Even as the COVID-19 pandemic disrupts day-to-day life, the fight over drug pricing transparency rages on between consumer groups, regulators, and industry. Regulators are assessing significant fines to increase compliance.

 

Fines in California & Nevada

Over the past 6 months, California has assessed a total of $17.5 million dollars in fines on drug manufacturers for not complying with drug pricing transparency disclosure requirements, per STAT News. This echoes the State of Nevada levying $17.4 million in fines in October 2019 that we covered here.

Ideally, state governments would be able to negotiate pricing directly with manufacturers – but that has been made impossible due to the stranglehold that PBMs have on the pharmaceutical supply chain. Instead, regulators are being forced to settle for report on price increases, which will not necessarily have an effect on pricing. What is also often missing in state analysis is the price that the manufacturer actually gets after rebates, coined the “gross-to-net bubble” by Drug Channels. The gross-to-net bubble is the difference in pricing between the manufacturer list price and what is actually paid to the manufacturer.

Discount Insulin & Minnesota’s Insulin Affordability Bill

Eli Lilly and Novo Nordisk each lowered pricing or expanded access to their insulin products, citing it as an effort to build goodwill. Eli Lilly lowered their pricing to $35 for most insulin products, whereas Novo Nordisk is making their insulin products free of charge for those who can prove loss or lack of health benefits.

Interestingly, the move comes on the heels of a landmark bill passed in Minnesota called the Insulin Affordability Act, which allows Minnesotans to purchase a 30-day supply of insulin from a pharmacy for a $35 copay and requires insulin manufacturers to cover the difference – or be levied a $200,000 per month fee.  

Importance of State Compliance

State compliance is important – not just to prevent fines and Federal/State regulatory action, but to ensure the integrity of the pharmaceutical supply chain. Five Rivers RX supports the pharmaceutical supply chain by providing actionable guidance and excellent administrative services with a focus on client care across compliance, commercial, and quality solutions. For more information, reach out today!