Legislature should address cost of medications
State spent $670 million on prescription drugs in 2016
Last April, Gov. Susana Martinez vetoed legislation that could have saved New Mexico millions of dollars a year in prescription drug costs for state agencies and its employees and retirees. Senate Bill 354, which passed the Legislature with strong bipartisan support, would have required all New Mexico state agencies who purchase pharmaceutical drugs to work together to aggressively seek a better deal on drug prices.
Residents pay a huge cost for high drug prices. In fiscal year 2016 New Mexico state government spent over $670 million on prescription drugs, a staggering 54 percent increase in just two years. Senate Bill 354 would have leveraged the purchasing power of all of our state agencies that purchase prescription drug benefits including the Departments of Health, Human Services, Corrections, Medicaid, and General Services, and UNM and other agencies to aggressively pursue lower drug prices. Even though the legislation passed the Senate unanimously and the House with broad bipartisan support, Martinez vetoed it without explanation.
Several weeks ago the National Academy for State Health Policy (nashp.org) invited me to speak at their annual conference about my prescription drug purchasing reform legislation. The academy, a nonprofit and nonpartisan organization of state health professionals, had identified this bill as a key strategy that states could implement to better control the rising health care and prescription drug costs.
Aggressively negotiating lower prescription drug prices could save New Mexico’s state government millions every year. It can be done. The U.S. Department of Veterans of Affairs negotiates at least a 24 percent discount on the drugs it buys. Many other industrialized countries pay a fraction of what U.S. citizens and governments pay for the same drugs. Members of Congress have sought for decades to leverage the federal government’s purchasing power for Medicare but have been fought tooth and nail by the pharmaceutical industry.
Other states are working to achieve savings and reform as well. Recently citizenled referendums in Ohio and California have fought to lower drug prices, and California just passed legislation requiring the pharmaceutical industry to notify the state in advance of increases in drug prices.
At a time when budgets for classrooms and other key public services are being cut, and proposals are being pushed to force tens of thousands of public employees to pay more for their retirement and benefits, negotiating lower drug prices is just common sense.
The opponents of lower drug prices are formidable, however, and have many methods to stop progress. The pharmaceutical industry, one of the most profitable in America, has spent millions of dollars fighting efforts in Congress and in legislatures across America to get citizens a better deal on prices. In addition, the industry continues to make large contributions to politicians to maintain their foothold of opposition to reform. The pharmaceutical industry was the 10th-largest single contributor to the Republican Governors Association in the most recent election cycle, according to opensecrets.org.
This coming legislative session it’s time for Gov. Martinez to stand on the side of our citizens and use all the tools at our disposal to demand the very best deal possible on the purchase of prescription drugs. Requiring our state government to maximize its nearly $700 million in pharmaceutical purchasing power to lower the cost of prescription drugs is not just good business, it’s common sense.