Stone: The Truth About AB 250: Will Patients Really Benefit?

(Jeff Stone) – My office has received several calls requesting my support for AB 250.

This bill was drafted in response to provisions in the federal “Inflation Reduction Act” that requires the U.S. Secretary of Health and Human Services to “negotiate” the drug prices in Medicare, parts B and D, with the highest Medicare spending. It further requires drug companies to pay rebates to Medicare if drug prices exceed inflation for Medicare beneficiaries.

The Act will require the Secretary of HHS to negotiate prices with drug companies making a handful of drugs that are single-source (non-generic) or biologics (with no substitutes) with the hopes of making them more affordable – although calling this a “negotiation” is a stretch. If a manufacturer cannot offer the drug at the government-set price, they face a tax of up to 1900% or remove all of their drugs from Medicare.

This federal bill originally included Medicare and all private insurers; however, private insurers were amended out of the bill, hence this federal law only applies to Medicare.

The number of drugs for the first year will be 10 drugs (the top 10) beginning in 2026, 15 drugs for 2027 and 2028, and 20 drugs in 2029 and beyond. This is a federal law in conformance with the federal government’s exclusive jurisdiction over the U.S. Food and Drug Administration and the U.S. Health and Human Services effectuating U.S. drug policies.

The true beneficiary of this complicated piece of legislation is Medicare, which could potentially save billions of dollars in the years to come. In their negotiations, the U.S. government and drug companies will consider drug patent lengths, years that the drugs have been on the market, etc.

The good news is that the U.S. taxpayers would save money if the costs in Medicare go down. The bad news is if a drug company can’t sell the drug at the price set by the feds and are forced to withdraw their drug(s) from Medicare altogether, that will leave 100% of the cost of these unique drugs on the patient!

This brings me to AB 250. Believe me, if we could pass a law like AB 250, requiring drug companies to honor such Medicare discounts to private insurers, why wouldn’t we just do that?

You see, AB 250 is directed to the pharmacy to sell such drugs at the Medicare discounted prices. The problem is that pharmacies buy from wholesalers and are not given the same Medicare discounted prices. So, for a pharmacist to comply with this potential state law, the pharmacy would have to sell the drug to either the patient or the insurance company covering the patient at a loss!

Or, according to this bill, the pharmacist could be charged with a “deceptive trade practice” and will further allow an aggrieved angry patient the right to sue the pharmacist and/or the pharmacy! In other words, this bill will make your pharmacist a criminal and possibly bankrupt him/her on top of it if they do not sell these drugs at a discounted price lower than their actual cost!

Unfortunately, if Nevada passes a law requiring such discounts from drug manufacturers, the state will have no legal standing to enforce it.

So, what will pharmacies do if this legislation is passed? They will refer you to a pharmacy who will then refer you to another pharmacy and so on. The net result will be that you will have to get your top 10 meds from an out-of-state pharmacy! Pharmacies cannot sustain losing hundreds of dollars for each top 10 drug dispensed, nor can they risk being sued.

This legislation is what we call “feel-good legislation” that will not yield any discounts given to patients on private insurance plans and gives a “false promise” to patients. A better way to help consumers lower their costs of medications and their copays would be to regulate pharmacy benefit managers that rake in drug rebates and discounts for themselves at the expense of patient savings.

You can expect to see such legislation in 2025.

Senator Jeff Stone, Pharm.D. represents District 20 in the Nevada State Senate. He is the co-minority whip. This column was originally publised in the Reno Gazette-Journal.