HOUSE JOINT MEMORIAL 4

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Deborah A. Armstrong

A JOINT MEMORIAL

REQUESTING THAT A PHARMACEUTICAL PRICING TASK FORCE BE CONVENED TO STUDY AND MAKE RECOMMENDATIONS ON PHARMACEUTICAL PRICING AND HOW TO MITIGATE THE EFFECTS OF RISING PHARMACEUTICAL PRICES.

     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, health care expenditures constitute an increasing percentage of the state budget; and

     WHEREAS, a number of states have taken action to control the prices of pharmaceuticals; and

     WHEREAS, seventy-six percent of Americans say their top health priority is ensuring that high-cost pharmaceuticals used to treat chronic conditions remain affordable, according to a Kaiser family foundation poll; and

     WHEREAS, even for patients with insurance, the average out-of-pocket expense still averages twenty percent to twenty-five percent of the cost of prescription drugs; 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, there are market middlemen called pharmacy benefits managers that operate without much transparency; and

     WHEREAS, pharmacy benefits managers are able to make considerable profits by charging payers and paying pharmacies according to terms highly favorable to pharmacy benefits managers; and

     WHEREAS, New Mexico has enacted legislation that charges the office of superintendent of insurance to control the pharmacy benefits manager industry and set caps on generic drug pricing; and

     WHEREAS, there is currently no price transparency for pharmaceuticals, and this fact allows pharmaceutical companies and pharmacy benefits managers to set arbitrary prices for their products;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the director of the legislative finance committee be requested to convene a pharmaceutical pricing task force consisting of representatives from the human services department, the office of superintendent of insurance, the interagency benefits advisory committee and the legislative finance committee to study ways in which the state of New Mexico can take action to mitigate the effects of rising pharmaceutical prices; and

     BE IT FURTHER RESOLVED that the pharmaceutical pricing task force be requested to report its findings and recommendations for mitigation of rising pharmaceutical prices to the governor, the human services department, the office of superintendent of insurance, the risk management division of the general services department, the retiree health care authority, the public school insurance authority, the Albuquerque public school district, the legislative health and human services committee and the legislative finance committee by October 1, 2016; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the governor, the director of the legislative finance committee, the secretary of human services, the superintendent of insurance, the director of the risk management division of the general services department, the director of the public school insurance authority, the superintendent of the Albuquerque public school district and the chair and vice chair of the legislative health and human services committee.

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