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.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

New Mexico Health Policy Commission

SUMMARY

Synopsis of Bill

House Bill 388 enacts the "Prescription Drug Fair Pricing Act" which provides equal access to prescription drug prices. The provisions of this bill apply to sellers of prescription drugs in the state to mandate that covered transactions between a seller and a purchaser occurring during the same or substantially the same time period shall be based on the same or substantially the same terms and conditions. The provisions of this bill allow for discounts provided the discount is available to all purchasers on equal terms.

Significant Issues

The provisions of this bill would not necessarily guarantee consumers the lowest possible price on prescription drugs, but would require that different consumers are being offered the same price for the same drug.

The Human Services Department commented on this bill when it was introduced ion 1997. That department still has the same concerns with regard to the medicaid program and the possible loss of revenues and so their concerns are included here as an attachment to this analysis.

FISCAL IMPLICATIONS

The Office of the Attorney General estimates the fiscal implications of enacting this bill would be substantial and that additional staff would be required.

OTHER SUBSTANTIVE ISSUES

According to the New Mexico Health Policy Commission, prescription drugs are the fastest growing component of personal health care expenditures. Most recent data available for New Mexico shows that in state year 1994, New Mexicans spent 10.7% of their personal health care expenditures ($377 million dollars) on prescription drugs. Nationally, the most recent data suggests people spend 14.1% of their health care expenditures on prescription drugs.

MB/njw

Attachment