SACRAMENTO – Nevada taxpayers could face millions in new bureaucratic costs and patients will likely see less access to life-saving drugs if state government mandates so-called “Maximum Fair Price” price controls on prescription drugs, finds a new brief released today by the Center for Medical Economics and Innovation at the nonpartisan, California-based, free-market think tank, the Pacific Research Institute.
“Some Nevada lawmakers want to enact government price controls on prescription drugs in the name of lowering costs for patients,” said Dr. Wayne Winegarden, director of PRI’s Center for Medical Economics and Innovation and the brief’s author. “As our research shows, taxpayers would have to foot the bill for millions in new bureaucratic costs and patients could lose access to life saving medications – without seeing lower out-of-pocket costs – if Nevada goes down this path. Lawmakers would be wise to think twice before enacting this misguided policy.”
Click here to download the brief
Under the federal Inflation Reduction Act, signed in 2022 by then-President Joe Biden, the U.S. Secretary of Health and Human Services was empowered to set a “Maximum Fair Price” on certain selected prescription drugs. Initially, 10 drugs under Medicare Part D will be subject to the negotiations starting in 2026, with the number expanding each year following. Medicare Part B drugs will be eligible for negotiations starting in 2028.
Nevada lawmakers enacted Assembly Bill 250 in 2023, which would have applied the federal “Maximum Fair Price” government-mandated prices on prescription drugs to Nevada patients. Gov. Joe Lombardo vetoed the legislation, but similar legislation (Assembly Bill 259) has been reintroduced this legislative session.
According to PRI’s research, Nevada mandating “Maximum Fair Price” would create significant new state administrative costs to oversee the program. If Assembly Bill 259 or similar legislation were enacted, Nevada could be required to spend at least $2.3 million annually on an expanded state bureaucracy, while also investing significant sums in new technology to administer the program – which will likely cost the state millions.
In the brief, Winegarden makes the case that price controls, ostensively promoted to lower patient drug costs, would not achieve this goal insurance policies determine patient co-pays and coinsurance costs, which are a percentage of the higher drug list price. The “Maximum Fair Price” policy does not adjust fixed co-pays and would not lower list prices.
Additionally, Nevada patients could see their access to medications they rely on to live long, healthy lives reduced as drug costs to healthcare providers are based on national prices, but reimbursements would be based on the lower, price-capped amount. Health care providers standing to lose money would result in patient losing access to these drugs. Taxpayers could also be on the hook for higher health care costs as fewer patients taking effective medications will result in more hospital stays and surgeries at greater costs.
