SENATE MEMORIAL 99

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Jeff Steinborn

A MEMORIAL

REQUESTING THE LEGISLATIVE FINANCE COMMITTEE TO COMPILE INFORMATION RELATING TO PRESCRIPTION DRUG AND PHARMACY BENEFITS COSTS FROM CERTAIN STATE AGENCIES AND PREPARE FINDINGS AND RECOMMENDATIONS FOR ACHIEVING GREATER STATE AGENCY SAVINGS IN PRESCRIPTION DRUG AND PHARMACY BENEFITS PURCHASING TO THE LEGISLATIVE FINANCE COMMITTEE AND THE LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE.

     WHEREAS, state government, through its agencies, purchases many millions of dollars worth of prescription drugs and pharmacy benefits in its administration of direct health care through public health programs and health facilities as well as health coverage programs such as medicaid and coverage for state employees, retirees and their dependents; and

     WHEREAS, a September 28, 2016 health note published by the legislative finance committee reported that in state fiscal year 2016, the ten New Mexico state agencies that purchase prescription drugs or pharmacy benefits spent a combined total of over six hundred eighty million dollars ($680,000,000), up from four hundred forty-two million dollars ($442,000,000) in state fiscal year 2014, or an increase of approximately fifty-four percent; and

     WHEREAS, the legislative finance committee health note reported that in the medicaid program there was an eighty-three percent increase in pharmacy benefits spending from fiscal year 2014 to fiscal year 2016; and

     WHEREAS, while the legislative finance committee health note reported that the corrections department costs increased one hundred eighty-seven percent for prescription drugs to treat certain conditions, the corrections department "appears unable to fully account for its spending"; and

     WHEREAS, the legislative finance committee health note reported a three hundred nine percent increase in the price of prescription hepatitis C drugs alone from 2014 to 2016; and

     WHEREAS, for specialty pharmaceuticals used to treat conditions such as hepatitis C and multiple sclerosis, the pharmacy benefits manager express scripts predicts spending will rise twenty percent per year, more than four times the cost of health care overall; and

     WHEREAS, according to the Kaiser family foundation, pharmaceutical costs have been increasing an average of eight and three-tenths percent per year since 1994, far beyond the regular rate of inflation; and

     WHEREAS, rebates for pharmaceuticals are limited to a percentage of the original price set by manufacturers, which continue to rise with more frequency; and

     WHEREAS, a Connecture study showed that the price of over four hundred generic pharmaceuticals increased more than one thousand percent between 2008 and 2015; and

     WHEREAS, many specialty pharmaceuticals are priced higher in the United States than in other developed countries; and

     WHEREAS, the prices of important prescription drugs purchased with public dollars are not currently available to the taxpayers, researchers and other interested parties; and

     WHEREAS, some experts believe that savings may result from state agencies working together more closely to share administrative efficiencies and economies of scale by purchasing prescription drugs and pharmacy benefits in common;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the legislative finance committee staff be requested to compile from all state agencies identified in its health note, "Prescription Drug Costs: Maximizing State Agency Purchasing Power", namely the children, youth and families department, the corrections department, the department of health, the human services department, the Albuquerque public school district, the public school insurance authority, the risk management division of the general services department, the university of New Mexico and the university of New Mexico hospitals, the following information:

          A. each of the thirty most utilized prescription drugs purchased by each agency either directly or through a pharmacy benefits plan;

          B. each of the thirty prescription drugs that have the highest per unit price;

          C. each of the thirty prescription drugs with the highest price growth between state fiscal year 2012 and state fiscal year 2016; and

          D. each of the thirty prescription drugs that constitute the greatest expenditure to the agency budget; and

     BE IT FURTHER RESOLVED that for each prescription drug that the legislative finance committee staff identifies, that it compile the following information on those prescription drugs purchased by state agencies either directly or through pharmacy benefits procurement:

          A. reporting on the total fiscal impact on the state budget for each prescription drug it identifies;

          B. the per unit price paid by each agency for the prescription drugs identified;

          C. the price growth between state fiscal years 2012 and 2016 of the list price for each prescription drug it identifies; and

          D. the total rebates captured by each agency for the prescription drugs identified; and

     BE IT FURTHER RESOLVED that the legislative finance committee staff be requested to report its findings and recommendations for achieving greater state agency savings in prescription drug and pharmacy benefits purchasing to the legislative finance committee and the legislative health and human services committee by November 1, 2017; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the chair and vice chair and director of the legislative finance committee and to the legislative health and human services committee.

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