NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Senate Bills 98, 143, 141, 142 , S.M. 9 and House Bills 2, 297, 298, 300 and 392

SOURCES OF INFORMATION

Agency on Aging (A.A.)

Health Policy Commission (H.C.)

SUMMARY

Synopsis

HIM 22 requests the Health Policy Commission conduct an in-depth study of the rising cost of prescription drugs in New Mexico. This study must include a targeted survey to consumers to identify populations affected by the rising cost, and an analysis of the cost and impact on access. Potential solutions must be presented to the Interim Legislative Health and Human Services Committee at its September 2001 meeting.

The recent Medicare managed care plan withdrawals left thousands of seniors without a prescription drug benefit. The purchase of Medi-Gap insurance plans remains one option, but unfortunately, these plans are not reasonably priced for the average senior. The rising cost of prescription drugs only adds to the dilemma, keeping thousands of seniors from purchasing their medication or settling for half or less the prescribed amounts.

FISCAL IMPLICATIONS

The HPC reports there are unencumbered contractual funds in FY01. These funds, which were targeted for other projects, could be used for this study. Projects identified previously such as the updated analysis of health professional recruitment and retention issues, will be postponed or canceled.

The HPC says that the $200,000 in HB 2 and SB 98 General Appropriation Acts for contractual services must be restored or they will not be able to comply with HJM 22 or other related health policy studies. The survey interview process alone may cost from $60,000 to $120,000, depending on survey type, precision of expected findings, and confidence in findings representing the entire state.

ADMINISTRATIVE IMPLICATIONS

HPC staff will have to conduct the HJM 22 study and provide administrative support such as travel, postage and printing.

RELATIONSHIP

Relates to:

SB 143, Prescription Drug Senior Program

SB 141, Prescription Drug Fair Pricing Act

SB 142, NM Drug Discount Act

HB 297, Prescription Drug Discount Program

HB 298, Indian Prescription Drugs

HB 300, Prescription Drug Senior Program

HB 301, Prescription Fair Pricing Act

HB 302, Prescription Drug Program Seniors

SJM 9, Prescription Assistance

HB 2, Appropriations Act

SB 98, General Appropriations Act of 2001

OTHER SUBSTANTIVE ISSUES

• Concerns that drug prices are high and rising.
• Thousands of New Mexicans are without health insurance or coverage for prescription drugs and Medicare does not cover outpatient prescription drugs.

• The uninsured pay the highest prices for prescription drugs.

• No in-depth studies have been conducted in New Mexico to identify precisely the number of people without insurance coverage for prescription drugs.

• The relationship between ill health and lack of prescription drug access remains unstudied.

• Rising cost of prescription drugs may have a direct impact on the health and well-being of New Mexicans.
• There is significant testimony from senior citizens and others that the high cost of prescription drugs causes them to forego necessary medical care.

DW/prr:ar