Nevada - Veto SB 539 | Council For Citizens Against Government Waste

Nevada - Veto SB 539

State Action

June 6, 2017

 

The Honorable Brian Sandoval
Governor of Nevada
101 North Carson Street
Carson City, Nevada  89701

Dear Governor Sandoval,

The Council for Citizens Against Government Waste was pleased to learn that you vetoed SB 265, a bill that imposed complex and expensive price “transparency” burdens on manufacturers about pharmaceutical costs with respect to diabetes drugs.  We were disheartened to learn that within days of you wisely vetoing SB 265, the legislature quickly passed a similar bill late last night, SB 539, with little public input, and that you plan to sign this legislation into law.  On behalf of the 13,448 supporters and members of the Council for Citizens Against Government Waste (CCAGW) in Nevada, I ask that you veto this bill.

Once again the legislation would require pharmaceutical manufacturers, and now pharmacy benefit managers (PBMs), to provide costs, profits, pricing, coupon, and rebate information, much of which would be proprietary and if exposed would disrupt and harm the sensitive negotiations that occur throughout the drug supply chain that lower drug costs.

The bill again focuses on reporting the wholesale acquisition cost (WAC) and the history of any WAC increases.  The WAC is similar to a list price and is not a true representation of drug prices that are negotiated and paid for by the patient at the pharmacy.

Just as SB 265 would not have lowered drug costs, neither will this legislation.

I again respectfully recommend that you read a July 2, 2015, Federal Trade Commission commentary, “Price Transparency or TMI,” by Office of Policy Planning authors Tara Isa Koslov and Elizabeth Jex.  They wrote, “[i]s more information about prices always a good thing for consumers and competition?  Too much transparency can harm competition in any market, including in health care markets.”

The article noted that while more information can be useful for consumers to make choices among available options, it “is not universally good.  When it goes too far, it can actually harm competition and consumers.  Some types of information are not particularly useful to consumers, but are of great interest to competitors.  We are especially concerned when information disclosures allow competitors to figure out what their rivals are charging, which dampens each competitor’s incentive to offer a low price, or increases the likelihood that they can coordinate on higher prices.”

On behalf of Nevada consumers and taxpayers, I urge you to veto SB 539.

Sincerely,

Thomas Schatz
President
Council for Citizens Against Government Waste

 

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