EDITORIAL: Increasing red tape for pharmaceutical companies won’t lower the cost of insulin

Too much of today’s politics subordinates thoughtful policy to optics and perception. The temptation to “look good” overwhelms the reality of unintended consequences. Such is the case with Senate Bill 265.

Billed as a salvo against the evil pharmaceutical industry — who could be against that? — the measure would impose a host of requirements on companies that produce insulin, which diabetics use to control blood sugar. Supporters argue it will encourage manufacturers to lower insulin prices, which have increased in recent years. Among other things, it would force drugmakers to annually provide the state with information regarding the cost of producing the drug and to give 90 days advance notice of any price hikes.

As originally written, the measure mandated that companies rebate money to insurance companies and those who directly purchase insulin if the price of the product got too high. When’s the last time government price controls had the desired effect? Fortunately, the bill’s sponsor, Sen. Yvanna Cancela, a Las Vegas Democrat, dropped the provision after legislative attorneys suggested it violated federal law.

But even the amended bill invites litigation if passed. Much of the information that the state seeks to collect under the proposal could still be interpreted as proprietary and would do little to help those with diabetes. The fact that the Legislative Counsel Bureau called the current version of SB 265 “legally defensible” is hardly a ringing endorsement.

In addition, the bill ignores the fact that pharmaceutical companies aren’t the only player when it comes to setting drug prices. Hospitals, insurance companies and other forces all influence the retail cost of insulin, yet SB 265 remains silent in that regard.

As a practical matter, how will imposing a slew of bureaucratic dictates on insulin makers increase access to the drug or help control costs? The opposite is more likely. In part thanks to pharmaceutical companies and the drugs they produce, deaths due to diabetes have been declining even as the number of people diagnosed with the disease has more than tripled since 1980.

“I don’t think you can draw a straight line from the rising cost of insulin to outcomes,” David Kliff, who publishes the Diabetic Investor, told NPR last year. “Very few patients pay out of pocket for insulin. So I don’t think prices truly impact the patient pocket book. There’s only a small percentage who don’t have insurance or enough insurance.”

SB 265 passed the state Senate 19-2 last week and is now in the lower house. During a hearing this week on the measure, Assembly Republicans questioned whether it would reduce prices or help diabetics. Their skepticism is well founded. It would likely accomplish neither.

Instead of trying to score political points by attacking an easy target, lawmakers instead might focus on proven educational initiatives that can prevent the disease in the first place. That would significantly reduce the cost that diabetes treatment imposes on the health-care system, something that Senate Bill 265 only pretends to do.

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