PUTT Letter to Nevada Governor Lombardo: Veto AB 259

Dear Governor Lombardo,

I am reaching out to you today on behalf of Nevada’s independent pharmacies and their patients to respectfully urge you to veto Assembly Bill 259, which would implement prescription drug price controls similar to those established under the Medicare Drug Price Negotiation provisions of the Inflation Reduction Act.

Community pharmacists are deeply concerned about the high cost of prescription medication, which is reaching unsustainable levels for all but the wealthiest Americans. We applaud the spirit and intention of AB 259 but fear that, without addressing the real drivers of high drug costs - the practices of the 3 largest, vertically-integrated pharmacy benefit managers (PBMs) that together hold some 80% of the market - any attempts to control drug costs could result in pharmacy closures and lack of patient access to care.

Governor Lombardo, while we would never presume to lecture you about the convoluted nature of drug pricing, we respectfully ask you to consider the following before deciding whether or not to sign AB 259 into law:

Drug Acquisition Cost and Reimbursement Questions Remain Unanswered:
AB 259 rightly attempts to prioritize making extremely expensive medication affordable but does not address how pharmacies other than those owned by PBMs could affordably acquire medication stock. One of the primary issues arising from the IRA’s Medicare Drug Price Negotiations is the question of how wholesalers and pharmacies will be able to acquire the price-negotiated medications enough below Maximum Fair Price to cover dispensing costs. Because wholesale acquisition cost (WAC) does not align with proposed Maximum Fair Prices, these questions addressing the resulting significant market distortions remain unanswered. Pharmacies are without certainty of reimbursement, at a time when PBMs are already knowingly reimbursing pharmacies below acquisition cost in private and publicly-funded health plans.

Pharmacy Closures Are at an All Time High:
Additional pricing pressures from AB 259 could exacerbate the pharmacy closure crisis that is already at an all-time high across the United States. When neighborhood pharmacies close, the impact extends far beyond prescription access - these closures eliminate convenient healthcare touchpoints, medication counseling services, and essential health screenings that vulnerable populations depend upon. Seniors and low-income residents often lack transportation to travel greater distances to reach remaining pharmacies. With AB 259 signed into law, we fear Nevada could see closures in the most rural and most densely populated areas - an ironic, but tangible reality that characterizes the cruelty of pharmacy deserts.

Alternative Solutions:
There must be guardrails to protect those providing direct patient care so that patient access is preserved. Rather than implementing price controls that overlook the complexities of drug price, acquisition cost and reimbursement, we respectfully recommend consideration of alternative approaches including:

Addressing the impact of PBM spread pricing, patient steering to PBM-owned/affiliated pharmacies and the excessive fees PBMs charge patients and plan sponsors;

Establishing a “floor” and “ceiling” pricing structure that brings egregiously high and low drug costs in line and ensures patients and plan sponsors receive fair, affordable medication pricing and pharmacies are adequately reimbursed to remain open and viable;

Reforming PBM practices that burden patients, plan sponsors and pharmacies
Supporting direct contracting to eliminate middleman markups, fees and other revenue schemes that drive up overall healthcare costs.

We respectfully request that you veto AB 259 and instead work with stakeholders to develop comprehensive solutions that address the real drivers of high drug costs without jeopardizing patient access and the pharmacies that serve our most vulnerable residents.

Thank you for your consideration of this important matter and your continued leadership in addressing the healthcare needs of Nevada residents.


Yours in advocacy,

Monique Whitney
Executive Director