Request for Nevada governor to veto AB259 establishing maximum fair price limits for prescription drugs
Governor of Nevada
101 North Carson Street
Carson City, NV 89701
Dear Governor Lombardo,
The HIV+Hepatitis Policy Institute is a leading national HIV and hepatitis policy organization promoting quality and affordable healthcare for people living with or at risk of HIV, hepatitis, and other serious and chronic health conditions. While we support efforts to make prescription drugs more affordable, we respectfully urge you to veto Assembly Bill 259 because it would impose harmful and untested price controls without guaranteeing savings for patients.
AB 259 would prohibit any entity in Nevada from purchasing or seeking reimbursement for a prescription drug at a price higher than the flawed and untested federally determined Maximum Fair Price (MFP), as established under the Inflation Reduction Act (IRA). This effectively creates a blanket price cap for all state regulated health plans, based on prices negotiated exclusively for Medicare beneficiaries.
No Guarantee That Savings Will Reach Patients
AB 259 does not require insurers or pharmacy benefit managers to pass any savings from the price cap to patients. There is nothing in the bill that ensures the person picking up a prescription at the pharmacy will pay less. In fact, a recent study suggests that some patients are already seeing higher out-of-pocket costs for the first set of medications subject to maximum fair price negotiations.[i]
MFP Process Ignores HIV Treatment Infrastructure
Access to and affordability of the latest drugs are especially critical for patients living with HIV, hepatitis, cancer, and rare diseases. People with HIV rely on drug treatments that they must take for the rest of their lives. We also now have effective medications that prevent HIV transmission.
AB 259 imposes a one-size-fits-all pricing mechanism that fails to reflect the realities of HIV care. The HIV treatment system is built on decades of public and private investment. It has resulted in a highly coordinated infrastructure of support, including the Ryan White Program, ADAP, 340B clinics, manufacturer rebates, and patient assistance programs. These systems already make HIV medications widely affordable and support the broader delivery of services that help people stay in care and suppress the virus.
Flaws With IRA Negotiated Drug Price
We believe the negotiated price CMS develops is flawed because it focuses only on the costs and revenues for specific drugs. The research and development process for drugs does not work on an individual drug by drug process. In order to fully encapsulate the research and development costs, you must consider the aggregate costs, including the vast majority of medications in the R&D pipeline that never make it to market. By only focusing on a specific drug cost and revenues at the time of the negotiation process, CMS has ignored many factors including the following:
- The years of R&D that the drug manufacturer invested and learned from as it researched other drugs that led to the development of the negotiated drug;
- The failures and costs of those other drugs;
- Manufacturers may profit from the negotiated drug in order to invest in other drugs that fail or may not be as profitable;
- The investment and costs that may occur for new indications for the negotiated drug, along with future revenue that may arise from it;
- The investment the manufacturer is making on new drug development that is not associated with the negotiated drug;
- The amount and costs of free or reduced cost drugs the manufacturer provides globally to low income countries; and
- The value of the drug to the rest of the world and eradicating illnesses, such as infectious diseases.
Better Policy Options Are Available
Nevada can lower drug costs without risking patient access. Policymakers should consider alternatives such as:
- Require greater transparency from insurers and pharmacy benefit managers about how rebates and discounts are used
- Ensure predictable copay models instead of high and variable coinsurance
- Protect access to a full range of medications through careful formulary design and benefit oversight
These strategies can address affordability while maintaining access, preserving innovation, and respecting the rights of patients to receive individualized care.
We urge you to veto AB 259.
If you have any questions or need any additional information, please do not hesitate to reach out to our Government Affairs Manager, Zach Lynkiewicz, at zlynkiewicz@hivhep.org.
Sincerely,
Carl E. Schmid II
Executive Director