Despite massive spending on lobbying and campaign contributions, the big drug companies are slowly losing their stranglehold on state legislatures across the country. In Maryland, Maine, Oregon and Colorado, consumers, patients, public health advocates and providers demanding more affordable prescription drugs have succeeded in passing landmark legislation that will finally help manage runaway drug costs.
The New Mexico Legislature should build on this momentum and pass a Prescription Drug Affordability Board next session to help reduce the cost of health care and benefit all New Mexicans.
The heartbreaking stories we’ve all heard about family members, friends and neighbors who continue to struggle to afford the medications they need is backed up by data. A statewide survey conducted by GBAO Strategies found that nearly half of New Mexicans – 44% – have skipped taking medication or not filled a prescription because of cost concerns. Even during the pandemic, pharmaceutical manufacturers have continued to raise the price of drugs above the rate of inflation. In 2020, prices for 460 prescription drugs increased by an average of 5.2% – more than triple the rate of inflation – according to an analysis from the health-care research firm, 3 Axis Advisors.
Researchers writing in the Journal of the American Medical Association found “in the years between 2000 and 2018, 35 big drug companies received a combined revenue of $11.5 trillion, with a gross profit of $8.6 trillion.” Yes, 8.6 trillion, and it’s breaking our health care system.
Prescription drug companies are the only businesses in the health care industry whose rates are not regulated. It’s time to hold them to the same standard as all other health care providers. Medications don’t work if people can’t afford them, and New Mexico needs an independent body with the authority to evaluate high-priced drugs and set reasonable rates for consumers to pay.
That’s why we’re introducing legislation to create a New Mexico Prescription Drug Affordability Board. The board would help establish reasonable payment costs for drugs, considering a range of economic factors, and require companies to justify drug costs. Once a fair payment is determined, the board would set an upper payment limit that applies to all drug purchasers and payor reimbursements in the state, ensuring that lower costs benefit consumers. This system would be similar to how other health-service reimbursement rates are set by Medicare.
Our legislation would set various conditions that would trigger an affordability review, including when prices increase by more than 10% per year, or exceed either $30,000 a year for brand-name drugs or $100 a month for generics per person. Patients or consumer advocates could also nominate drugs for review.
The state regulates the cost of health insurance, electricity and other critical utilities, and it ought to look out for consumers of prescription medications as well. Americans pay four times as much for the same medicines as people in other countries. Drug company profits and CEO salaries have skyrocketed over the past two decades as consumer have been forced to pay more. New Mexico can fight back and protect our most vulnerable. Next session we should create a Prescription Drug Affordability Board.