representatives. This is modeled off a program that was passed in the Chicago City Council in response to the opioid crisis there. The intention is to have information on pharmaceutical representatives and their relationships with doctors. The reporting would include information about health care providers they contacted, the drugs they marketed and free samples they provided, among other things. There is no fee for the registration, but DHHS would keep a list and make sure the reports are turned in every year.

Another disclosure will require diabetes manufacturers to file an annual cost disclosure by February 1st. The state Department of Health and Human Services will compile a list of diabetes medicines for which manufacturers must annually submit information related to the price (such as the total amount of financial assistance). That same group of manufacturers will also be required to report why there was a wholesale acquisition cost increase, though that report is due April 1st.

Manufacturers sales representatives (for all drugs) must be listed with annual updates. Further, all manufacturers must annually report transfers of value (over $10 for individual compensation/$100 in compensation in aggregate) and samples provided to healthcare providers (including insurance companies, hospitals, etc.) and staff, due March 1st.

Additionally, all PBMs must annually report rebates with manufacturers, in a report due April 1st.

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.

Special thanks to Nico Fiorentino, Manager of Research and Compliance with G&M Health, LLC

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