CARSON CITY — Diabetes drug manufacturers that face millions of dollars in state fines for failing to comply with a 2017 drug pricing transparency law have approximately one week to seek possible leniency from the state and explain why they did not or could not meet the reporting deadline.
Failure to reach an accommodation in an “informal dispute resolution” process set up by the state means as many as 26 companies ultimately could pay fines totaling nearly $22 million. The individual fines range from $735,000 to $910,000 assessed to eight companies. Penalty letters were sent to 21 companies Monday while five others have received initial notices of noncompliance.
The 2017 law seeks greater price transparency on essential diabetes drugs by requiring manufacturers to report costs and other financial data on those drugs to state health officials. Lawmakers in the 2019 session last spring amended the law to cover asthma drugs as well.
The deadline for diabetes drug manufacturers to submit information was April 1. The top fines represent 182 days of noncompliance from April 1 to Monday, with fines assessed at $5,000 per day. The state allowed 10 days from Monday for the companies to request informal meetings to resolve matters. Failing resolution, the fines are due in full on Oct. 30.
“We are allowing for the informal dispute resolution meeting to provide (the companies) all with an equal standardized way to share with us any extenuating circumstances that might have occurred to lead to late reporting,” said Scott Jones, who oversees drug transparency efforts within the state Department of Health and Human Services.
The state is now receiving company replies and compiling responses. Jones said several have previously indicated that staff turnover left them unaware of the law and caused or contributed to reporting delays.
Jones noted that 37 companies — more than 50 percent of an initial figure of 70 — met the April deadline. The initial number of companies thought to be affected by the law has been pared down as the state unearthed information to distinguish manufacturers from other entities, such as drug labelers.
Per state law, any collected fines are put toward diabetes education and prevention.
“We want to not make this a punitive effort as much as an effort so support compliance to receive this data, because we know it supports increased transparency,” Jones said.