As we discussed last week, Nevada’s Governor has signed into law SB 539, which provides sweeping transparency legislation related to several aspects of the pharmaceutical industry. Nevada joins several other states in adopting legislation aimed at addressing pharmaceutical price increases and other recent industry concerns.

Diabetes Drug Pricing Reports

• February 1: The Department of Health (“Department”) must annually compile
  • a list of prescription drugs that the Department determines to be essential for treating diabetes, including all forms of insulin and biguanides, in the State and the wholesale acquisition cost (“WAC”) of each drug (“List 1”); and
  • a list of prescription drugs from section (i) that have been subject to increase in WAC equal to or greater than (a) the percentage increase in the Consumer Price Index (“CPI”) or Medicare Care Component (“MCC”) during the preceding calendar year, or twice the percentage increase in the CPI or MCC in the preceding two calendar years (“List 2”).

• April 1: The prescription drug manufacturer for each drug included in List 1 must annually submit a report to the Department that includes: (i) the cost of producing the drug; (ii) total administrative expenditures relating to the drug, including marketing and advertising costs; (iii) profit that the manufacturer has earned from the drug and percentage of the manufacturer’s total profit for the period during which the manufacturer has marketed the drug for sale that is attributable to the drug; (iv) total amount of financial assistance provided by the manufacturer through any patient assistance program (“PAP”); (v) cost associated with coupons and copayment assistance programs, and costs attributable to such coupon redemption and program use; (vi) drug WAC; (vii) history of any WAC increases in the 5 years immediately preceding the report submission date; (viii) aggregate amount of all rebates that the manufacturer provided to pharmacy benefit managers (“PBM”) for sales of the drug in the State; and (ix) any additional information required by the Department through regulation.

• April 1: The prescription drug manufacturer for each drug included in List 2 must annually submit a report to the Department that includes: (i) list of each factor that contributed to the increase; (ii) percentage of the total increase attributable to each factor; (iii) explanation of the role of each factor in the increase; and (iv) any additional information required by the Department through regulation.

Sales Representatives

• Annually: A prescription drug manufacturer shall provide to the Department a list of each pharmaceutical sales representative who markets prescription drugs to health care providers licensed, certified or registered in the State; pharmacies and their employees; operators and their employees of medical facilities; and individuals licensed or certified under the Nevada insurance code (collectively, “HCPs”). A person not included on the list is banned from marketing prescription drugs to HCPs on behalf of the manufacturer.

• March 1: Each sales representative included on a pharmaceutical manufacturer list must annually submit to the Department a report regarding (i) a list of HCPs to whom the sales representative provided any type of compensation of value that exceeds $10; or total compensation exceeding $100 aggregate; and (ii) the name and manufacturer of each prescription drug for which the pharmaceutical sales representative provided a free sample to a HCP, and the name of the HCP to whom the free sample was provided.

PBM Reports

• April 1: A PBM shall submit annually to the Department a report that includes (i) total amount of all rebates negotiated with manufacturers of prescription drugs included in List 1 during the preceding calendar year; (ii) total amount of rebates retained by the PBM; and (iii) total amount of rebates negotiated for use by Medicare, Medicaid, other third party governmental recipients, other third party non-governmental recipients, and beneficiaries of certain ERISA plans.

• Due to conflict of interest: A PBM has a fiduciary duty to a third party that contracts with the PBM for pharmacy benefit management services and must notify the third party in writing of any activity, policy, or practice of the PBM that creates a conflict of interest that interferes with the PBMs ability to discharge its fiduciary duty.

Nonprofit Organizations

• February 1: An applicable nonprofit organization that has received a payment, donation, subsidy or other item of value from a manufacturer, pharmacy benefit manager, insurer, health benefit plan, participating public agency, or other organization that provides health coverage or benefits in accordance with federal or state law, or a trade or advocacy group for the same must annually report: (i) the amount of the contribution and the group that provided the contribution; and (ii) the percentage of the total gross income of the organization during the prior calendar year attributable to such payments. The report may be posted on the nonprofit organization’s website that is accessible to the public or submitted to the Department.   

Penalties

The Department  may impose an administrative penalty of up to $5,000 for each day a manufacturer, PBM, or non-profit organization, or up to $500 for each day a pharmaceutical representative fails to provide a required report.

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