Memorandum

Insulin pricing transparency bill passes Nevada state assembly, senate – May 31, 2017

Nevada is considering new legislation that would require insulin manufacturers to disclose information on sticker price, middlemen, and profits surrounding insulins. After passing the state senate 19-2 on May 19 and passing the state assembly 26-14 on May 25, the bill has found its way to the desk of Governor Brian Sandoval. If it becomes law, major insulin manufacturers Novo Nordisk, Lilly, and Sanofi will be fined $5,000/day if the specified information is not made public, and will have to notify the Nevada government 90 days prior to any changes to insulin pricing. Opponents of the bill argue that it takes no action that will actually lower expenses for patients – in fact, some speculate that it may have unintended, adverse consequences on patients, such as insulin shortage. The controversy over rising cost of insulin has reached a boiling point, and while we agree that transparency is of utmost importance, we also appreciate the role of industry in developing the next-generation of advanced insulins (among other drugs) to improve diabetes care. Back in December 2016, Novo Nordisk released a position statement on diabetes drug affordability in the US, and Lilly similarly addressed in part the call for pricing transparency in its 2016 Integrated Summary Report. We hope to see the same action from PBMs – in general, we think they’ve gotten off pretty much scot-free in this debate (as we understand it, most just take a percent of total revenue, hardly motivation to help reduce system costs). In general, we continue to believe that solutions that engage industry toward concrete initiatives to lower out-of-pocket costs for patients will ultimately prove more effective than imposing legislation without industry input. Calls for “greater transparency” are fairly specious – the companies already report investment in patient access and have for some years. Express Scripts’ collaboration with Novo Nordisk, Lilly/BI, Sanofi, AZ, and others to launch direct-to-patient discount program InsideRx is a step in the right direction, and we’d like to see more. We do also note that when major insurance companies were covering the high cost of insulin, or employers were covering it, there was not particularly much patient outcry; we felt very much at that time for patients without coverage at that time and feel far worse now, hearing the far higher number of patients in the US and in emerging markets without access to insulin. We do note that with Trumpcare, this is probably only going one direction in the US and the rise of social media suggests that this may only be the beginning of very vocal complaints.

 

-- by Payal Marathe, Helen Gao, and Kelly Close