..[1] NOTE: As provided in LFC policy, this report is intended only 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 (in HTML & Adobe PDF formats) is available on the Legislative Website. The Adobe PDF version includes all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be obtained from the LFC’s office in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR:	Knauer		DATE TYPED:	2/1/02		HB	HJM 21
SHORT TITLE:		Federal “Best Price” of Prescription Drugs				SB
					ANALYST:		Dunbar

APPROPRIATION

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY03

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates HB 149; SB238; HB 264 and SJM 22

SOURCES OF INFORMATION

Responses Received From

Department of Health (DOH)

Health Policy Commission (HPC)

Attorney Generals Office (AGO)

SUMMARY

Synopsis of Bill

House Joint Memorial 21 requests the United States Congress to enact legislation that would establish a single uniform federal "best price" or low price of prescription drugs to eliminate disparities in discounting among federal purchasers.

Significant Issues

Currently there is wide variation in the discounts available to federal purchasers for discounted prescription drugs. Prices for these drugs are subject to a complicated array of federal regulations and the range of discounted prices may vary by as much as twenty percent.

HPC reports that the populations served by federal purchasers are more likely to be of low-income and have few resources to pay for prescription drugs.

RELATIONSHIP

SJM 22 (free drug programs for low income persons);

SB238 (a prescription drug discount program);

HB 264 (a prescription drug fair pricing act);

HB 149 (for the State Agency on Aging to assess the potential for establishing a prescription bulk purchasing program utilizing the special prescription drug purchasing prerogatives of one or more Native American prescription drug programs).

OTHER SUBSTANTIVE ISSUES

The monthly costs for senior citizens' prescription drugs average four hundred fifty dollars ($450) per month, which Medicare does not cover. There is substantial information in the press highlighting the circumstances in which many senior citizens find themselves, such as having to choose between purchasing prescription drugs and basic necessities such as food, housing, clothing and utilities.

ALTERNATIVES

The AGO states that the bill provides an alternative of establishing a prescription drug program like Florida or Michigan’s to secure more favorable pricing for New Mexico state government when agencies are purchasers. These programs involve establishing a preferred formulary for which the State receives more favorable pricing through negotiations. The Michigan program is expected to save $42 million in Medicaid costs.

F I S C A L I M P A C T R E P O R T

Relates HB 149; SB238; HB 264 and SJM 22

SOURCES OF INFORMATION

Responses Received From

BD/njw