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A major pharmaceutical bill, stripped of a possibly unconstitutional provision and designed to regulate the prices of insulin and other diabetes drugs, moved forward Wednesday, passing the Senate Health and Human Services committee on 4-1 vote.

The legislation, Democratic Sen. Yvanna Cancela’s SB265, still includes provisions requiring manufacturers of certain diabetes drugs to report research and development related costs, mandating health care nonprofits disclose any contributions they receive from the pharmaceutical industry and implementing a registration system for pharmaceutical sales representatives. The price control section of the bill, which would have required manufacturers of diabetes drugs to reimburse patients and insurers for certain cost increases, was struck by an amendment as expected.

The two Republican senators on the committee, Scott Hammond and Joe Hardy, both noted their desire to see transparency mandates for pharmacy benefit managers (PBMs) — third-party administrators responsible for administering prescription drug programs for health plans — wholesalers and retailers folded into the legislation before it comes to the Senate floor for a vote. Hammond voted yes on the bill, saying that he hoped he would remain a “yes” on the floor if the transparency provisions are expanded, while Hardy voted no with the hope that the change would get him to a yes in the final vote.

“We’ve got to shine the light on the process, every step of the process,” Hammond said. “I think we need to go a little bit further.”

Cancela said she is open to having conversations about requiring transparency from other entities involved in the price setting process for pharmaceuticals but that her focus has been on the pharmaceutical companies themselves as the first step in the process.

“But I think the majority of the light needs to be shed on the manufacturers because every other cog in the system reacts to their price setting system,” Cancela said.

The concerns voiced by Hardy and Hammond that the legislation doesn’t go far enough in its transparency mandates mirror those from Republican Senate Leader Michael Roberson, who expressed an interest on Tuesday in bringing forward his own emergency bill to address the rising costs of insulin in Nevada. Roberson said that the “best thing” the Legislature could do is mandate transparency from everyone, not just pharmaceutical manufacturers.

The Democrats on the committee, meanwhile, voiced their support for the legislation as it stands today. Democratic Sen. Julia Ratti said she hoped that lawmakers are still able find a way to work the price control portion back into the legislation in a way that doesn’t pose constitutional concerns.

“Families with diabetes can no longer wait for a perfect solution,” Ratti said.

Cancela reiterated at the Wednesday hearing that while there were concerns with the price control section of the bill as written she is still hopeful that a refund process could be created.

Cancela announced that the price control provision would be removed from the legislation on Tuesday after being informed by legislative staff over the weekend about two possible constitutional concerns with the price control provision, under which manufacturers of insulin and another type of diabetes drug called biguanides would have had to reimburse patients or insurers if the list price of the drug increased more in a year than the Consumer Price Index’s Medical Care Component.

In a memo dated Monday, legislative counsel mapped out prior case law on pharmaceutical price controls, noting that courts have previously found such legislation in violation of the Interstate Commerce Clause and the doctrine of federal preemption as spelled out in the Supremacy Clause. The courts have found that previous attempts to control the prices of pharmaceutical drugs have unduly restricted parts of the drug pricing process that happen out of state and that such laws conflict with the goal of spurring innovation laid out in federal patent law.

The bill, which was granted a waiver to exempt it from legislative deadlines, still needs to receive a vote from the full Senate before it is considered in the Assembly.

Photo courtesy of sriram bala under Creative Commons.

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